Presidential Candidates Debate - Sep 26, 2008

Transcript Text

  • MR. LEHRER

    At 00:01:10
    2 minutes

    Good evening from the Ford Center for the Performing
    Arts at the University of Mississippi in Oxford. I'm Jim Lehrer of
    "The NewsHour" on PBS, and I welcome you to the first of the 2008
    presidential debates between the Republican nominee, Senator John
    McCain of Arizona, and the Democratic nominee, Senator Barack Obama of
    Illinois.
    The Commission on Presidential Debates is the sponsor of this
    event, and the three other presidential and vice presidential debates
    coming in October.
    Tonight's will primarily be about foreign policy and national
    security, which by definition includes the global financial crisis.
    It will be divided roughly into nine-minute segments. Direct
    exchanges between the candidates and moderator follow-ups are
    permitted after each candidate has two minutes to answer the lead
    question in an order determined by a coin toss.
    The specific subjects and questions were chosen by me. They have
    not been shared or cleared with anyone.
    The audience here in the hall has promised to remain silent -- no
    cheers, no applause, no noise of any kind -- except right now, as we
    welcome Senators Obama and McCain. (Cheers, applause.)
    Let me begin with something General Eisenhower said in his 1952
    presidential campaign. Quote, "We must achieve both security and
    solvency. In fact, the foundation of military strength is economic
    strength," end quote.
    With that in mind, the first lead question: Gentlemen, at this
    very moment tonight, where do you stand on the financial recovery
    plan?
    First response to you, Senator Obama. You have two minutes.

  • SEN. OBAMA

    At 00:03:24
    2 minutes

    Well, thank you very much, Jim, and thanks to the
    commission and the University of Mississippi, Ole Miss, for hosting us
    tonight. I can't think of a more important time for us to talk about
    the future of the country.
    You know, we are at a defining moment in our history. Our nation
    is involved in two wars, and we are going through the worst financial
    crisis since the Great Depression. And although we've heard a lot
    about Wall Street, those of you on Main Street, I think, have been
    struggling for a while, and you recognize that this could have an
    impact on all sectors of the economy. And you're wondering: How's it
    going to affect me? How's it going to affect my job? How's it going
    to affect my house? How's it going to affect my retirement savings or
    my ability to send my children to college?
    So we have to move swiftly and we have to move wisely.
    And I've put forward a series of proposals that make sure that we
    protect taxpayers as we engage in this important rescue effort.
    Number one, we've got to make sure that we've got oversight over
    this whole process. $700 billion potentially is a lot of money.
    Number two, we've got to make sure that taxpayers, when they are
    putting their money at risk, have the possibility of getting that
    money back and gains if the market and when the market returns.
    Number three, we've got to make sure that none of that money is
    going to pad CEO bank accounts or to promote golden parachutes.
    And number four, we've got to make sure that we're helping
    homeowners, because the root problem here has to do with the
    foreclosures that are taking place all across the country.
    Now, we also have to recognize that this is a final verdict on
    eight years of failed economic policies -- promoted by George Bush,
    supported by Senator McCain -- a theory that basically says that we
    can shred regulations and consumer protections and give more and more
    to the most, and somehow prosperity will trickle down.
    It hasn't worked. And I think that the fundamentals of the
    economy have to be measured by whether or not the middle class is
    getting a fair shake. That's why I'm running for president. And
    that's what, I hope, we're going to be talking about tonight.

  • MR. LEHRER

    At 00:05:32
    1 second

    Senator McCain, two minutes.

  • SEN. MCCAIN

    At 00:05:33
    2 minutes

    Well, thank you, Jim. And thanks to everybody.
    And I do have a sad note tonight. Senator Kennedy is in the hospital.
    He is a dearly beloved friend to all of us. Our thoughts and prayers
    go out to the lion of the Senate.
    I also want to thank the University of Mississippi for hosting us
    tonight.
    And Jim, I -- I've been not feeling too great about a lot of
    things lately. So have a lot of Americans who are facing challenges.
    But I'm feeling a little better tonight, and I'll tell you why.
    Because as we're here tonight in this debate, we are seeing for the
    first time in a long time Republicans and Democrats together sitting
    down, trying to work out a solution to this fiscal crisis that we're
    in.
    And have no doubt about the magnitude of this crisis. And we're
    not talking about failure of institutions on Wall Street, we're
    talking about failures on Main Street and people who will lose their
    jobs and their credits and their homes if we don't fix the greatest
    fiscal crisis probably in -- certainly in our time, and I've been
    around a little while.
    But the point is -- the point is, we are finally seeing
    Republicans and Democrats sitting down and negotiating together and
    coming up with a package. This package has transparency in it. It
    has to have accountability and oversight. It has to have options for
    loans to failing businesses rather than the government taking over
    those loans. We have to -- it has to have a package with a number of
    other essential elements to it.
    And yes, I went back to Washington, and I met with my Republicans
    in the House of Representatives. And they weren't part of the
    negotiations, and I understand that.
    And it was the House Republicans that decided that they would be part
    of the solution to this problem.
    But I want to emphasize one point to all Americans tonight: This
    isn't the beginning of the end of this crisis. This is the end of the
    beginning, if we come out with a package that will keep these
    institutions stable. And we've got a lot of work to do. And we've
    got to create jobs. And one of the areas, of course, is to eliminate
    our dependence on foreign oil.

  • MR. LEHRER

    At 00:07:55
    13 seconds

    All right. Let's go back to my question, how you
    all stand on the recovery plan. And talk to each other about it.
    What do -- could -- we got five minutes. We can negotiate a deal
    right here. But -- I mean, are you -- do you favor this plan, Senator
    Obama?

  • SEN. OBAMA

    At 00:08:08
    1 second

    Well -- well --

  • MR. LEHRER

    At 00:08:09
    2 seconds

    And you, Senator McCain? Do you -- are you in favor
    of this plan?

  • SEN. OBAMA

    At 00:08:11
    1 minute

    We haven't seen the language yet, and I do think
    that there's constructive work being done out there. So for the
    viewers who are watching, I am optimistic about the capacity of us to
    come together with a plan.
    The question I think that we have to ask ourselves is, how did we
    get into this situation in the first place? Two years ago, I warned
    that because of the subprime lending mess, because of the lax
    regulation, that we were potentially going to have a problem and tried
    to stop some of the abuses in mortgages that were taking place at the
    time. Last year, I wrote to the secretary of the Treasury to make
    sure that he understood the magnitude of this problem and to call on
    him to bring all the stakeholders together to try to deal with it.
    So -- so the question I think that we've got to ask ourselves is,
    yes, we've got to solve this problem short-term. And we are going to
    have to intervene. There's no doubt about that.
    But we're also going to have to look at how is it that we've
    shredded some many regulations, we did not set up a 21st century
    regulatory framework to deal with these problems. And that, in part,
    has to do with an economic philosophy that says that regulation is
    always bad.

  • MR. LEHRER

    At 00:09:24
    3 seconds

    Are you going to vote for the plan, Senator McCain?

  • SEN. MCCAIN

    At 00:09:27
    2 seconds

    I -- I -- I hope so, and I believe so --

  • MR. LEHRER

    At 00:09:29
    2 seconds

    As a United States senator, you'll vote to -- you're
    going to vote for the plan?

  • SEN. MCCAIN

    At 00:09:31
    1 minute

    Sure. Sure, but -- but let me -- let me point out
    I also warned about Fannie Mae and Freddie Mac and warned about
    corporate greed and excess and CEO pay and all that. A lot of us saw
    this train wreck coming.
    But there's also the issue of responsibility. You've mentioned
    President Dwight David Eisenhower. President Eisenhower, on the night
    before the Normandy invasion, went into his room, and he wrote out two
    letters. One of them was a letter congratulating the great members of
    the military and Allies that had conducted and succeeded in the
    greatest invasion in history -- still, to this day, and forever. And
    he wrote out another letter, and that was a letter of resignation from
    the United States Army for the failure of the landings at Normandy.
    Somehow we've lost that accountability.
    I've been heavily criticized because I called for the resignation
    of the chairman of the Securities and Exchange Commission.
    We've got to start also holding people accountable, and we've got to
    reward people who succeed.
    But somehow in Washington today -- and I'm afraid on Wall Street
    -- greed is rewarded, excess is rewarded, and corruption, or certainly
    a failure to carry out our responsibility, is rewarded. As president
    of the United States, people are going to be held accountable in my
    administration. And I promise you that'll happen.

  • MR. LEHRER

    At 00:11:02
    4 seconds

    Do you have something directly to say, Senator
    Obama, to Senator McCain about what he just said?

  • SEN. OBAMA

    At 00:11:06
    40 seconds

    Well, I think Senator McCain's absolutely right that
    we need more responsibility, but we need it not just when there is a
    crisis. I mean, we've had years in which the reigning economic
    ideology has been what's good for Wall Street but not what's good for
    Main Street. And there are folks out there who have been struggling
    before this crisis took place. And that's why it's so important, as
    we solve this short-term problem, that we look at some of the
    underlying issues that have led to wages and incomes for ordinary
    Americans to go down, the -- the -- a health care system that is
    broken, energy policies that are not working, because 10 days ago John
    said that the fundamentals of the economy are sound.

  • MR. LEHRER

    At 00:11:46
    1 second

    Say -- say it directly to him.

  • SEN. OBAMA

    At 00:11:47
    1 second

    I do not think that they are.

  • MR. LEHRER

    At 00:11:48
    1 second

    Say it directly to him.

  • SEN. OBAMA

    At 00:11:49
    4 seconds

    Oh, I'll -- the -- John, 10 days ago, you said that
    the fundamentals of the economy are sound. (Laughter.)

  • MR. LEHRER

    At 00:11:53
    1 second

    (Laughs.)

  • SEN. OBAMA

    At 00:11:54
    1 second

    And --

  • SEN. MCCAIN

    At 00:11:55
    3 seconds

    Are you afraid I couldn't hear him? (Laughter.)

  • MR. LEHRER

    At 00:11:58
    3 seconds

    I'm just determined to get you all to talk to each
    other. I'm going to try. (Laughs.)

  • SEN. OBAMA

    At 00:12:01
    35 seconds

    The -- and -- and I just fundamentally disagree.
    And unless we are holding ourselves accountable day-in, day-out, not
    just when there's a crisis for folks who have power and influence and
    can hire lobbyists but for the nurse, the teacher, the police officer
    who frankly at the end of each month, they've got a little financial
    crisis going on.
    They're having to take out extra debt just to make their mortgage
    payments. We haven't been paying attention to them. And if you look
    at our tax policies, it's a classic example.

  • MR. LEHRER

    At 00:12:36
    7 seconds

    So Senator McCain, do you agree with what Senator
    Obama just said? And if you don't, tell him what you disagree with.

  • SEN. MCCAIN

    At 00:12:43
    54 seconds

    No, I, look, we've got to fix the system. We've
    got fundamental problems in the system. And Main Street is paying a
    penalty for the excesses and greed in Washington, D.C., and in the
    Wall Street.
    So there's no doubt that we have a long way to go, and obviously
    stricter interpretation and consolidation of the various regulatory
    agencies that weren't doing their job that has brought on this crisis.
    But I have a fundamental belief in the goodness and strength of the
    American worker. And the American worker is the most productive, the
    most innovative.
    America is still the greatest producer, exporter and importer.
    But we've got to get through these times. But I have a fundamental
    belief in the United States of America. And I still believe, under
    the right leadership, our best days are ahead of us.

