TRANSCRIPT: Sen John McCain

I know you don't want to use language like that, but is his basic take right? Is Wall Street the villain here? And what would you do about it?

MCCAIN: I think that Wall Street is the villain in the things that happened in the subprime lending crisis and other areas where investigations and possible prosecution is going on.

But I also think that Congress is at fault. We didn't restrain spending. Spending got completely out of control. We were ...

STEPHANOPOULOS: But what does that have to do with the mortgage crisis...

MCCAIN: It increases...

STEPHANOPOULOS: ... or with the housing crisis?

MCCAIN: It increases the deficit. We didn't address the energy crisis, which has been building for 30 years. We're now sending $700 billion of Americans' money overseas to countries that don't like us very much.

So, I think there's a lot of blame to go around here. But I also would blame a gridlocked Congress, which is gridlocked as we speak, when we should be doing offshore drilling.

STEPHANOPOULOS: The gridlock...

MCCAIN: We should be moving forward with nuclear power.

STEPHANOPOULOS: The gridlock broke today on the housing bill. It passed, I think, 72 to 13 in the Senate.

I know you couldn't be there. Would you have voted for that bill?

MCCAIN: Yes. But I also see, again, the influence of special interests. They place the responsibilities for trying to help solve some of these problems of people remaining in their homes -- and it is real and significant -- in the hands of the lenders.

I would have liked to have seen the homeowner, the primary residents, go down and get the 30-year FHA guaranteed loan at the new value of their home, and put it in the hands of the borrower, the homeowner. But I'll support...

STEPHANOPOULOS: Then why vote for the bill?

MCCAIN: Because it's better than nothing. It's better than -- it may give relief to several hundred thousand homeowners. Or if it gives relief to one, it's a -- but I think it can provide some relief.

STEPHANOPOULOS: Several of your colleagues look at this bill and say it could put the taxpayers on the hook for up to $25 billion for Fannie Mae.

They look at the government stepping in to help Bear Stearns and they say, this is socialized capitalism. You know, what we have is that the private companies get to make all the profits. When they get in trouble, the government steps in.

Is that right?

MCCAIN: No, it's not right. But we reached such a situation that, if these institutions failed, the impact on millions of innocent Americans could be very severe.

In the case of Fannie and Freddie, we should stop their lobbying activities. We should eliminate the pay and bonuses that these people rake in...

STEPHANOPOULOS: George Will has an idea on that.

MCCAIN: ... the most...

STEPHANOPOULOS: He says that when some places like Freddie Mae (ph) or Fannie Mae or Bear Stearns get the government guarantee, that the executives that work there should get a government salary.

MCCAIN: Sure. That's exactly right. And we could go out and ask people -- the smartest people in America, maybe somebody like Jack Welch or John Chambers or Meg Whitman, people like that -- and say, come and take over and do it for $1 a year. They'd be willing to do that.

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