Transcript: Charlie Gibson Interviews McCain

Oct. 9, 2008 — -- The following is an excerpted transcript of ABC News' Charles Gibson's interview Thursday with John McCain about the second presidential debate, the economy and other issues important to voters, for "World News With Charles Gibson" in Wisconsin.

GIBSON: Senator, we're in a global market meltdown, and the very firmament of our economy and what it's based on has had seismic shocks in recent days. And yet night before last, you guys were having a debate about spending and taxes and earmarks that you could have had three months ago. And that's frustrating to people.

MCCAIN: Well, I think that in my opening comments I made a very strong case that we are in a crisis of unprecedented proportions. And that's why I recommended strongly that we go out and have the Treasury buy up these bad mortgages, so, and arrange it as they did during the Depression.

That's exactly -- in fact, Sen. [Hillary] Clinton has recommended this. Buy up these mortgages. Let people have them in affordable payment levels. And put a floor on this continuing plummeting of housing -- of home prices. As long as that value continues down, I don't see a stabilization.

But then in answer to your question, you sort of go to, in all due respect, to where the questioner leads you. One thing that frustrates audiences a lot of times and viewers is you get asked a question and you give, you know, your own set, planned answer. So I thought I emphasized as much as I possibly could in every answer that I appreciate the depth of the crisis that we're in.

GIBSON: Let me talk about that plan. $300 billion. New money or part of the $700 billion?

MCCAIN: Part of the $700 billion, new money, if necessary. Look, in one day they wiped out $1.2 trillion when it dropped 700 points. And I'm not throwing this money around lightly. But if the housing values continue to go down, there's no floor. There's no turnaround here. We all know what was the catalyst for this catastrophe. And that was Fannie and Freddie.

We did cover that a bit during the debate, which I warned about and wrote [a] letter about and proposed legislation along with others to try and rein in Fannie and Freddie. And because of the corruption and cronyism in Washington, no one acted. And it's fascinating to me that the same people that are taking credit for the bailout, the Democrats, Chris Dodd, Barney Frank and others, were defending Fannie and Freddie and the corrupt practices they were doing. I'll tell you. Life's funny.

GIBSON: You used the word bailout.

MCCAIN: I've used the word bailout.

GIBSON: But it really is a rescue plan.

MCCAIN: It's got to be a rescue plan, yes. In fact, we really -- one of the reasons why there was so much resistance to it -- you know, our mail and phone calls were running heavily against it because it was a, quote, "bailout" for Wall Street. Well, if we can assure people that it's going to keep people in their homes, then I hope that that changes the attitude some.

GIBSON: Some of the reaction to your plan of $300 billion to buy up mortgages. People say, look, I've paid my mortgage. I didn't overspend. I didn't take a house that I couldn't afford. I'm paying my mortgage. Why are you going to help them and do nothing for me?

MCCAIN: Because if your neighbor's home value continues to decline, so is yours. Your life savings -- and I appreciate that you were able to make your payments and struggles that you had. But if your neighbor's home continues to plummet in value and sits empty, then it's going to affect your home as well. So we're doing this for you as well. And hopefully we reach a floor on the home values, and yours and your neighbor's homes can increase in value.