  • MR. LEHRER

    At 00:13:37
    20 seconds

    All right. Let's go to the next lead question,
    which is essentially following up on this same subject. And you get
    two minutes to begin with, Senator McCain.
    And using your word, fundamental, are there fundamental
    differences between your approach and Senator Obama's approach to what
    you would do as president to lead this country out of the financial

  • SEN. MCCAIN

    At 00:13:57
    1 minute

    Well, the first thing we have to do is get spending
    under control in Washington. It's completely out of control. It's
    gone -- we have now presided over the largest increase in the size of
    government since the Great Society. We Republicans came to power to
    change government and government changed us.
    And the -- the worst symptom of this disease is what my friend
    Tom Coburn calls "earmarking as a gateway drug," because it's a
    gateway. It's a gateway to out-of-control spending and corruption.
    And we have former members of Congress now residing in federal prison
    because of the evils of this earmarking and pork-barrel spending.
    You know, we spent $3 million to study the DNA of bears in
    Montana. I don't know if that was a criminal issue or a paternal
    issue, but the fact is that it was $3 million of our taxpayers' money
    and it has got to be brought under control. As president of the
    United States, I want to assure you, I've got a pen -- this one's kind
    of old -- I've got a pen and I'm going to veto every single spending
    bill that comes across my desk. I will make them famous. You will
    know their names.
    Now, Senator Obama, you wanted to know one of the differences.
    He has asked for $932 million of earmark pork-barrel spending, nearly
    a million dollars for every day that he's been in the United States
    Senate.
    I suggest that people go up on the website of -- of Citizens Against
    Government Waste, and they'll look at those projects.
    That kind of thing is not the way to rein in runaway spending in
    Washington, D.C. That's one of the fundamental differences that
    Senator Obama and I have.

  • MR. LEHRER

    At 00:15:43
    2 seconds

    Senator Obama, two minutes.

  • SEN. OBAMA

    At 00:15:45
    1 minute

    Well, Senator McCain is absolutely right that the
    earmarks process has been abused, which is why I suspended any
    requests for my home states, whether it was for senior centers or what
    have you, until we cleaned it up. And he's also right that oftentimes
    lobbyists and special interests are the ones that are introducing
    these kinds of requests, although that wasn't the case with me.
    But let's be clear: earmarks account for $18 billion in last
    year's budget. Senator McCain is proposing -- and this is a
    fundamental difference between us -- $300 billion in tax cuts to some
    of the wealthiest corporations and individuals in the country, $300
    billion. Now, $18 billion is important; $300 billion is really
    important. And in his tax plan, you would have CEOs of Fortune 500
    companies getting an average of $700,000 in reduced taxes, while
    leaving 100 million Americans out.
    So my attitude is we've got to grow the economy from the bottom
    up. What I've called for is a tax cut for 95 percent of working
    families, 95 percent.
    And that means that the ordinary American out there who's collecting a
    paycheck every day -- they've got a little extra money to be able to
    buy a computer for their kid, to fill up on this gas that is killing
    them. And over time that, I think, is going to be a better recipe for
    economic growth than the -- the policies of -- of President Bush that
    John McCain wants to -- wants to follow.

  • MR. LEHRER

    At 00:17:26
    1 second

    Senator McCain?

  • SEN. MCCAIN

    At 00:17:27
    2 seconds

    Well, again, I don't mean to go back and forth, but
    he --

  • MR. LEHRER

    At 00:17:29
    1 second

    No, that's fine.

  • SEN. MCCAIN

    At 00:17:30
    1 minute

    -- Senator Obama suspended those requests for pork
    barrel projects after he was running for president of the United
    States. He didn't happen to see that light there in the first three
    years as a member of the United States Senate. Nine hundred and
    thirty-two million dollars in requests maybe to Senator Obama is not a
    lot of money. But the point is that you -- see, I hear this all the
    time. It's only $18 billion. Do you know that it's tripled in the
    last five years? Do you know that it's gone completely out of
    control, to the point where it corrupts people? It corrupts people.
    That's why we have, as I said, people under federal indictment and
    charges. It's a system that's got to be cleaned up.
    I have fought against it. My career -- I have fought against it.
    I was called the sheriff by the -- (chuckles) -- one of the senior
    members of the Appropriations Committee. I didn't win Miss
    Congeniality in the United States Senate.
    Now, Senator Obama didn't mention that along with his tax cuts he
    is also proposing some $800 billion in new spending on new programs.
    Now, that's the fundamental difference between myself and Senator
    Obama. I want to cut spending. I want to keep taxes low. The worst
    thing we could do in this economic climate is to raise people's taxes.

  • SEN. OBAMA

    At 00:18:45
    1 minute

    I don't know where John's getting his figures.
    Let's just be clear.
    What I do is, I close corporate loopholes, stop providing tax
    cuts to corporations that are shipping jobs overseas, so that we're
    giving tax breaks to companies that are investing here in the United
    States. I make sure that we have a health care system that allows for
    everyone to have basic coverage.
    I think those are pretty important priorities. And I'd pay for
    every dime of them. But let's go back to the original point.
    John, nobody is denying that $18 billion is important. And
    absolutely we need earmark reform. And when I'm president, I will go
    line by line to make sure that we are not spending money unwisely.
    But the fact is that eliminating earmarks alone is not a recipe
    for how we're going to get the middle class back on track. And when
    you look at your tax policies that are directed primarily at those who
    are doing well and you are neglecting people who are really struggling
    right now, I think, that is a continuation of the last eight years.
    And we can't afford another four.

  • MR. LEHRER

    At 00:19:51
    8 seconds

    Respond directly to him about, to Senator Obama
    about that, about the, his -- he's made it twice now about your tax,
    your policies about tax cuts.

  • SEN. MCCAIN

    At 00:19:59
    1 minute

    Well, well, let me give you an example of what
    Senator Obama finds objectionable.
    the business tax. Right now the
    United States of America business pays the second highest business
    taxes in the world, 35 percent. Ireland pays 11 percent.
    Now, if you're a businessperson and you can locate anyplace in
    the world, then obviously if you go to the country where it's 11
    percent tax versus 35, you're going to be able to create jobs,
    increase your business, make more investment, et cetera.
    I want to cut that business tax. I want to cut it so that businesses
    will remain and -- in the United States of America and create jobs.
    But again, I want to return, it's a lot more than $18 billion in
    pork-barrel spending. I can tell you it's rife. It's throughout.
    The United States Senate will take up a continuing resolution tomorrow
    or the next day -- sometime next week -- with 2,000 -- 2,000 -- look
    at them, my friends. Look at 'em. You'll be appalled. And Senator
    Obama is a recent convert, after requesting $932 million worth of
    pork-barrel spending projects.
    So the point is, I want people to have tax cuts. I want every
    family to have a $5,000 refundable tax credit so they can go out and
    purchase their own health care. I want to double the dividend, from
    $3,500 to $7,000, for every dependent child in America. I know that
    the worst thing we could possibly do is to raise taxes on anybody, and
    a lot of people might be interested in Senator Obama's definition of
    "rich."

  • MR. LEHRER

    At 00:21:41
    2 seconds

    Senator Obama, do you have a question for Senator
    McCain on that?

  • SEN. OBAMA

    At 00:21:43
    1 second

    Well, let me just make a couple of points.

  • MR. LEHRER

    At 00:21:44
    1 second

    All right.

  • SEN. OBAMA

    At 00:21:45
    1 minute

    My -- here's what I can tell the American people:
    95 percent of you will get a tax cut. And if you make less than
    $250,000 -- less than a quarter-million dollars a year -- then you
    will not see one dime's worth of tax increase.
    Now, John mentioned the fact that business taxes on paper are
    high in this country, and he's absolutely right. Here's the problem:
    There are so many loopholes that have been written into the tax code,
    oftentimes with support of Senator McCain, that we actually see our
    businesses pay effectively one of the lowest tax rates in the world.
    And what that means, then, is that there are people out there who
    are working every day who are not getting a tax cut, and you want to
    give them more. It's not like you want to close the loopholes. You
    just want to add an additional tax cut over the loopholes, and that's
    a problem.
    Just one last point I want to make. Senator McCain talked about
    providing a $5,000 health credit. Now, what he doesn't tell you is
    that he intends to, for the first time in history, tax health
    benefits. So you may end up getting a $5,000 tax credit. Here's the
    only problem: Your employer now has to pay taxes on the health care
    that you're getting from your employer, and if you end up losing your
    health care from your employer, you've got to go out on the open
    market and try to buy it.
    It is not a good deal for the American people, but it's an
    example of this notion that the market can always solve everything and
    that the less regulation we have the better off we're going to be.

  • SEN. MCCAIN

    At 00:23:21
    2 seconds

    Well, you know, let me just --

  • MR. LEHRER

    At 00:23:23
    1 second

    We got to go another lead question --

  • SEN. MCCAIN

    At 00:23:24
    21 seconds

    You know, this is -- this is -- I know we have to,
    but this is a classic example of walking the walk and talking the
    talk.
    We had an energy bill before the United States Senate. It was
    festooned with Christmas-tree ornaments. It had all kinds of breaks
    for the oil companies, I mean billions of dollars' worth.
    I voted against it; Senator Obama voted for it.

  • SEN. OBAMA

    At 00:23:45
    1 second

    John, you want to give oil companies another ($)4
    billion.

  • SEN. MCCAIN

    At 00:23:46
    55 seconds

    So you got to look at our record. You've got to
    look at our records. That's the important thing.
    Who fought against wasteful and -- and earmark spending? Who has
    been the person who has tried to keep spending under control? Who is
    the person who has believed that the best thing for America is -- is
    to have a tax system that is fundamentally fair? And I've fought to
    simplify it, and I have proposals to simplify it. Let's give every
    American a choice: two tax brackets, generous dividends, and -- and
    two -- and let Americans choose whether they want the -- the existing
    tax code or they want a new tax code.
    And so, again, look at the record, particularly the energy bill.
    But again, Senator Obama has shifted on a number of occasions. He has
    voted in the United States Senate to increase taxes on people who make
    as low as $42,000 a year.

  • SEN. OBAMA

    At 00:24:41
    1 second

    That's not true, John. That's not true.

  • SEN. MCCAIN

    At 00:24:42
    3 seconds

    And that's just a fact. Again, you can look it up.

  • SEN. OBAMA

    At 00:24:45
    15 seconds

    Look, it's just not true. And if we want to talk
    about oil company profits, under your tax plan, John -- this is
    undeniable -- oil companies would get an additional $4 billion in tax
    breaks.
    Now, look, we all would love --

  • SEN. MCCAIN

    At 00:25:00
    1 second

    (Chuckles.)

  • SEN. OBAMA

    At 00:25:01
    9 seconds

    -- to lower taxes on everybody, but here's the
    problem: if we are giving 'em to oil companies, then that means that
    there are those who are not going to be getting them. And -- and --

  • SEN. MCCAIN

    At 00:25:10
    1 second

    In all due respect, you already gave 'em to the oil
    companies. (Laughs.)

  • SEN. OBAMA

    At 00:25:11
    22 seconds

    No, but John, the -- the fact of the matter is is
    that I was opposed to those tax breaks, tried to strip them out.
    We've got an energy bill on the Senate floor right now that contains
    some good stuff, some stuff you want, including drilling offshore.
    But you're opposed to it because it would strip away those tax breaks
    that have gone to oil companies.

  • MR. LEHRER

    At 00:25:33
    28 seconds

    All right. All right.
    Speaking of things that both of you want, another lead question:
    It has to do with the rescue, the financial rescue thing that we
    started, started asking about. And what, and the first answer is to
    you, Senator Obama.
    As president, as a result, whatever financial rescue plan comes
    about and a billion, $700 billion, whatever it is it's going to cost.

