CNBC Press Releases

AP John McCain

AP Sarah Palin

WHEN: Today, Tuesday, October 28th at 9:35AM ET

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Republican presidential candidate Sen. John McCain and vice presidential candidate Gov. Sarah Palin today on CNBC's "Squawk on the Street."

All references must be sourced to CNBC.

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MARIA BARTIROMO, host:

Hi, there, Mark, thanks very much. And I am sitting here in their first live

interview together, Senator John McCain and Governor Sarah Palin.

Good to have you both with us. Thanks for joining us.

Governor SARAH PALIN: Thank you.

Senator JOHN McCAIN: Thank you.

BARTIROMO: We are in a financial crisis, clearly. We are expecting further

layoffs and further banks to go belly-up. Why should the American people

believe and feel that the two of you have your hands on the wheel and can take

us out of this?

Sen. McCAIN: Well, because we have a plan of action to get America's economy

going again, Maria, and it has to do with a wide range of prescriptions. But

one of them is to keep people in their homes. Look, it was the housing crisis

that started this, OK? Fannie and Freddie, this--was the catalyst that blew

this whole thing up. And frankly, the administration is not doing what I

think they should do, and that's go in and buy out these bad mortgages, give

people mortgages they can afford, stabilize home values and start them back up

again. They did that during the depression, it was called the Home Owners'

Loan Corporation. We got to keep taxes low, we got to cut spending, we got to

find alternative fuels, including offshore drilling and nuclear power. And we

have to have a positive agenda for job creation. But I'd like to start with

keeping people in their homes.

BARTIROMO: So, over the short term your plan is to keep people in their homes

and buy those mortgages.

Sen. McCAIN: Create...

BARTIROMO: Over the longer term?

Sen. McCAIN: Over the longer term, as happened in the, by the way, during

the Great Depression, was that over time money came into the Treasury.

Obviously we have to stabilize our financial institutions, we have to unfreeze

credit. How do you do all that? You create jobs in America. And we can do

that in a broad variety of ways, and one of them is to stop this $700 billion

transfer to countries that don't like us very much. Now, I know the price of

oil is down temporarily, and that's reflective of a lot of conditions in the

world. But we still have to free ourselves of our dependence on foreign oil,

because over time it's still a finite resource.

BARTIROMO: Governor Palin, what about that? Now oil's around $60 a share--a

barrel. Is it still an important issue to become energy independent? And how

do you do it?

Gov. PALIN: Now is our opportunity to seize this and to be able to invest in

the domestic solutions that are here now for that offshore drilling that is

safe and responsible, for the nuclear that we need to tap into and the

alternative sources. And yeah, drilling for the sources that we know are here

and flowing that natural gas in the pipelines that we're building up there in

Alaska, also. Now is the opportunity that we have, and we better seize it.

We cannot lull ourselves into this false sense of security just because the

price of a barrel of oil today is 64 bucks, it's about half of what it had

been I think even when we were speaking last, Maria. But no, now's our

opportunity. The domestic solutions that are there, we tap into them, we

become less and less beholden then on foreign sources of energy, and we

circulate, as he says, these hundreds of billions of dollars a year in our own

country, creating jobs for America.

BARTIROMO: Senator, there are a lot of...

Sen. McCAIN: (Unintelligible)...look who we're dependent on. Look at the

part of the world we're dependent on. Look at Hugo Chavez. Look at the--it's

a matter of national security. And by the way, nuclear power, which I'm a big

proponent of, as you know, reduce greenhouse--reduces greenhouse gas emissions

dramatically. So it's environmental, it's national security and it's an

economic issue. It's not the only answer, but building 45 nuclear power

plants creates 700,000 jobs in America.

BARTIROMO: Speaking of national security, Joe Biden said that if Obama is

elected he will be tested in the first six months. In your view, who is most

likely to test him, and how would you and Obama handle it differently?

