TRANSCRIPT: 'On the Trail' with Sen. John McCain

And it also has a confidence impact, a confidence impact that the American people see their tax dollars being frittered away in wasteful and unnecessary spending, which, by the way, Sen. Obama has engaged in heavily and Sen. Clinton has engaged in heavily. They bought in.

They're talking about change? I want change to be stop this waste of American tax dollars.

STEPHANOPOULOS: But is that really the answer to the housing crisis we're seeing right now, the credit crunch we're seeing?

MCCAIN: It is...

STEPHANOPOULOS: The anxiety Americans are feeling?

MCCAIN: Well, I think we've got to -- I'm glad we did the stimulus package. I think we need to have lower interest rates. I think we need to eliminate the AMT. I think we need to have depreciation in one year of business investment.

I think we need to reduce the corporate tax rate, which is the second highest in the world, only exceeded by Japan. I think there's a long series of steps we need to take, and many of them we haven't even contemplated yet, if necessary.

But having the impact of a tax increase is certainly not one of them. And that is what Sen. Obama and Sen. Clinton are saying.

STEPHANOPOULOS: They have also said, both Sen. Obama and Sen. Clinton have said we need a government fund to provide -- to help borrowers who are facing foreclosure on their homes. Good idea?

MCCAIN: I don't think so, yet. We have the FHA working. We have a number of institutions working with them.

But I will be glad to do whatever is necessary to relieve the burden of people who are legitimate borrowers who see their home loan interest payments so high -- mortgage payments so high that they can't afford it anymore.

But I don't want to reward people who engaged in speculation. And I certainly don't want to reward institutions that engaged in the practice of lending people that couldn't afford to pay back the loans.

STEPHANOPOULOS: But you're open to helping homeowners?

MCCAIN: I am open to helping homeowners. I would rely to a large degree on the situation (inaudible) but also people like Secretary of Treasury Paulson, who the financial markets and a lot of us have a great deal of faith in. If more needs to be done, I'm for doing more.

STEPHANOPOULOS: You mentioned earlier that we needed lower interest rates. Do you believe that Ben Bernanke has been too slow off the mark?

MCCAIN: It's hard for me to make the judgment. Usually these judgments are made in the rear-view mirror, as we know.

But I personally would have liked to have seen those rate cuts earlier. A lot of the people that I respect that are advising me, like Phil Gramm and Jack Kemp and so many others that are in our team, on our team, said that they would have liked to have seen it earlier.

So I guess I would have to say I would have liked to have seen faster rate cuts and earlier than they were done by him. That doesn't mean I want him fired; it doesn't mean that I've lost confidence in...

STEPHANOPOULOS: Re-appoint him if you're elected?

MCCAIN: Oh, I think that those terms of office are...

STEPHANOPOULOS: In 2010.

MCCAIN: In 2010, I would have to consider that at the time, obviously.

STEPHANOPOULOS: How about on the issue of climate change? Because you and Sen. [Joe] Lieberman [I-Conn.] have come out for a bill which would have mandatory reductions in greenhouse gases.

MCCAIN: Gradual reductions, yes.

STEPHANOPOULOS: But they are mandatory.

MCCAIN: Yes.

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