  • SEN. OBAMA

    At 00:26:01
    1 second

    Right.

  • MR. LEHRER

    At 00:26:02
    10 seconds

    What are you going to have to give up, in terms of
    the priorities that you would bring as president of the United States,
    as a result of having to pay for the financial rescue plan?

  • SEN. OBAMA

    At 00:26:12
    2 minutes

    Well, there are a range things that are probably
    going to have to be delayed. We don't yet know what our tax revenues
    are going to be. The economy is slowing down.
    So it's hard to anticipate right now what the budget's going to
    look like next year. But there's no doubt that we're not going to be
    able to do everything that, I think, needs to be done. There are some
    things that, I think, have to be done.
    We have to have energy independence. So I've put forward a plan
    to make sure that in 10 years time, we have freed ourselves from
    dependence on Middle Eastern oil, by increasing production at home but
    most importantly by starting to invest in alternative energies --
    solar, wind, biodiesel -- making sure that we're developing the fuel-
    efficient cars of the future right here in the United States, in Ohio
    and Michigan instead of Japan and South Korea.
    We have to fix our health care system, which is putting an
    enormous burden on families. Just -- a report just came out that the
    average deductible went up 30 percent on American families. They are
    getting crushed, and many of them are going bankrupt as a consequence
    of health care. I'm meeting folks all over the country. We have to
    do that now, because it'll actually make our businesses and our
    families better off.
    The third thing we have to do is we've got to make sure that
    we're competing in education. We've got to invest in science and
    technology. China had a space launch and a space walk. We've got to
    make sure that our children are keeping pace in math and in science.
    And one of the things I think we have to do is make sure that college
    is affordable for every young person in America.
    And I also think that we're going to have to rebuild our
    infrastructure, which is falling behind -- our roads, our bridges, but
    also broadband lines that reach into rural communities; also making
    sure that we have a new electricity grid to get the alternative energy
    to population centers that are using them.
    So there's some -- some things that we've got to do structurally
    to make sure that we can compete in this global economy. We can't
    shortchange those things. We've got to eliminate programs that don't
    work, and we've got to make sure that the programs that we do have are
    more efficient and cost less.

  • MR. LEHRER

    At 00:28:13
    9 seconds

    Are you -- what priorities would you adjust as
    president, Senator McCain, because of the financial bailout cost?

  • SEN. MCCAIN

    At 00:28:22
    1 minute

    Well, look, look, we -- no matter what, we've got
    to cut spending. We have -- as I said, we've let government get
    completely out of control.
    Senator Obama has the most liberal voting record in the United
    States Senate. It's hard to reach across the aisle from that far to
    the left. (Chuckles.)
    (View cut data) The point -- the point is -- the point is we need to examine every
    agency of government. First of all, by the way, I'd eliminate ethanol
    subsidies. I oppose ethanol subsidies.
    I think that we have to return, particularly in defense spending,
    which is the largest part of our appropriations -- we have to do away
    with cost-plus contracts. We now have defense systems that the costs
    are completely out of control. We tried to build a little ship called
    the Littoral Combat Ship that supposed to cost $140 million, ended up
    costing $400 million and we still haven't done it.
    So we need to have fixed-cost contracts. We need very badly to
    understand that defense spending is very important and vital,
    particularly in the new challenges we face in the world, but we have
    to get a lot of the cost overruns under control. I know how to do
    that.
    I saved the taxpayers $6.8 billion by fighting a contract that
    was negotiated between Boeing and DOD that was completely wrong. And
    we fixed it and we killed it and the people ended up in federal
    prison. So I know how to do this, because I've been involved in these
    issues for many, many years.
    But I think that we have to examine every agency of government
    and find out those that are doing their job and keep them and find out
    those that aren't and eliminate them. And we'll have to scrub every
    agency of government.

  • MR. LEHRER

    At 00:30:06
    10 seconds

    If I hear the two of you correctly, neither one of
    you is suggesting any major changes in what you want to do as
    president as a result of the financial bailout. Is that what you're
    saying?

  • SEN. OBAMA

    At 00:30:16
    1 second

    Well, no, the --

  • SEN. MCCAIN

    At 00:30:17
    1 second

    I'm --

  • SEN. OBAMA

    At 00:30:18
    2 seconds

    As -- as I said before, Jim, there -- there are
    going to be things that end up having to be --

  • MR. LEHRER

    At 00:30:20
    1 second

    Like what?

  • SEN. OBAMA

    At 00:30:21
    14 seconds

    -- deferred and delayed.
    Well, look, the -- I want to make sure that we are investing in
    energy in order to free ourselves on dependence on foreign oil. Now,
    that is a big project. That is a multi-year project.

  • MR. LEHRER

    At 00:30:35
    1 second

    But you're not willing to give that up, are you?

  • SEN. OBAMA

    At 00:30:36
    1 minute

    But -- well, I'm not willing to give up the need to
    do it, but there may be individual components of it that we can't do.
    But -- but John's right that we've got to make some cuts. We
    right now give $15 billion every year as subsidies to private insurers
    under the Medicare system. It doesn't work any better through this
    private insurers; they just skim off $15 billion. That was a
    giveaway, and part of the reason is is because lobbyists are able to
    shape how Medicare works. They did it on the prescription drug bill.
    They've done it with respect to Medicare.
    And we are going to have to change the culture. One of -- you
    know, Tom -- or John mentioned me being wildly liberal. Mostly that's
    just me opposing George Bush's wrongheaded policies since -- that I --
    since I've been in Congress. But I think that it is also important to
    recognize that I worked with Tom Coburn, the most conservative -- one
    of the most conservative Republicans, who John already mentioned, to
    set up what we call a Google for Government, which says that we are
    going to list every dollar of federal spending to make sure that the
    taxpayer can take a look and see who, in fact, is -- is promoting some
    of these spending projects that John's been railing about.

  • SEN. MCCAIN

    At 00:31:51
    2 seconds

    What I'm trying to get at is this --

  • MR. LEHRER

    At 00:31:53
    24 seconds

    Excuse me -- excuse me, if I may, Senator. I'm
    trying to get at that you all -- one of you is going to be the
    president of the United States come January, at the -- in the middle
    of a huge financial crisis that is yet to be resolved.
    (View cut data) And what I'm trying to get at is how this is going to affect you not
    in very -- in small ways, but in major ways, and the approach you
    would take as -- to the presidency.

  • SEN. MCCAIN

    At 00:32:17
    7 seconds

    Well, how about a spending freeze on everything but
    Defense, Veteran(s) Affairs and entitlement programs?

  • MR. LEHRER

    At 00:32:24
    1 second

    Spending freeze?

  • SEN. MCCAIN

    At 00:32:25
    7 seconds

    I think we ought to seriously consider, with the
    exceptions of caring for our veterans, national defense and several
    other vital issues.

  • MR. LEHRER

    At 00:32:32
    2 seconds

    Would you go for that?

  • SEN. OBAMA

    At 00:32:34
    35 seconds

    Well, the problem with a spending freeze is you're
    using a hatchet where you need a scalpel. There are some programs
    that are very important that are currently underfunded. I want to
    increase early childhood education. And the notion that we should
    freeze that when there may be, for example, this Medicare subsidy I
    think doesn't make sense.
    Let me tell you another place where I'd like to look for some
    savings. We're currently spending $10 billion a month in Iraq when
    they have a $79 billion surplus. It seems to me that if we're going
    to be strong at home as well as strong abroad, that we've got to look
    at bringing that war to a close.

  • SEN. MCCAIN

    At 00:33:09
    56 seconds

    Look, we're sending $700 billion a year overseas to
    countries that don't like us very much. Some of that money ends up in
    the hands of terrorist organizations. We have to have the wind, tide,
    solar, natural gas, flex-fuel cars and all that, but we also have to
    have offshore drilling and we also have to have nuclear power.
    (View cut data) Senator Obama opposed both storing and reprocessing of spent nuclear
    fuel. You can't get there from here. And the fact is that we can
    create 700,000 jobs by building, constructing 45 new nuclear power
    plants by the year 2030.
    Nuclear power is not only important as far as eliminating our
    dependence on foreign oil but it's also important as far as climate
    change is concerned, an issue that I have been involved in for many,
    many years. And I've proud of the work that I've done there, along
    with Senator Clinton.

  • MR. LEHRER

    At 00:34:05
    22 seconds

    Let me see, before we go to another lead question,
    let me see if I can figure out a way to ask the same question a
    different, slightly different way here.
    Are you, are you willing to acknowledge, both of you, that this
    financial crisis is going to affect the way you rule the country, as
    president of the United States, beyond the kinds of things that you've
    already, I mean, is it a major move? Is it going to have a major
    effect?

  • SEN. OBAMA

    At 00:34:27
    1 minute

    There is no doubt that it's going to affect our
    budgets. There is no doubt about it.
    The -- not only -- even if we get all $700 billion back, let's
    assume the markets recover; we're holding assets long enough that
    eventually taxpayers get it back. And that happened during the Great
    Depression, when Roosevelt purchases a whole bunch of homes. Over
    time, home values went back up. And in fact, government made a
    profit.
    If we're lucky and we do it right, that could potentially happen.
    But in the short term, there's an outlay. And we may not see that
    money for a while. And because the economy is slowing down, I think,
    we can also expect less tax revenue.
    So there's no doubt that as president, I'm going to have to make
    some tough decisions. The only point I want to make is this, that in
    order to make those tough decisions, we've got to know what our values
    are and who we're fighting for and what our priorities are.
    (View cut data) And if we are spending $300 billion on tax cuts for people who don't
    need them and weren't even asking for them and we are leaving out
    health care, which is crushing on people all across the country, then
    I think we have made a bad decision, and I want to make sure we're not
    shortchanging our long-term priorities.

  • SEN. MCCAIN

    At 00:35:39
    1 minute

    Well, I want to make sure that we're not handing
    the health care system over to the federal government which is
    basically what would ultimately happen with Senator Obama's health
    care plan. I want the families to make the decisions between
    themselves and their -- and their doctors, not the federal government.
    Look, we have to obviously cut spending. I have fought to cut
    spending. Senator Obama has $800 billion in new spending programs. I
    would suggest he start by canceling some of those new spending
    programs that he has.
    We can, I think, adjust spending around to take care of the very
    much-needed programs including taking care of our veterans. But I
    also want to say again, a healthy economy with low taxes, with not
    raising anyone's taxes is probably the best recipe for eventually
    having our economy recover. And spending restraint has got to be a
    vital part of that.
    And the reason -- one of the major reasons why we're in the
    difficulties we're in today is because spending got out of control.
    We owe China $500 billion. And spending, I know, can be brought under
    control because I have fought against excessive spending my entire
    career. And I got plans to reduce and eliminate unnecessary and
    wasteful spending.
    (View cut data) And if there's anybody here who thinks there aren't agencies of
    government where spending can be cut and their budget slashed, they
    have not spent a lot of time in Washington.

  • SEN. OBAMA

    At 00:37:15
    37 seconds

    But I just have to have make this point, Jim. John,
    it's been your president, who you said you agreed with 90 percent of
    the time, who presided over this increase in spending, this orgy of
    spending, and enormous deficits. And you voted for almost all of his
    budgets. So to stand here after eight years and say that you're going
    to lead on controlling spending and, you know, balancing our tax cuts
    so that they help middle-class families, when over the last eight
    years that hasn't happened, I think just is, you know, kind of hard to
    swallow.