Sen. McCAIN: Well, I've been tested, to start with. Second of all, Senator

Obiden was right--Senator Biden was correct. Senator Biden--if Sarah or I had

said that, can you imagine the reaction? Scaring Americans, etc. But Senator

Biden had it right. This is an untested individual who has been wrong on the

things he's been tested about. He still refuses to acknowledge that he was

wrong about the surge. When Russia committed aggression against Georgia, he

asked Georgia to exercise restraint. The list goes--said he would sit down

with the Castro brothers, Chavez and Ahmadinejad without any preconditions,

thereby legitimizing their radical, aggressive anti-American, anti-peace

positions. So I agree with Joe Biden. I couldn't have said it myself first,

but he's right. This is an inexperienced person who so far has exercised bad

judgment about national security.

Gov. PALIN: And it wasn't just Joe Biden, though. That was confirmed by

Madeleine Albright, too, saying of course, he was stating fact that there

would be that testing of someone who was inexperienced, not ready to lead; as

Joe Biden had been telling us all along in the primaries, that Barack Obama is

not ready to be commander in chief.

BARTIROMO: Do you--do you worry about the attacks?

Sen. McCAIN: She said, `Mark my words.' She said...

BARTIROMO: I know I asked the question, but there's so much mud slinging

going on.

Sen. McCAIN: Good.

BARTIROMO: People really want answers and solutions here.

Sen. McCAIN: Yeah. Sure.

BARTIROMO: There are many issues I'd like to get to.

Sen. McCAIN: Sure.

BARTIROMO: In addition to taxes, unions. Why haven't you made the union

issue a campaign issue? That is, the right to have a secret ballot. Why

isn't this a major issue on your agenda?

Sen. McCAIN: You know, we've talked about it a lot and unfortunately,

there's three or four issues that you can get out strongly. But this

is--we've been talking about for a long time. This is a threat to the

fundamental of labor management relations. It's fundamental to democracy, the

right to have a secret ballot. The way that Senator Obama envisions and the

unions--and this is their big push, and they've gotten commitments from

Senator Obama and Senator Biden--union organizer goes to your house and says,

`Hey, Joe, can I sign you up for the union?' That is--we all know what that

opens the door to. It's dangerous for America, it's dangerous to small

business and I think it's a threat to one of the fundamentals of democracy.

BARTIROMO: Will you veto the bill?

Sen. McCAIN: In a New York minute, if I may say that. I will do everything

in my power to block such legislation. And imagine, Senator Obama, Nancy

Pelosi and Harry Reid pushing the union agenda. It'd be very, very, very

unfortunate.

BARTIROMO: Let me--let me go back to the tax issue. Over the long term, you

want to keep taxes low. We're spending $10 billion a month on the war in

Iraq. Why not allow--why not make the American people pay for it?

Sen. McCAIN: Because we study history. History shows that if you practice

protectionism and isolationism and at the same time you raise taxes, you send

an economy from a recession into a depression. That's history. The guy's

name was Herbert Hoover. And it was aided and abetted later on. This is the

worst time to raise anyone's taxes. And obviously Senator Obama has now,

thanks to "Joe the Plumber" and other research have authenticated, he wants to

redistribute the wealth. He wants to, quote, "spread the wealth around" by

taking money from one group of Americans and giving it to another. And as you

know, that number--level of income goes down and down and down and down. And

so...

BARTIROMO: Will you ask Treasury Secretary Hank Paulson to stay on at least

temporarily if you win?

Sen. McCAIN: I think it would depend on the situation at the time. I'm

disappointed that Secretary Paulson has not put first emphasis on buying these

home loan mortgage--these home mortgages and keeping people in their homes.

So I admire and respect him, but I certainly would have somebody who'd give

that our highest priority. As you know, that the chairperson of the FDIC has

also agreed with that. Get the home values under control and back up again.

BARTIROMO: We're going to continue our conversation, but I'm going to send it

back to the live program right now. I'd like to ask you how your partnership

is going, and how unified you are, actually. That will be on the CLOSING BELL

today. We'll also talk about the redistribution of wealth. In the meantime,

I'll send it back to you, Mark and Erin.

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