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Question：Senator McCain, for you, we have our first question from the Internet tonight. A child of the Depression, 78-year-old Fiora (ph) from Chicago.
Since World War II, we have never been asked to sacrifice anything to help our country, except the blood of our heroic men and women. As president, what sacrifices -- sacrifices will you ask every American to make to help restore the American dream and to get out of the economic morass that we're now in?
MCCAIN: Well, Fiora (ph), I'm going to ask the American people to understand that there are some programs that we may have to eliminate.
I first proposed a long time ago that we would have to examine every agency and every bureaucracy of government. And we're going to have to eliminate those that aren't working.
I know a lot of them that aren't working. One of them is in defense spending, because I've taken on some of the defense contractors. I saved the taxpayers $6.8 billion in a deal for an Air Force tanker that was done in a corrupt fashion.
I believe that we have to eliminate the earmarks. And sometimes those projects, not -- not the overhead projector that Senator Obama asked for, but some of them that are really good projects, will have -- will have to be eliminated, as well.
And they'll have to undergo the same scrutiny that all projects should in competition with others.
So we're going to have to tell the American people that spending is going to have to be cut in America. And I recommend a spending freeze that -- except for defense, Veterans Affairs, and some other vital programs, we'll just have to have across-the-board freeze.
And some of those programs may not grow as much as we would like for them to, but we can establish priorities with full transparency, with full knowledge of the American people, and full consultation, not done behind closed doors and shoving earmarks in the middle of the night into programs that we don't even -- sometimes we don't even know about until months later.
And, by the way, I want to go back a second.
MCCAIN: Look, we can attack health care and energy at the same time. We're not -- we're not -- we're not rifle shots here. We are Americans. We can, with the participation of all Americans, work together and solve these problems together.
Frankly, I'm not going to tell that person without health insurance that, "I'm sorry, you'll have to wait." I'm going to tell you Americans we'll get to work right away and we'll get to work together, and we can get them all done, because that's what America has been doing.
BROKAW: Senator McCain, thank you very much.
Senator Obama?
OBAMA: You know, a lot of you remember the tragedy of 9/11 and where you were on that day and, you know, how all of the country was ready to come together and make enormous changes to make us not only safer, but to make us a better country and a more unified country.
And President Bush did some smart things at the outset, but one of the opportunities that was missed was, when he spoke to the American people, he said, "Go out and shop."
That wasn't the kind of call to service that I think the American people were looking for.
And so it's important to understand that the -- I think the American people are hungry for the kind of leadership that is going to tackle these problems not just in government, but outside of government.
And let's take the example of energy, which we already spoke about. There is going to be the need for each and every one of us to start thinking about how we use energy.
I believe in the need for increased oil production. We're going to have to explore new ways to get more oil, and that includes offshore drilling. It includes telling the oil companies, that currently have 68 million acres that they're not using, that either you use them or you lose them.
We're going to have to develop clean coal technology and safe ways to store nuclear energy.
But each and every one of us can start thinking about how can we save energy in our homes, in our buildings. And one of the things I want to do is make sure that we're providing incentives so that you can buy a fuel efficient car that's made right here in the United States of America, not in Japan or South Korea, making sure that you are able to weatherize your home or make your business more fuel efficient.
And that's going to require effort from each and every one of us.
And the last point I just want to make. I think the young people of America are especially interested in how they can serve, and that's one of the reasons why I'm interested in doubling the Peace Corps, making sure that we are creating a volunteer corps all across this country that can be involved in their community, involved in military service, so that military families and our troops are not the only ones bearing the burden of renewing America.
That's something that all of us have to be involved with and that requires some leadership from Washington.
BROKAW: Senator Obama, as we begin, very quickly, our discussion period, President Bush, you'll remember, last summer, said that "Wall Street got drunk."
A lot of people now look back and think the federal government got drunk and, in fact, the American consumers got drunk.
How would you, as president, try to break those bad habits of too much debt and too much easy credit, specifically, across the board, for this country, not just at the federal level, but as a model for the rest of the country, as well?
OBAMA: Well, I think it starts with Washington. We've got to show that we've got good habits, because if we're running up trillion dollar debts that we're passing on to the next generation, then a lot of people are going to think, "Well, you know what? There's easy money out there."
It means -- and I have to, again, repeat this. It means looking (ph) at the spending side, but also at the revenue side. I mean, Senator McCain has been talking tough about earmarks, and that's good, but earmarks account for about $18 billion of our budget.
Now, when Senator McCain is proposing tax cuts that would give the average Fortune 500 CEO an additional $700,000 in tax cuts, that's not sharing a burden.
And so part of the problem, I think, for a lot of people who are listening here tonight is they don't feel as if they are sharing the burden with other folks.
I mean, you know, it's tough to ask a teacher who's making $30,000 or $35,000 a year to tighten her belt when people who are making much more than her are living pretty high on the hog.
And that's why I think it's important for the president to set a tone that says all of us are going to contribute, all of us are going to make sacrifices, and it means that, yes, we may have to cut some spending, although I disagree with Senator McCain about an across-the- board freeze.
That's an example of an unfair burden sharing. That's using a hatchet to cut the federal budget.
OBAMA: I want to use a scalpel so that people who need help are getting help and those of us, like myself and Senator McCain, who don't need help, aren't getting it.
That's how we make sure that everybody is willing to make a few sacrifices.
BROKAW: Senator McCain?
MCCAIN: Well, you know, nailing down Senator Obama's various tax proposals is like nailing Jell-O to the wall. There has been five or six of them and if you wait long enough, there will probably be another one.
But he wants to raise taxes. My friends, the last president to raise taxes during tough economic times was Herbert Hoover, and he practiced protectionism as well, which I'm sure we'll get to at some point.