  • SEN. MCCAIN

    At 00:37:52
    1 second

    It's -- it's --

  • MR. LEHRER

    At 00:37:53
    1 second

    Quick response to Senator Obama.

  • SEN. MCCAIN

    At 00:37:54
    24 seconds

    -- it's well-known -- it's well-known that I have
    not been elected Miss Congeniality in the United States Senate, nor
    with the administration. I have opposed the president on spending, on
    climate change, on torture of prisoners, on -- on Guantanamo Bay, on a
    long -- on the way that the Iraq war was conducted. I have a long
    record, and the American people know me very well.

  • MR. LEHRER

    At 00:38:18
    1 second

    All right --

  • SEN. MCCAIN

    At 00:38:19
    8 seconds

    And that is independent and a maverick of the
    Senate. And I'm happy to say that I've got a partner that's a good
    maverick along with me now.

  • MR. LEHRER

    At 00:38:27
    13 seconds

    All right. Let's go to another subject. Lead
    question. Two minutes to you, Senator McCain. Much has been said
    about the lessons of Vietnam.
    (View cut data) What do you see as the lessons of Iraq?

  • SEN. MCCAIN

    At 00:38:40
    1 minute

    I think the lessons of Iraq are very clear, that
    you cannot have a failed strategy that will then cause you to nearly
    lose a conflict.
    Our initial military success, we went into Baghdad and everybody
    celebrating, and then the war was very badly mishandled. I went to
    Iraq in 2003 and came back and said we've got to change the strategy.
    This strategy requires additional troops, it requires a fundamental
    change in strategy, and I fought for it. And finally we came up with
    a great general and a strategy that has succeeded. This strategy has
    succeeded, and we are winning in Iraq. And we will come home with
    victory and with honor. And that withdrawal is the result of every
    counterinsurgency that succeeds.
    And I want to tell you that now that we will succeed and our
    troops will come home, and not in defeat, that we will see a stable
    ally in the region and a fledgling democracy. The consequences of
    defeat would have been increased Iranian influence, it would have been
    increasing sectarian violence, it would have been a -- a wider war,
    which the United States of America might have had to come back. So
    there was a lot at stake there. And thanks to this great general,
    David Petraeus, and the troops who serve under him, they have
    succeeded, and we are winning in Iraq, and we will come home -- and we
    will come home as we have when we have won other wars and not in
    defeat.

  • MR. LEHRER

    At 00:40:23
    2 seconds

    Two minutes for how you see the lessons of Iraq,
    Senator Obama.

  • SEN. OBAMA

    At 00:40:25
    1 minute

    Well, this is an area where Senator McCain and I
    have a fundamental difference because, I think, the first question is
    whether we should have gone into the war in the first place.
    Now, six years ago, I stood up and opposed this war, at a time
    when it was politically risky to do so, because I said that not only
    did we not know how much it was going to cost, what our exit strategy
    might be, how it would affect our relationships around the world and
    whether our intelligence was sound but also because we hadn't finished
    the job in Afghanistan. We hadn't caught bin Laden. We hadn't put al
    Qaeda to rest. And as a consequence, I thought that it was going to
    be a distraction.
    Now, Senator McCain and President Bush had a very different
    judgment. And I wish I had been wrong, for the sake of the country,
    and they had been right. But that's not the case.
    We've spent over $600 billion so far, soon to be a trillion. We
    have lost over 4,000 lives. We have seen 30,000 wounded. And most
    importantly from a strategic, national security perspective, al Qaeda
    is resurgent, stronger now than at any time since 2001.
    We took our eye off the ball and not to mention that we are still
    spending $10 billion a month, when they have a $79 billion surplus, at
    a time when we are in great distress here at home and we just talked
    about the fact that our budget is way overstretched, and we are
    borrowing money from overseas to try to finance just some of the basic
    functions of our government.
    (View cut data) So I think the lesson to be drawn is that we should never hesitate to
    use military force, and I will not as president in order to keep the
    American people safe. But we have to use our military wisely, and we
    did not use our military wisely in Iraq.

  • MR. LEHRER

    At 00:42:20
    2 seconds

    Do you agree with that lesson of Iraq?

  • SEN. MCCAIN

    At 00:42:22
    47 seconds

    No, the next president of the United States is not
    going to have to address the issue as to whether we went into Iraq or
    not. The next president of the United States is going to have to
    decide how we leave, when we leave, and what we leave behind. That's
    the decision of the next president of the United States.
    Senator Obama said the surge could not work, said it would
    increase sectarian violence, said it was doomed to failure. Recently
    on a television program he said it exceeded our wildest expectations.
    But yet, after conceding that, he still says that he would oppose the
    surge if he had to decide that again today. Incredibly -- incredibly
    -- Senator Obama didn't go to Iraq for 900 days, and never asked for a
    meeting with General Petraeus.

  • MR. LEHRER

    At 00:43:09
    1 second

    Well, let's go at some of these --

  • SEN. MCCAIN

    At 00:43:10
    7 seconds

    Senator Obama is the chairperson of a committee
    that oversights NATO, that's in Afghanistan. To this day he's never
    had a hearing.

  • MR. LEHRER

    At 00:43:17
    1 second

    What about that point?

  • SEN. MCCAIN

    At 00:43:18
    1 second

    I mean, it's remarkable.

  • MR. LEHRER

    At 00:43:19
    1 second

    All right, what about --

  • SEN. OBAMA

    At 00:43:20
    1 second

    Which point? You raised a whole bunch of them.

  • MR. LEHRER

    At 00:43:21

    Well, the latter point. I know. All right.

  • SEN. MCCAIN

    At 00:43:21
    2 seconds

    Yeah. (Chuckles.)

  • MR. LEHRER

    At 00:43:23
    3 seconds

    Let's go to the latter point and we'll back up, the
    point about your not having been --

  • SEN. OBAMA

    At 00:43:26
    47 seconds

    Look, the -- I'm very proud of my vice presidential
    selection, Joe Biden, who's the chairman of the Senate Foreign
    Relations Committee. And as he explains and as John well knows, the
    issues of Afghanistan, the issues of Iraq, critical issues like that
    don't go through my subcommittee because they're done as a committee
    as a whole.
    (View cut data) But that's Senate inside baseball.
    Let's get back to the core issue here. Senator McCain is
    absolutely right that the violence has been reduced as a consequence
    of the extraordinary sacrifice of our troops and our military
    families. They have done a brilliant job and General Petraeus has
    done a brilliant job.
    But understand, that was a tactic designed to contain the damage
    of the previous four years of mismanagement of this war.

  • SEN. MCCAIN

    At 00:44:13
    1 second

    Senator --

  • SEN. OBAMA

    At 00:44:14
    27 seconds

    And so -- so John likes -- John, you like to pretend
    like the war started in 2007. You talk about the surge. The war
    started in 2003. And at the time, when the war started, you said it
    was going to be quick and easy. You said we knew where the weapons of
    mass destruction were. You were wrong. You said that we were going
    to be greeted as liberators. You were wrong. You said that there was
    no history of violence between Shi'a and Sunni and you were wrong.

  • SEN. MCCAIN

    At 00:44:41
    1 second

    (Inaudible) -- Senator Obama --

  • SEN. OBAMA

    At 00:44:42
    1 second

    And so if the question is of judgment, about whether
    or not --

  • SEN. MCCAIN

    At 00:44:43
    1 second

    Senator Obama doesn't know what --

  • SEN. OBAMA

    At 00:44:44
    19 seconds

    -- whether or not -- if the question who is best
    equipped as the next president to make good decisions about how we use
    our military, how we make sure that we are prepared and ready for the
    next conflict, then I think we can take a look at our judgment.

  • MR. LEHRER

    At 00:45:03
    1 second

    We got a lot a lot on plate here --

  • SEN. MCCAIN

    At 00:45:04
    48 seconds

    I'm afraid -- I'm afraid Senator Obama doesn't
    understand the difference between a tactic and a strategy, but the
    important -- I'd like to tell you, two 4ths of July ago I was in
    Baghdad. General Petraeus invited Senator Lindsey Graham and me to
    attend a ceremony where 688 brave young Americans whose enlistment had
    -- had expired were reenlisting to stay and fight for Iraqi freedom
    and American freedom.
    (View cut data) I was honored to be there. I was honored to speak to those troops.
    And you know, afterwards we spent a lot of time with them. And
    you know what they said to us? They said, "Let us win." They said,
    "Let us win. We don't want our kids coming back here." And this
    strategy and this general, they are winning.
    Senator Obama refuses to acknowledge that we are winning in Iraq.

  • SEN. OBAMA

    At 00:45:52
    1 second

    That's not true. That's not true.

  • SEN. MCCAIN

    At 00:45:53
    27 seconds

    They just passed an electoral -- an election law
    just in the last few days. There is social/economic progress, and a
    strategy -- a strategy of going into an area, clearing and holding,
    and the people of the country then become allied with you. They
    inform on the bad guys, and peace comes to the country, and
    prosperity. That's what's happening in Iraq, and it wasn't a tactic.
    It was a strategy --

  • MR. LEHRER

    At 00:46:20
    1 second

    Let me see --

  • SEN. OBAMA

    At 00:46:21
    1 second

    Jim, this is a big --

  • SEN. MCCAIN

    At 00:46:22
    5 seconds

    -- and that same strategy will be employed in
    Afghanistan by this great general.

  • SEN. OBAMA

    At 00:46:27
    1 second

    Jim --

  • SEN. MCCAIN

    At 00:46:28
    10 seconds

    And Senator Obama, who after promising not to vote
    to cut off funds for the troops, did the incredible thing of voting to
    cut off the funds for the troops in Iraq and Afghanistan.

  • SEN. OBAMA

    At 00:46:38
    2 minutes

    Jim, there are a whole of bunch of things we got to
    answer.
    First of all, let's talk about this -- this troop funding issue,
    because John always brings this up. Senator McCain cut -- Senator
    McCain opposed funding for troops in legislation that had a timetable
    because he didn't believe in a timetable. I opposed funding a mission
    that had no timetable and was open-ended, giving a blank check to
    George Bush.
    (View cut data) We had a difference on the timetable. We didn't have a difference on
    whether or not we were going to be funding troops.
    We had a legitimate difference. And I absolutely understand the
    difference between tactics and strategy. And the strategic question
    that the president has to ask is not whether or not we are employing a
    particular approach in the country, once we have made the decision to
    be there. The question is, was this wise?
    We have seen Afghanistan worsen, deteriorate. We need more
    troops there. We need more resources there. Senator McCain in the
    rush to go into Iraq said, you know what; we've been successful in
    Afghanistan; there is nobody who can pose a threat to us there.
    This is at a time when bin Laden was still out. And now they've
    reconstituted themselves. Secretary of Defense Robert Gates himself
    acknowledges, the war on terrorism started in Afghanistan and it needs
    to end there. But we can't do it if we are not going to give Iraq
    back its country.
    Now, what I've said is, we should end this war responsibly; we
    should do it in phases. But in 16 months, we should be able to reduce
    our combat troops, put, provide some relief to military families and
    our troops and bolster our efforts in Afghanistan so that we can
    capture and kill bin Laden and crush al Qaeda.
    And right now the commanders in Afghanistan as well as Admiral
    Mullen have acknowledged that we don't have enough troops to deal with
    Afghanistan because we still have more troops in Iraq than we did
    before the surge.

  • SEN. MCCAIN

    At 00:48:40
    5 seconds

    Admiral Mullen suggests that Senator Obama's plan
    is dangerous for America.

  • SEN. OBAMA

    At 00:48:45
    1 second

    That's not the case.

