ABC’s George Stephanopoulos Frets to McCain: Tax Cuts Will ‘Increase the Deficit’

Good Morning America’s George Stephanopoulos played defense for the White House on Tuesday. While talking with John McCain about Obama’s 2010 proposals, he sounded annoyed that the Senator’s ideas for job creation would include tax cuts: "But, those tax cuts are going to increase the deficit, aren't they, sir?"

After McCain declared his opposition to Democrat spending proposals, the host pressed, "If you're against that, what job creation proposals are you for?" Continuing the Democrat-friendly theme of McCain as obstructionist, Stephanopoulos quoted Harry Reid’s attack on McCain in Sunday’s New York Times: "‘My amazement has been John McCain. I thought he'd turn out to be a statesman, work for things. He is against everything. He's against everything.’ Your response?"

Over a two day period in early January, Stephanopoulos followed a similar pattern. On January 7, the host talked to Democrat (and friend) James Carville about the failed Christmas Day bombing. He mostly worried about the "political fallout" for the President.

On January 8, Stephanopoulos interviewed former Mayor Rudy Giuliani and fussed, "So, bottom line right now, the President has stepped up. He's taken responsibility. He's calling it a war. Are you satisfied now with his response?" (Stephanopoulos did do a better job in a second interview with Carville on January 25.)

A transcript of the January 26 segment, which aired at 7:08am EST, follows:

GEORGE STEPHANOPOULOS: For the Republican reaction, let’s turn live now to Senator John McCain He's at the Capitol this morning. Good morning, Senator.

SENATOR JOHN MCCAIN: Good morning, George.

STEPHANOPOULOS: I want to get to that proposal for a spending freeze in a second. But, first, al Qaeda, the prospects for home grown terror. We have this foiled bomb plot in New Jersey overnight. No indication yet that that’s homegrown terror. But, we have seen other incidents. And so many have been connected to this American citizen in Yemen, Anwar al-Awlaki the administration now debating whether it would be appropriate to take him out. Do you have any qualms about that?

MCCAIN: No.

STEPHANOPOULOS: None at all?

MCCAIN: No. I think these people cannot have sanctuary anywhere in the world. I would love to work very closely with the governments of the countries in which they reside. But for us to have some kind of sanctuary for someone who wants to destroy America is just foolishness. But, I would also point out again, our ability to find out what the Christmas bomber's connections were- were totally wiped out. Without consultation of any heads of our intelligence, agencies, the Justice Department decided to give this guy his Miranda rights. That's one of the worst things that I have seen happen in a long time. Particularly when the President finally acknowledged that we're in a war.

STEPHANOPOULOS: So, are you unsatisfied with how the President is prosecuting the war on terror?

MCCAIN: Well, I'm certainly not satisfied when you have a person who may have direct ties to al Qaeda, is given Miranda rights, and put on trial in a civilian court. When clearly, they're an enemy combatant and a terrorist. That sends the wrong signal, certainly, around the world.

STEPHANOPOULOS: Let's turn to the domestic issues. White House announced this morning a spending freeze. Three-year freeze on all non-defense discretionary spending. It's already drawing some criticism from your party. The House Majority Leader’s- House Minority Leader John Boehner saying, "Given Washington's unprecedented spending binge, this is like announcing you're going on a diet after winning a pie-eating contest." But, isn't this exactly what Republicans have been calling for? You called for this in the campaign.

MCCAIN: Yes and we need to do it. And I think it’s important. And I'll support it. But the President’s going to have to promise to veto bills that are laden with pork barrel spending. And it's going to save a good amount of money over time. About $15 million last year. Meanwhile, this year, the Senate and the House are looking at $100 billion or more of new spending just on, quote, "stimulus," on more money, sending bad money after good, in an effort to stimulate the economy. So, I think it has to be put in that context. But the President has to commit to vetoing any of these appropriations bills that have earmarks or pork barrel spending on them. That means taking on Democrats and Republicans.

STEPHANOPOULOS: From what you just said, it sounds like you're against the new bill that Senate Democrats are proposing, that Jake Tapper just talked about, about $90 million for job creation. If you're against that, what job creation proposals are you for?

MCCAIN: Tax cuts. Payroll tax cuts. Giving more tax incentives and breaks to small businesses. Making sure that we do not raise taxes, which may happen if the present tax cuts lapse. There's a lot of things that we can do to- including, by the way, a path to some kind of fiscal sanity. Another $1.4 trillion-

STEPHANOPOULOS: But, those tax cuts are going to increase the deficit, aren't they, sir?

MCCAIN: No. If you cut people's taxes, I think, then it stimulates the economy. We certainly found that out during President Reagan.

STEPHANOPOULOS: Let's turn to Ben Bernanke, the Fed chairman. You voted for the financial rescue that he endorsed. But, you’re now, you're against his reappointment. A lot of administration officials, market experts say that's going to create absolute turmoil in the markets if he's not reappointed. Are you willing to take that risk?

MCCAIN: Yes. Because, I believe he was the captain of the ship when it hit the iceberg. He was there at the casino when the gambling was going on. And they didn't do anything about it. And when Paul Volcker and Ronald Reagan were around, they cut taxes and restrained the role of the Fed. Now, we have the largest amount of liquidity from the Fed in the market today than any time in history.

STEPHANOPOULOS: Can you defeat him?

MCCAIN: I don't know. I just vote for myself.

STEPHANOPOULOS: Finally, sir. The Senate Democratic leader, Harry Reid, had tough words for you in Sunday's New York Times. He said, "My disappointment- no. That's the wrong word. I'll try to find a better word. My amazement has been John McCain. I thought he'd turn out to be a statesman, work for things. He is against everything. He's against everything." Your response?

MCCAIN: Well, Harry Reid attacked me and my temperament and attacked my character during the campaign. That's rather typical of Senator Reid. He's the one that declared the war in Iraq lost. Also, accused me and other Republicans of being like those who oppose the abolition of slavery. That's sort of his modus operandi these days. So, I'm proud of my record and service to the country.

STEPHANOPOULOS: Senator McCain, thanks for your time this morning.