You know, last year up to this time, we've lost 700,000 jobs in America. The only bright spot is that over 300,000 jobs have been created by small businesses. Senator Obama's secret that you don't know is that his tax increases will increase taxes on 50 percent of small business revenue.
Small businesses across America will have to cut jobs and will have their taxes increase and won't be able to hire because of Senator Obama's tax policies. You know, he said some time ago, he said he would forgo his tax increases if the economy was bad.
I've got some news, Senator Obama, the news is bad. So let's not raise anybody's taxes, my friends, and make it be very clear to you I am not in favor of tax cuts for the wealthy. I am in favor of leaving the tax rates alone and reducing the tax burden on middle-income Americans by doubling your tax exemption for every child from $3,500 to $7,000.
To giving every American a $5,000 refundable tax credit and go out and get the health insurance you want rather than mandates and fines for small businesses, as Senator Obama's plan calls for. And let's create jobs and let's get our economy going again. And let's not raise anybody's taxes.
BROKAW: Senator Obama, we have another question from the Internet.
OBAMA: Tom, can I respond to this briefly? Because...
BROKAW: Well, look, guys, the rules were established by the two campaigns, we worked very hard on this. This will address, I think, the next question.
OBAMA: The tax issue, because I think it's very important. Go ahead.
BROKAW: There are lots of issues that we are going to be dealing with here tonight. And we have a question from Langdon (ph) in Ballston Spa, New York, and that's about huge unfunded obligations for Social Security, Medicare, and other entitlement programs that will soon eat up all of the revenue that's in place and then go into a deficit position.
Since the rules are pretty loose here, I'm going to add my own to this one. Instead of having a discussion, let me ask you as a coda to that. Would you give Congress a date certain to reform Social Security and Medicare within two years after you take office? Because in a bipartisan way, everyone agrees, that's a big ticking time bomb that will eat us up maybe even more than the mortgage crisis.
OBAMA: Well, Tom, we're going to have to take on entitlements and I think we've got to do it quickly. We're going to have a lot of work to do, so I can't guarantee that we're going to do it in the next two years, but I'd like to do in the my first term as president.
But I think it's important to understand, we're not going to solve Social Security and Medicare unless we understand the rest of our tax policies. And you know, Senator McCain, I think the "Straight Talk Express" lost a wheel on that one.
So let's be clear about my tax plan and Senator McCain's, because we're not going to be able to deal with entitlements unless we understand the revenues coming in. I want to provide a tax cut for 95 percent of Americans, 95 percent.
If you make less than a quarter of a million dollars a year, you will not see a single dime of your taxes go up. If you make $200,000 a year or less, your taxes will go down.
Now, Senator McCain talks about small businesses. Only a few percent of small businesses make more than $250,000 a year. So the vast majority of small businesses would get a tax cut under my plan.
And we provide a 50 percent tax credit so that they can buy health insurance for their workers, because there are an awful lot of small businesses that I meet across America that want to do right by their workers but they just can't afford it. Some small business owners, a lot of them, can't even afford health insurance for themselves.
Now, in contrast, Senator McCain wants to give a $300 billion tax cut, $200 billion of it to the largest corporations and a hundred thousand of it -- a hundred billion of it going to people like CEOs on Wall Street. He wants to give average Fortune 500 CEO an additional $700,000 in tax cuts. That is not fair. And it doesn't work.
OBAMA: Now, if we get our tax policies right so that they're good for the middle class, if we reverse the policies of the last eight years that got us into this fix in the first place and that Senator McCain supported, then we are going to be in a position to deal with Social Security and deal with Medicare, because we will have a health care plan that actually works for you, reduces spending and costs over the long term, and Social Security that is stable and solvent for all Americans and not just some.
BROKAW: Senator McCain, two years for a reform of entitlement programs?
MCCAIN: Sure. Hey, I'll answer the question. Look -- look, it's not that hard to fix Social Security, Tom. It's just...
BROKAW: And Medicare.
MCCAIN: ... tough decisions. I want to get to Medicare in a second.
Social Security is not that tough. We know what the problems are, my friends, and we know what the fixes are. We've got to sit down together across the table. It's been done before.
I saw it done with our -- our wonderful Ronald Reagan, a conservative from California, and the liberal Democrat Tip O'Neill from Massachusetts. That's what we need more of, and that's what I've done in Washington.
Senator Obama has never taken on his party leaders on a single major issue. I've taken them on. I'm not too popular sometimes with my own party, much less his.
So Medicare, it's going to be a little tougher. It's going to be a little tougher because we're talking about very complex and difficult issues.
My friends, what we have to do with Medicare is have a commission, have the smartest people in America come together, come up with recommendations, and then, like the base-closing commission idea we had, then we should have Congress vote up or down.
Let's not let them fool with it anymore. There's too much special interests and too many lobbyists working there. So let's have -- and let's have the American people say, "Fix it for us." Now, just back on this -- on this tax, you know, again, it's back to our first question here about rhetoric and record. Senator Obama has voted 94 times to either increase your taxes or against tax cuts. That's his record.
When he ran for the United States Senate from Illinois, he said he would have a middle-income tax cut. You know he came to the Senate and never once proposed legislation to do that?
So let's look at our record. I've fought higher taxes. I have fought excess spending. I have fought to reform government.
Let's look at our records, my friends, and then listen to my vision for the future of America. And we'll get our economy going again. And our best days are ahead of us.
BROKAW: Senator McCain, thank you very much. I'm going to stick by my part of the pact and not ask a follow-up here.
The next question does come from the hall for Senator McCain. It comes from Section C over here, and it's from Ingrid Jackson (ph).
Ingrid (ph)?