  • SEN. MCCAIN

    At 00:48:46
    1 second

    That's what -- that's what Admiral Mullen said.
    And I --

  • SEN. OBAMA

    At 00:48:47
    1 second

    What he said was a precipitous withdrawal would be
    dangerous. He did not say that.

  • SEN. MCCAIN

    At 00:48:48
    1 second

    Well, that's what Admiral Mullen said, was --

  • SEN. OBAMA

    At 00:48:49
    1 second

    That's not true.

  • SEN. MCCAIN

    At 00:48:50
    40 seconds

    And also General Petraeus said the same thing.
    Osama bin Laden and General Petraeus have one thing in common
    that I know of: they both said that Iraq is the central battleground.
    Now, General Petraeus has praised the successes, but he said those
    successes are fragile. And if we set a specific date for withdrawal
    -- and by the way, Senator Obama's original plan they would have been
    out last spring, before this surge ever had a chance to succeed.
    And I -- and I'm -- I'm -- understand why Senator Obama was
    surprised and said that the surge succeeded beyond his wildest
    expectations. Didn't exceed beyond mine --

  • SEN. OBAMA

    At 00:49:30

    Well --

  • SEN. MCCAIN

    At 00:49:30
    17 seconds

    -- because I know that that's a strategy that has
    worked and can succeed. But if we snatch defeat from the jaws of
    victory and adopt Senator Obama's plan, then we will have a wider war
    and it'll make things more complicated throughout the region,
    including in Afghanistan.

  • MR. LEHRER

    At 00:49:47
    17 seconds

    Afghanistan. Lead -- a new lead question. Having
    resolved Iraq, we'll move to Afghanistan. (Laughter.) And it goes to
    you, Senator Obama, and it's -- it's -- it picks up on a point that's
    already been made. Do you think more troop -- more U.S. troops should
    be sent to Afghanistan? How many, and when?

  • SEN. OBAMA

    At 00:50:04
    2 minutes

    Yes, I think we need more troops. I've been saying
    that for over a year now. And I think that we have to do it as
    quickly as possible because it's been acknowledged by the commanders
    on the ground the situation is getting worse, not better.
    We had the highest fatalities among U.S. troops this past year
    than at any time since 2002. And we are seeing major offensive taking
    place -- al Qaeda and Taliban crossing the border and attacking our
    troops in a brazen fashion.
    (View cut data) They are feeling emboldened.
    And we cannot separate Afghanistan from Iraq, because what our
    commanders have said is we don't have the troops right now to deal
    with Afghanistan. So I would send two to three additional brigades to
    Afghanistan.
    Now, keep in mind that we have four times the number of troops in
    Iraq, where nobody had anything to do with 9/11 before we went in,
    where in fact there was no al Qaeda before we went in, but we have
    four times more troops there than we do in Afghanistan. And that is a
    strategic mistake, because every intelligence agency will acknowledge
    that al Qaeda is the greatest threat against the United States and
    that -- Secretary of Defense Gates acknowledged the central front, the
    place where we have to deal with these folks is going to be in
    Afghanistan and in Pakistan.
    So here's what we have to do comprehensively, though -- it's not
    just more troops. We have to press the Afghan government to make
    certain that they are actually working for their people. And I've
    said this to President Karzai.
    Number two, we've got to deal with a growing poppy trade that has
    exploded over the last several years.
    Number three, we've got to deal with Pakistan, because al Qaeda
    and the Taliban have safe havens in Pakistan across the border in the
    northwest regions and although, you know, under George Bush, with the
    support of Senator McCain, we've been giving them $10 billion over the
    last seven years, they have not done what needs to be done to get rid
    of those safe havens. And until we do, Americans here at home are not
    going to be safe.

  • MR. LEHRER

    At 00:52:13
    3 seconds

    Afghanistan, Senator McCain.

  • SEN. MCCAIN

    At 00:52:16
    2 minutes

    First of all, I won't repeat the mistake that I
    regret enormously, and that is after we were able to help the Afghan
    freedom fighters and drive the Russians out of Afghanistan, we
    basically washed our hands of the region, and the result over time was
    the Taliban, al Qaeda, and the -- a lot of the difficulties we are
    facing today. So we can't ignore those lessons of history.
    Now, on this issue of aiding Pakistan, "if you're going to aim a
    gun at somebody," George Schultz, our great secretary of State, told
    me once, "you better be prepared to pull the trigger." I'm not
    prepared at this time to cut off aid to Pakistan, so I'm not prepared
    to threaten it, as Senator Obama apparently wants to do, as he has
    said that he would announce military strikes into Pakistan. We've got
    to get the support of the people of -- of Pakistan. He said that he
    would launch military strikes into Pakistan.
    Now, you don't do that. You don't say that out loud. If you
    have to do things, you have to do things, and you work with the
    Pakistani government.
    Now, the new president of Pakistan, Qadari (sic/Zardari), has got
    his hands full. And this area on the border is not been governed
    since the days of Alexander the Great. I've been to Waziristan. I
    can see how tough that terrain is. It's ruled by a handful of tribes.
    And yes, Senator Obama calls for more troops, but what he doesn't
    understand, it's got to be a new strategy -- the same strategy that he
    condemned in Iraq -- that's going to have to be employed in
    Afghanistan. And we're going to have to help the Pakistanis go into
    these areas and obtain the allegiance of the people, and it's going to
    be tough.
    (View cut data) They've intermarried with al Qaeda and the Taliban. And it's going to
    be tough. But we have to get the cooperation of the people in those
    areas.
    And the Pakistanis are going to have to understand that that
    bombing in the Marriott Hotel in Islamabad was a signal from the
    terrorists that they don't want that government to cooperate with us
    in combatting the Talipan -- Taliban and jihadist elements.
    So we've got a lot of work to do in Afghanistan. But I'm
    confident, now that General Petraeus is in the new position of
    command, that we will employ a strategy which not only means
    additional troops. And by the way, there have been 20,000 additional
    troops, from 32 to 53,000, and there needs to be more.
    So it's not just the addition of troops that matters. It's a
    strategy that will succeed. And Pakistan is a very important element
    in this. And I know how to work with them. And I guarantee you, I
    would not publicly state that I'm going to attack them.

  • SEN. OBAMA

    At 00:55:00
    1 minute

    Nobody talked about attacking Pakistan.
    Here's what I said, and if John wants to disagree with this, he
    can let me know, that if the United States has al Qaeda, bin Laden,
    top-level lieutenants in our sights, and Pakistan is unable or
    unwilling to act, then we should take them out.
    Now, I think that's the right strategy. I think that's the right
    policy. And John, I -- you're absolutely right that presidents have
    to be prudent in what they say. But you know, coming from you who,
    you know, in the past have threatened extinction for North Korea and,
    you know, sung songs about bombing Iran, I don't know, you know, how
    credible that is. I think this is the right strategy.
    Now, Senator McCain is also right that it's difficult. This is
    not an easy situation.
    (View cut data) You've got cross-border attacks against U.S. troops, and we've got a
    choice. We could allow our troops to just be on the defensive and
    absorb those blows again and again and again if Pakistan is unwilling
    to cooperate, or we have to start making some decisions.
    And the problem, John, with -- with the strategy that's been
    pursued was that for 10 years we coddled Musharraf; we alienated the
    Pakistani population because we were anti-democratic; we had a 20th
    century mind-set that basically said, well, you know, he may be a
    dictator, but he's our dictator; and as a consequence, we lost
    legitimacy in Pakistan. We spent $10 billion. And in the meantime,
    they weren't going after al Qaeda, and they are more powerful now than
    any time since we began the war in Afghanistan. That's going to
    change when I'm president of the United States.

  • SEN. MCCAIN

    At 00:56:49
    2 minutes

    I don't think that Senator Obama understands that
    there was a failed state in Pakistan when Musharraf came to power.
    Everybody who was around then and had been there and knew about it
    knew that it was a failed state.
    But let me tell you, you know, this business about bombing Iran
    and all that -- let me tell you my record. Back in 1983, when I was a
    brand-new United States congressman, the one -- the person I admired
    the most and still admire the most, Ronald Reagan, wanted to send
    Marines into Lebanon. And I saw that, and I saw the situation. And I
    stood up and I voted against that because I was afraid that they
    couldn't make peace in a place where 300 or 400 or several hundred
    Marines would make a difference. Tragically, I was right. Nearly 300
    Marines lost their lives in the bombing of the barracks.
    And then we had -- then we had the first Gulf War. I supported
    -- I supported that.
    I supported us going into Bosnia when a number of my own party
    and colleagues was against that operation in Bosnia. It was the right
    thing to do to stop genocide and to preserve what was necessary inside
    of Europe.
    I supported what we did in Kosovo. I supported it because ethnic
    cleansing and genocide was taking place there.
    And I have a record.
    In Somalia, I opposed that we should turn -- turn the force in
    Somalia from a peacekeeping force into a peacemaking force, which they
    were not capable of.
    So I have a record. I have a record of being involved in these
    national security issues, which involved the highest responsibility
    and the toughest decisions that any president can make, and that is to
    send our young men and women into harm's way.
    And I'll tell you, I had a town hall meeting in Wolfeboro, New
    Hampshire, and a woman stood up and she said, "Senator McCain, I want
    you to do me the honor of wearing a bracelet with my son's name on it.
    He was 22 years old and he was killed in combat outside of Baghdad" --
    Matthew Stanley -- "before Christmas last year." This was last August
    a year ago.
    And I said, I will -- "I will wear his bracelet with honor." And
    this was August a year ago.
    And then she said, "But, Senator McCain, I want you to" do every
    -- "promise me one thing, that you'll do everything in your power to
    make sure that my son's death was not in vain." That means that that
    mission succeeds, just like those young people who reenlisted in
    Baghdad, just like the mother I met at the airport the other day whose
    son was killed.
    (View cut data) And they all say to me that we don't want to defeat.
    I know what it's like when an army is defeated. A war that I was
    in where we had an army that -- it wasn't through any fault of their
    own, but they were defeated. And I know how hard it is to -- for that
    -- to -- for an army and a military to recover from that.

  • MR. LEHRER

    At 00:59:46
    1 second

    Senator --

  • SEN. MCCAIN

    At 00:59:47
    7 seconds

    And it did. And we will win this one, and we won't
    come home in defeat and dishonor and probably have to go back if we
    fail.

  • SEN. OBAMA

    At 00:59:54
    1 minute

    Jim, let me just make a point. I've got a bracelet,
    too, from Sergeant -- from the mother of Sergeant Ryan David Jopek,
    given to me in Green Bay. And she asked me, "Can you please make sure
    that another mother's not going through what I'm going through?"
    Now, the -- no U.S. soldier ever dies in vain, because they are
    carrying out the missions of their commander in chief. And we honor
    all the service that they've provided. And they've -- our troops have
    performed brilliantly.
    The question is for the next president -- are we making good
    judgments about how to keep America safe -- precisely because sending
    our military into battle is such an enormous step.
    And the point that I originally made is that we took our eye off
    Afghanistan; we took our eye off the folks who perpetrated 9/11. They
    are still sending out videotapes. And Senator McCain, nobody's
    talking about defeat in Iraq, but, you know, I have to say that we are
    having enormous problems in Afghanistan because of that decision. And
    it is not true that you have consistently been concerned about what
    happened in Afghanistan. I mean, at -- at one point, while you were
    focused on Iraq, you said, well, we can muddle through Afghanistan.
    You don't muddle through the central front on terror. And you
    don't muddle through going after bin Laden. You don't muddle through
    stamping out the Taliban. I think that is something that we have to
    take seriously. And when I'm president, I will.
    (Cross talk.)

  • SEN. MCCAIN

    At 01:01:33
    56 seconds

    You know, you might, you might think that with that
    kind of concern, that Senator Obama would have gone to Afghanistan
    particularly given his responsibilities as the subcommittee chairman.
    And by the way, when I'm subcommittee chairman, we take up the issues
    under my subcommittee.
    But the important thing is, the important thing is, I've visited
    Afghanistan and I've traveled to Waziristan and I've traveled to these
    places. And I know what our security requirements are and I know what
    our needs are. And so the point is that we will prevail in
    Afghanistan. But we need the new strategy and we need it to succeed.
    But the important thing is, if we suffer defeat in Iraq, which
    General Petraeus predicts we will if we adopted Senator Obama's set
    date for withdrawal, then that will have a calamitous effect on
    Afghanistan and American national security interest in the region.
    Senator Obama doesn't seem to understand, there's a connection between
    the two.

  • MR. LEHRER

    At 01:02:29
    8 seconds

    I have some good news and bad news for the two of
    you. You all are even on time, which is remarkable considering we've
    been going at it for --

  • SEN. OBAMA

    At 01:02:37
    2 seconds

    Testimony to you, Jim.

  • MR. LEHRER

    At 01:02:39
    21 seconds

    Well, I don't know about that.
    But the bad news is that all my little five-minute things have
    run over. So anyhow, we'll adjust as we get there. But the amount of
    time is even.
    New, new, new lead question and it goes two minutes to you,
    Senator McCain.
    What is your reading of the threat from Iran right
    now to the security of the United States?

  • SEN. MCCAIN

    At 01:03:00
    2 minutes

    My reading of the threat from Iran is that if Iran
    acquires nuclear weapons, it's an existential threat to the state of
    Israel. And it is a threat to the region, because the other countries
    in the region will feel a compelling requirement to acquire nuclear
    weapons as well.
    Now, we cannot allow a second Holocaust. Let's just make that
    very clear. But I have proposed for a long time -- and I've had
    conversation with foreign leaders about -- forming a league of
    democracies.
    Let's be clear and let's have some straight talk: the Russians
    are preventing significant action in the United Nations Security
    Council. I have proposed a league of democracies, a group of people
    -- a group of countries that share common interests, common values,
    common ideals. And they also control a lot of the world's economic
    power. We could impose significant, meaningful, painful sanctions on
    the Iranians that I think could have a beneficial effect.
    The Iranians have a lousy government, so therefore their economy
    is lousy even though they have significant oil revenues. So I am
    convinced that together we can, with the French, with the British,
    with the Germans and other countries -- democracies around the world,
    we can affect Iranian behavior.
    But have no doubt -- but have no doubt that the Iranians continue
    on the path to the acquisition of a nuclear weapon as we speak
    tonight. And it is a threat not only in the region, but around the
    world.
    But I'd also like to point out the Iranians are putting the most
    lethal IEDs into Iraq, which are killing young Americans. There are
    special groups in Iran that are coming into Iraq and are being trained
    in Iran.
    (View cut data) And there is the -- are the Republican Guard in Iran, which Senator
    Kyl had an amendment in order to declare them a sponsor of terror.
    Senator Obama said that would be provocative.
    So this is a serious threat. This is a serious threat to the
    security in the world, and I believe we can act, and we can act with
    our friends and allies and -- and reduce that threat as quickly as
    possible. But have no doubt about the ultimate result of them
    acquiring nuclear weapons.

  • MR. LEHRER

    At 01:05:30
    1 second

    Two minutes on Iran, Senator Obama.

  • SEN. OBAMA

    At 01:05:31
    1 minute

    Well, let me just correct something very quickly. I
    believe that the Republican Guard of Iran is a terrorist organization.
    I've consistently said so.
    What Senator McCain refers to is a measure in the Senate that
    would try to broaden the mandate inside of Iraq to deal with Iran.
    And ironically, the single thing that has strengthened Iran over the
    last several years has been the war in Iraq. Iraq was Iran's mortal
    enemy. That was cleared away, and what we've seen over the last
    several years is Iran's influence grow. They have funded Hezbollah.
    They have funded Hamas. They have gone from zero centrifuges to 4,000
    centrifuges to develop a nuclear weapon. So obviously our policy over
    the last eight years has not worked.
    Now, Senator McCain is absolutely right; we cannot tolerate a
    nuclear Iran. It would be a game-changer. Not only would it threaten
    Israel, a country that is our stalwart ally, but it would also create
    an environment in which you could set up an arms race in the Middle
    East.
    Now here's what we need to do. We do need tougher sanctions. I
    do not agree with Senator McCain that we're going to be able to
    execute the kind of sanctions we need without some cooperation from
    countries, like Russia and China, that are -- I think Senator McCain
    would agree -- not democracies but have extensive trade with Iran but
    potentially have an interest in making sure Iran doesn't have a
    nuclear weapon.
    But we're also going to have to, I believe, engage in tough,
    direct diplomacy with Iran, and this is a major difference that I have
    with Senator McCain. This notion that by not talking to people we are
    punishing them has not worked. It has not worked in Iran. It has not
    worked in North Korea. In each instance, our efforts at isolation
    have actually accelerated their efforts to get nuclear weapons. That
    will change when I'm president of the United States.

  • MR. LEHRER

    At 01:07:30
    2 seconds

    Senator, what about talking?

  • SEN. MCCAIN

    At 01:07:32
    19 seconds

    Well, Senator Obama twice said in debates that he
    would sit down with Ahmadinejad, Chavez and Raul Castro without
    precondition, without precondition.
    Now, here is -- (struggles with pronunciation) -- Ahmadinejad --

  • SEN. OBAMA

    At 01:07:51
    1 second

    That's tough.

  • SEN. MCCAIN

    At 01:07:52
    1 minute

    -- who is -- Ahmadinejad, who is now in New York
    talking about the extermination of the State of Israel, of wiping
    Israel off the map, and we're going to sit down without precondition
    across the table to legitimize and give a propaganda platform to a
    person that is espousing the extermination of the State of Israel and
    therefore -- then giving them more credence in the world arena -- and
    therefore saying they've probably been doing the right thing because
    you will sit down across the table from them and that will legitimize
    their illegal behavior.
    The point is that throughout history, whether it be Ronald
    Reagan, who wouldn't sit down with Brezhnev, Andropov or Chernenko
    until Gorbachev was ready with glasnost and perestroika or whether it
    be Nixon's trip to China, which was preceded by Henry Kissinger many
    times before he went -- look, I'll sit down with anybody, but there's
    got to be preconditions, and those preconditions would apply that we
    wouldn't legitimize with a face-to-face meeting a person like
    Ahmadinejad.
    Now, Senator Obama said without precondition.

  • MR. LEHRER

    At 01:09:12
    1 second

    Senator?

  • SEN. OBAMA

    At 01:09:13
    6 seconds

    Right, the -- so let -- let's talk about this.
    First of all, Ahmadinejad's not the most powerful person in Iran

  • SEN. MCCAIN

    At 01:09:19
    1 second

    (Chuckles.)

  • SEN. OBAMA

    At 01:09:20
    2 minutes

    -- so he -- he may not be the right person to talk
    to. But I reserve the right as president of the United States to --
    to meet with anybody at a time and place of my choosing if I think
    it's going to keep America safe.
    And I -- I'm glad that Senator McCain brought up the history --
    the bipartisan history -- of us engaging in direct diplomacy. Senator
    McCain mentioned Henry Kissinger, who's one of his advisers, who along
    with five recent secretaries of State just said that we should meet
    with Iran -- guess what? -- without precondition. This is one of your
    own advisers.
    Now, understand what this means, "without preconditions." It
    doesn't mean that you invite them over for tea one day. What it means
    is that we don't do what we've been doing, which is to say until you
    agree to do exactly what we say, we won't have direct contacts with
    you. There's a difference between preconditions and preparation. Of
    course we've got to do preparation, starting with low-level diplomatic
    talks, and it may not work because Iran is a rogue regime.
    But I will point out that I was called naive when I suggested
    that we need to look at exploring contacts with Iran, and you know
    what, President Bush recently sent a senior ambassador, Bill Burns, to
    participate in talks, with the Europeans, around the issue of nuclear
    weapons. Again, it may not work, but if it doesn't work then we have
    strengthened our ability to form alliances to impose the tough
    sanctions that Senator McCain just mentioned.
    (View cut data) And when we haven't done it, as in North Korea, let me just take one
    more example.
    In North Korea, we cut off talks. They're a member of the axis
    of evil. We can't deal with them. And you know what happened? They
    went -- they quadrupled their nuclear capacity. They tested a nuke.
    They tested missiles. They pulled out of the non-proliferation
    agreement. And they sent nuclear secrets potentially to countries
    like Syria.
    When we reengaged, because again the Bush administration reversed
    course on this, then we have at least made some progress. Although
    right now because of the problems in North Korea, we are seeing it on
    shaky ground. And I just, so I just have to make this general point,
    that the Bush administration, some of Senator McCain's own advisers
    all think this is important. And Senator McCain appears resistant.
    He even said the other day that he would not meet potentially
    with the prime minister of Spain because he, you know, he wasn't sure
    whether they were aligned with us. I mean, Spain. Spain is a NATO
    ally. If we can't meet with our friends, I don't know how we're going
    to lead the world in terms of dealing with critical issues like
    terrorism.

  • SEN. MCCAIN

    At 01:12:13
    19 seconds

    I'm not going to set the White House visitors
    schedule before I'm president of the United States. I don't even have
    a seal yet. (Laughter.)
    Look, Dr. Kissinger did not say that he would approve of face-to-
    face meetings between the president of the United States and the --
    and Ahmadinejad. He did not say that.

  • SEN. OBAMA

    At 01:12:32
    1 second

    Of course not.

  • SEN. MCCAIN

    At 01:12:33
    36 seconds

    He said that there could be secretary-level and
    lower-level meetings. I've always encouraged them. The Iranians have
    met with Ambassador Crocker in Baghdad.
    What Senator Obama doesn't seem to understand: that if without
    precondition, you sit down across the table from someone who has
    called Israel a stinking corpse and wants to destroy that country and
    wipe it off the map, you legitimize those comments.
    (View cut data) This is dangerous. It isn't just naive, it's dangerous. And so we
    just have a -- a fundamental difference of opinion.

  • SEN. OBAMA

    At 01:13:09

    I --

  • SEN. MCCAIN

    At 01:13:09
    32 seconds

    As far as North Korea is concerned, our secretary
    of State, Madeleine Albright, went to North Korea. By the way, North
    Korea, most repressive and brutal regime probably on Earth. The
    average South Korean is three inches taller than the average North
    Korean. A huge gulag. We don't know what the status of the "Dear
    Leader's" health is today, but we know this, that the North Koreans
    have broken every agreement that they've entered into.
    And we ought to go back to a little bit of Ronald Reagan's
    "trust, but verify" --

  • SEN. OBAMA

    At 01:13:41
    1 second

    Well --

  • SEN. MCCAIN

    At 01:13:42
    1 second

    -- and certainly not sit down --

  • MR. LEHRER

    At 01:13:43

    Quick.

  • SEN. MCCAIN

    At 01:13:43
    7 seconds

    -- across the table from -- without precondition,
    as Senator Obama said -- he did twice -- I mean it's just dangerous.

  • MR. LEHRER

    At 01:13:50

    Quick.

  • SEN. OBAMA

    At 01:13:50
    53 seconds

    Look, I mean, Senator -- Senator McCain keeps on
    using this example that suddenly the president would just meet with
    somebody without doing any preparation, without having low-level
    talks. Nobody's been talking about that, and Senator McCain knows it.
    This is a mischaracterization of my position.
    When we talk about preconditions -- and Henry Kissinger did say
    we should have contacts without preconditions -- the idea is that we
    do not expect to solve every problem before we initiate talks. And
    you know, the Bush administration has come to recognize that it hasn't
    worked, this notion that we are simply silent when it comes to our
    enemies. And the notion that we would sit with Ahmadinejad and not
    say anything while he's spewing his nonsense and -- and his vile
    comments is ridiculous. Nobody -- nobody's even talking about that.
    So --

  • SEN. MCCAIN

    At 01:14:43
    7 seconds

    So -- so let me get this right. We sit down with
    Ahmadinejad and he says "we're going to wipe Israel off the face of
    the Earth," and we say, "No, you're not"?

  • SEN. OBAMA

    At 01:14:50

    Yeah --

  • SEN. MCCAIN

    At 01:14:50
    1 second

    Oh, please.

  • SEN. OBAMA

    At 01:14:51

    No, no, let me tell you something --

  • SEN. MCCAIN

    At 01:14:51
    5 seconds

    By the way, my friend Dr. Kissinger, who's been my
    friend for 35 years --

  • SEN. OBAMA

    At 01:14:56

    Right.

  • SEN. MCCAIN

    At 01:14:56
    4 seconds

    -- would be interested to hear this conversation --

  • SEN. OBAMA

    At 01:15:00

    Oh, I will be --

  • SEN. MCCAIN

    At 01:15:00
    4 seconds

    -- and Senator Obama's depiction of his -- of his
    positions on the issue.

  • SEN. OBAMA

    At 01:15:04

    We will take a look --

  • SEN. MCCAIN

    At 01:15:04
    7 seconds

    I've known him for 35 years, and I guarantee you he
    would not -- he would not say that presidential, top-level --

  • SEN. OBAMA

    At 01:15:11

    Nobody's talking about that.

  • SEN. MCCAIN

    At 01:15:11
    5 seconds

    -- of course he encourages and other people
    encourage contacts and negotiations and all other things.

  • SEN. OBAMA

    At 01:15:16
    1 second

    Well --

  • SEN. MCCAIN

    At 01:15:17
    3 seconds

    We do that all the time.

  • MR. LEHRER

    At 01:15:20
    1 second

    We're going to go to a new lead --

  • SEN. MCCAIN

    At 01:15:21
    8 seconds

    And Senator Obama is parsing words when he says
    "precondition" means "preparation."

  • SEN. OBAMA

    At 01:15:29

    Hold on. I am not parsing words.

  • SEN. MCCAIN

    At 01:15:29
    1 second

    He's -- he's parsing words, my friends.

  • SEN. OBAMA

    At 01:15:30
    2 seconds

    I am using the same words that your advisers use.
    Please go ahead.

  • MR. LEHRER

    At 01:15:32

    New lead question --

  • SEN. MCCAIN

    At 01:15:32
    3 seconds

    (Chuckles.)

  • MR. LEHRER

    At 01:15:35
    12 seconds

    -- Russia, goes to you, two minutes, Senator Obama.
    How do you see the relationship with Russia? Do you see them as a
    competitor? Do you see them as an enemy? Do you see them as a
    potential partner?

  • SEN. OBAMA

    At 01:15:47
    2 minutes

    Well, I think that given what's happened over the
    last several weeks and months, our entire Russian approach has to be
    evaluated, because a resurgent and very aggressive Russia is a threat
    to the peace and stability of the region. Their actions in Georgia
    were unacceptable. They were unwarranted. And at this point it is
    absolutely critical for the next president to make clear that we have
    to follow through on our six-party -- or the six-point cease-fire.
    They have to remove themselves from South Ossetia and Abkhazia. It is
    absolutely important that we have a unified alliance and that we
    explain to the Russians that you cannot be a 21st century superpower
    or power and act like a 20th century dictatorship.
    And we also have to affirm all the fledgling democracies in that
    region -- you know, the Estonians, the Lithuanians, the Latvians, the
    Poles, the Czechs -- that we are in fact going to be supportive and in
    solidarity with them in their efforts. They are members of NATO.
    (View cut data) And to countries like Georgia and the Ukraine, I think, we have to
    insist that they are free to join NATO if they meet the requirements.
    And they should have a membership action plan immediately to start
    bringing them in.
    Now, we also can't return to a Cold War posture with respect to
    Russia. It's important that we recognize there are going to be some
    areas of common interest.
    One is nuclear proliferation. They have not only 15,000 nuclear
    warhead but they've got enough to make another 40,000. And some of
    those loose nukes could fall into the hands of al Qaeda.
    This is an area where I've led on in the Senate, working with a
    Republican, ranking member of the Senate Foreign Relations Committee,
    Dick Lugar, to deal with the proliferation of loose nuclear weapons.
    That's an area where we're going to have to work with Russia.
    But we have to have a president who is clear that you don't deal with
    Russia based on staring into his eyes and seeing his soul.
    You deal with Russia based on, what are your, what are the
    national security interests of the United States of America? And we
    have to recognize that the way they've been behaving lately demands a
    sharp response from the international community and our allies.

  • MR. LEHRER

    At 01:18:04
    2 seconds

    Two minutes on Russia, Senator McCain.

  • SEN. MCCAIN

    At 01:18:06
    3 minutes

    Well, I was interested in Senator Obama's reaction
    to the Russian aggression against Georgia. His first statement was,
    both sides ought to show restraint -- again a little bit of naivete
    there.
    He doesn't understand that Russia committed serious aggression
    against Georgia And Russia has now become a nation fueled by petrol
    dollars that is basically a KGB-apparatchik-run government.
    I looked into Mr. Putin's eyes and I saw three letters: a K, a G
    and a B. And their aggression in Georgia is not acceptable behavior.
    I don't believe we're going to go back to the Cold War.
    (View cut data) I am sure that that will not happen. But I do believe that we need to
    bolster our friends and allies.
    And that wasn't just about a problem between Georgia and Russia.
    It had everything to do with energy. There's a pipeline that runs
    from the Caspian through Georgia through Turkey, and of course we know
    that the Russians control other sources of energy into Europe, which
    they have used from time to time. It's not accidental that the
    presidents of Latvia, Estonia, Lithuania, Poland and Ukraine flew to
    Georgia, flew to Tbilisi -- where I have spent significant amount of
    time with a great young president, Misha Saakashvili -- and they
    showed solidarity with him, but also they are very concerned about the
    Russian threats to regain their status of the old Russian empire.
    Now, I think the Russians ought to understand that we will
    support -- we, the United States -- will support the inclusion of
    Georgia and Ukraine in -- in the -- the natural process, inclusion
    into NATO. We also ought to make it very clear that the Russians are
    in violation of their cease-fire agreement, they have stationed
    additional troops in Abkhazia and South Ossetia.
    By the way, I went there once, and we went inside and drove in,
    and there was a huge poster. And this is -- this is Georgian
    territory, and there was a huge picture of Vladimir Putin, and it
    said, "Vladimir Putin: our president." It was very clear, the
    Russian intentions towards Georgia. They were just waiting to seize
    the opportunity.
    So this is a very difficult situation. We want to work with the
    Russians, but we also have every right to expect the Russians to
    behave in a fashion in keeping with a -- with a -- with a country who
    respects international boundaries and the norms of international
    behavior. And watch Ukraine. This whole thing has got a lot to do
    with Ukraine, Crimea, the base of the Russian fleet in Sevastopol and
    the breakdown of the political process in Ukraine between Tymoshenko
    and Yushchenko -- is a very serious problem.
    (View cut data) So watch Ukraine and let's make sure that we -- that the Ukrainians
    understand that we are their friend and ally.

  • MR. LEHRER

    At 01:21:13
    3 seconds

    Senator, do you have a major difference with what he
    just said?

  • SEN. OBAMA

    At 01:21:16
    2 minutes

    No, actually, I think Senator McCain and I agree for
    the most part on these issues.
    Obviously, I disagree with this notion that somehow we did not
    forcefully object to Russians going into Georgia. I immediately said
    that this was illegal and objectionable.
    And absolutely, I wanted a cessation of the violence, because it
    put an enormous strain on Georgia. And that's why I was the first to
    say that we have to rebuild the Georgian economy and called for a
    billion dollars that has now gone in to help them rebuild, because
    part of Russia's intentions here was to weaken the economy to the
    point where President Saakashvili was so weakened that he might be
    replaced by somebody that Putin favored more.
    Two points I think are important to -- to think about when it
    comes to Russia: Number one is we have to have foresight and
    anticipate some of these problems. So back in April, I warned the
    administration that you had Russian peacekeepers in Georgian
    territory. That made no sense whatsoever. And what we needed to do
    was replace them with international peacekeepers and a special envoy
    to resolve the crisis before it boiled over. That wasn't done, but
    had it been done, it's possible we could have avoided the -- the
    issue.
    The second point I want to make is -- is the issue of energy.
    Russia is, in part, resurgent and Putin is feeling powerful because of
    petro-dollars, as Senator McCain mentioned. That means that we, as
    one of the biggest consumers of oil -- 25 percent of the world's oil
    -- have to have an energy strategy not just to deal with Russia but to
    deal with many of the rogue states we've talked about -- Iran,
    Venezuela -- and that means, yes, increasing domestic production and
    offshore drilling.
    (View cut data) But we only have 3 percent of the world's oil supplies and we use 25
    percents of the world's oil, so we can't simply drill our way out of
    the problem. What we're going to have to do is to approach it through
    alternative energy like solar and wind and biodiesel and, yes, nuclear
    energy, clean coal technology. And you know, I've got a plan for us
    to make a significant investment over the next 10 years to do that.
    And -- and I have to say, Senator McCain and I, I -- I think,
    agree on the importance of energy, but Senator McCain mentioned
    earlier the importance of looking at a record. Over 26 years, Senator
    McCain voted 23 times against alternative energy like solar and wind
    and biodiesel. And so we -- we -- we -- we got to -- we got to walk
    the walk and not just talk the talk when it comes to energy
    independence because this is probably going to be just as vital for
    our economy and the -- the pain the people are feeling at the pump --
    and you know, winter's coming and home heating oil -- as it is our
    national security and the issue of climate change that's so important.

  • MR. LEHRER

    At 01:24:11

    We've got time for one more lead question segment.
    We're way out of -- we're out of --

  • SEN. MCCAIN

    At 01:24:11

    Could I -- could I quickly respond.

  • MR. LEHRER

    At 01:24:11
    9 seconds

    You could be -- quick response and then we'll go to
    the next.

  • SEN. MCCAIN

    At 01:24:20
    6 seconds

    No one from Arizona -- (chuckles) -- is against
    solar. And Senator Obama says he's for nuclear, but he's against
    reprocessing and he's against storing, so --

  • SEN. OBAMA

    At 01:24:26
    1 second

    That's -- that's just not true, John.

  • SEN. MCCAIN

    At 01:24:27
    1 second

    -- so it's hard to get there from there.

  • SEN. OBAMA

    At 01:24:28
    1 second

    John, I'm sorry, that -- that's not true.

  • SEN. MCCAIN

    At 01:24:29
    18 seconds

    And offshore drilling is also something that is
    very important, and it is a bridge. And we know that if we drill
    offshore and exploit a lot of these reserves, it will help, at least
    temporarily, relieve our energy requirements, and it will have I think
    an important effect on the price of a barrel of oil.

  • SEN. OBAMA

    At 01:24:47
    6 seconds

    I -- I just have to respond very quickly just to
    correct the -- just to correct the record.

  • SEN. MCCAIN

    At 01:24:53

    So I want to say that with the Nunn-Lugar thing --

  • MR. LEHRER

    At 01:24:53
    4 seconds

    Excuse me, sir.
    SEN. OBAMA.
    (Inaudible.)

  • SEN. MCCAIN

    At 01:24:57
    15 seconds

    -- I supported Nunn-Lugar back in the early 1990s
    when a lot of my colleagues didn't. That was the key legislation at
    the time, and put us on the road to eliminating this issue of nuclear
    waste and the -- the nuclear fuel that has to be taken care of.

  • SEN. OBAMA

    At 01:25:12

    I -- I just have to correct the record here. I have
    never said that I object to nuclear waste. What I've said is that we
    have to store if safely.
    MR. LEHRER.
    (Inaudible.)
    SEN. OBAMA.
    And Senator McCain, he says -- he talks about
    Arizona, I've got to make this point, Jim.
    MR. LEHRER.
    Okay.

  • SEN. OBAMA

    At 01:25:12
    10 seconds

    He objects -- he objects to --

  • SEN. MCCAIN

    At 01:25:22
    1 second

    I have voted for alternate fuel all of my time --
    (Cross talk.)

  • MR. LEHRER

    At 01:25:23
    1 second

    One at a time, please.

  • SEN. MCCAIN

    At 01:25:24
    1 second

    -- and no one can be opposed to alternate fuels --

  • SEN. OBAMA

    At 01:25:25
    5 seconds

    All right. Fair enough. Let's move on. You got
    one more --
    (Cross talk.)

  • MR. LEHRER

    At 01:25:30
    14 seconds

    This is last lead question, you have two minutes
    each. The question is this, beginning with you, Senator McCain. What
    do you think the likelihood is that there would be another 9/11-type
    attack on the Continental United States?

  • SEN. MCCAIN

    At 01:25:44
    2 minutes

    I think it's much less than it was the day after
    9/11. I think it -- that we have a safer nation, but we are a long
    way from safe. And I want to tell you that one of the things I'm most
    proud of, among others -- because I have worked across the aisle. I
    have a long record on that -- on a long series of reforms. But after
    9/11, Senator Joe Lieberman and I decided that we needed a commission,
    and that was a commission to investigate 9/11 and find out what
    happened and fix it.
    And we were -- we were opposed by the administration -- another
    area where I differed with this administration. And we were stymied
    until the families of 9/11 came and they descended on Washington and
    we got that legislation passed. And there were a series of
    recommendations, as I recall, more than 40. And I'm happy to say that
    we've gotten written into law most of those reforms recommended by
    that commission. I'm proud of that work, again, bipartisan, reaching
    across the aisle, working together, Democrat and Republican alike.
    So we have a long way to go in our intelligence services. We
    have to do a better job in human intelligence, and we've got to make
    sure that we have people who are trained interrogators so that we
    don't ever torture a prisoner ever again.
    We have to make sure that our technological and intelligence
    capabilities are better.
    (View cut data) We have to work more closely with our allies.
    I know our allies and I can work much more closely with them.
    But I can tell you that, I think, America is safer today than it was
    in 9/11. But that doesn't mean that we don't have a long way to go.
    And I'd like to remind you also, as a result of those
    recommendations, we probably had the largest reorganization of
    government since we established the Defense Department. And I think
    that those men and women in those agencies are doing a great job. But
    we still have a long way to go before we can declare America safe.
    And that means doing a better job along our borders as well.

  • MR. LEHRER

    At 01:27:52
    2 seconds

    Two minutes, Senator Obama.

  • SEN. OBAMA

    At 01:27:54
    2 minutes

    Well, first of all, I think that we are safer in
    some ways. Obviously we've poured billions of dollars into airport
    security. We have done some work in terms of securing potential
    targets. But we still have a long way to go.
    We've got to make sure that we're hardening our chemical sites.
    We haven't done enough in terms of transit. We haven't done enough in
    terms of ports. And the biggest threat that we face right now is not
    a nuclear missile coming over the skies; it's in a suitcase.
    This is why the issue of nuclear proliferation is so important.
    It is the -- the biggest threat to the United States is a terrorist
    getting a hands on nuclear weapons. And we, we are spending billions
    of dollars on missile defense.
    And I actually believe that we need missile defense because of
    Iran and North Korea and the potential for them to obtain or to launch
    nuclear weapons. But I also believe that when we are only spending a
    few hundred million dollars on nuclear proliferation, then we're
    making a mistake.
    The other thing that we have to focus on though is al Qaeda.
    They are now operating in 60 countries.
    (View cut data) We can't simply be focused on Iraq. We have to go to the root cause,
    and that is in Afghanistan and Pakistan. That's going to be critical.
    We are going to need more cooperation with our allies.
    And one last point I want to make. It is important for us to
    understand that the way we are perceived in the world is going to make
    a difference in terms of our capacity to get cooperation and root out
    terrorism. And one of the things that I intend to do as president is
    to restore America's standing in the world. We are less respected now
    than we were eight years ago or even four years ago.
    And this is the greatest country on Earth. But because of some
    of the mistakes that have been made -- and I give Senator McCain great
    credit on the torture issue, for having identified that as something
    that undermines our long-term security -- because of those things, we,
    I think, are going to have a lot of work to do in the next
    administration to restore that sense that America's that shining
    beacon on a hill.

  • MR. LEHRER

    At 01:30:02
    6 seconds

    Do you agree there's much to be done in a new
    administration to restore -- well, I won't repeat what he --

  • SEN. MCCAIN

    At 01:30:08
    1 minute

    But I -- but in the case of missile defense,
    Senator Obama said it had to be, quote, "proven." That wasn't proven
    when Ronald Reagan said we would do SDI, which is missile defense, and
    it was major -- a major factor in bringing about the end of the Cold
    War.
    We seem to come full circle again. Senator Obama still doesn't
    quite understand or doesn't get it that if we fail in Iraq, it
    encourages al Qaeda. They would establish a base in Iraq. The -- the
    consequences of defeat, which would result from his plan of withdrawal
    and according to date certain, regardless of conditions, according to
    our military leaders, according to every expert, would lead to
    possible defeat, loss of all the fragile sacrifice that we've made of
    American blood and treasure, which grieves us all. All of that would
    be lost if we followed Senator Obama's plan to have specific dates
    with withdrawal regardless of conditions on the ground.
    MR. LEHRER.
    Do --
    SEN. MCCAIN.
    And General Petraeus says we have had great
    success, but it's very fragile. And we can't do what Senator Obama
    wants to do.
    That is a central issue of our time, and I think Americans will
    judge very seriously as to whether that's the right path or the wrong
    path and who should be the next president of the United States.

  • MR. LEHRER

    At 01:31:27
    3 seconds

    You see the same connections that Senator McCain
    does?

  • SEN. OBAMA

    At 01:31:30
    2 minutes

    Oh, there's no doubt. Look, over the last eight
    years, this administration, along with Senator McCain, have been
    solely focused on Iraq. That has been their priority. That has been
    where all our resources have gone.
    In the meantime, bin Laden is still out there. He is not
    captured. He is not killed. Al Qaeda is resurgent.
    In the meantime, we've got challenges, for example, with China,
    where we are borrowing billions of dollars -- they now hold a trillion
    dollars' worth of our debt. And they are active in countries like --
    in regions like Latin America and Asia and Africa. They are -- the
    conspicuousness of their presence is only matched by our absence,
    because we've been focused on Iraq.
    We have weakened our capacity to project power around the world
    because we have viewed everything through this single lens. Not to
    mention -- look at our economy. We are now spending 10 or -- billion
    dollars or more every month. And that means we can't provide health
    care to people who need it. We can't invest in science and
    technology, which will determine whether or not we are going to be
    competitive in the long term.
    There has never been a country on earth that saw its economy
    decline and yet maintained its military superiority. So this is a
    national security issue.
    We haven't adequately funded veterans' care. I sit on the
    Veterans Affairs Committee and we've got -- I meet veterans all across
    the country who are trying to figure out, how can I get disability
    payments?
    (View cut data) I've got post-traumatic stress disorder and yet I can't get treatment.
    So we have put all chips in right there, and nobody is talking
    about losing this war. What we are talking about is recognizing that
    the next president has to have a broader strategic vision about all
    the challenges that we face that's been missing over the last eight
    years. That sense is something that I want to restore.

  • SEN. MCCAIN

    At 01:33:33
    1 minute

    I've been involved, as I mentioned to you before,
    in virtually every major national security challenge we've faced in
    the last 20-some years. There are some advantages to experience and
    knowledge and judgment, and I -- and I honestly don't believe that
    Senator Obama has the knowledge or experience, and has made the wrong
    judgments in a number of areas, including his initial reaction to
    Russian aggression in Georgia, to his -- you know, we've seen this
    stubbornness before, in this administration, to cling --
    SEN. OBAMA.
    (Chuckles.)
    SEN. MCCAIN.
    -- to a belief that somehow the -- the surge has
    not succeeded, and failing to acknowledge that he was wrong about the
    surge, is -- shows to me that we -- that -- that we need more
    flexibility in a president of the United States than that.
    As far as other issues that he brought up are concerned, I know
    the veterans. I know them well. And I know that they know that I'll
    take care of them, and I've been proud of their support and their --
    and their recognition of my service to the veterans. And I love them,
    and I'll take care of them, and they know that I'll take care of them.
    And that's going to be my job.
    But also, I have the ability and the knowledge and the background
    to make the right judgments to keep this country safe and secure.
    Reform, prosperity and peace: these are major challenges to the
    United States of America. I don't think I need any on-the-job
    training. I'm ready to go at it right now.

  • SEN. OBAMA

    At 01:35:07
    1 minute

    Well, let me just make a closing point.
    My father came from Kenya. That's where I get my name. And in
    the '60s, he wrote letter after letter to come to college here in the
    United States, because the notion was that there was no other country
    on earth where you could make it if you tried. The ideals and the
    values of the United States inspired the entire world. I don't think
    any of us can say that our standing in the world now, the way children
    around the world look at the United States, is the same.
    And part of what we need to do, what the next president has to
    do, and this is part of our judgment -- this is part of how we are
    going to keep America safe -- is to, to send a message to the world
    that we are going to invest in issues like education; we are going to
    invest in issues that relate to how ordinary people are able to live
    out their dreams. And that is something that I'm going to be
    committed to as president of the United States.

  • MR. LEHRER

    At 01:36:15
    2 seconds

    Few seconds. We're almost finished.

  • SEN. MCCAIN

    At 01:36:17
    27 seconds

    Jim, when I came home from prison, I saw our
    veterans being very badly treated. And it made me sad. And I
    embarked on an effort to resolve the POW/MIA issue, which we did in a
    bipartisan fashion. And then I worked on normalization of relations
    between our two countries, so that our veterans could come all the way
    home.
    I guarantee you, as president of the United States, I know how to
    heal the wounds of war. I know how to deal with our adversaries. And
    I know how to deal with our friends.

  • MR. LEHRER

    At 01:36:44
    58 seconds

    And that ends this debate tonight.
    On October 2nd, next Thursday, also at 9 p.m. Eastern Time, the
    two vice presidential candidates will debate at Washington University
    in St. Louis. My PBS colleague Gwen Ifill will be the moderator.
    For now, from Oxford, Mississippi, thank you, Senators both. I'm
    Jim Lehrer. Thank you and goodnight. (Applause.)
    END