Kudlow’s Money Politics

Backbone on the Line-Item Veto & the Third Rail

From my post-debate interview last night with Sen. John “Backbone” McCain.

KUDLOW: Joining us right now is Senator John McCain, Republican from Arizona. Mr. McCain, some of the distinguished panelists, all hard-bitten partisans up here, are singing your praises about a comeback kid story. What’s your response?

SENATOR JOHN MCCAIN: God bless them. Larry, could I say one thing about this line-item veto? My one regret is that I wasn’t in that discussion because I wanted to get into it. I was one of the prime sponsors of the line-item veto. It was declared unconstitutional because of the way it was written. It is not unconstitutional in the way we are writing it now. … The fact is 43 governors have a line-item veto. We’ve got to have the line-item veto. Ronald Reagan wanted it, everybody wants it, it has got to be done, otherwise we’re not going to eliminate these pork barrel projects. You’ve seen the smoke and mirrors that is going on right now on earmarks. Look, the line-item veto can be and should be constitutional and there’s a way to phrase it and there’s a way to do it … we can write it so it’s constitutional. It is a vital tool and … I was one of the prime sponsors of the line item veto when we pas sed it.

KUDLOW: How about on Social Security reform? You made a point in the debate to talk about entitlement reform, I think you said we’re basically going broke on these big entitlements. Can you put some beef on that for us? Can you give us a sense of where you go on Social Security?

MCCAIN: Sure Larry, I think everything has got to be on the table. I applaud President Bush’s efforts after the 2004 election. He said, look, come and sit down with me, the Democrats said you have to have tax increases on the table we got a little sidetracked on personal savings accounts, which I strongly support. I think [personal savings accounts are] one of the major ways we’re going to allow people to realize real retirement benefits. But I really believe you have to have everything on the table, but I’m opposed to tax increases, I don’t think you have to do it. I think you can get a study headed by Greenspan or one of those people, and implement it and you have to shame the Democrats … they wouldn’t sit down with us … to say come and sit with us at the table and we’ll fix this — it’s going broke. … I go around the country with one chart: how much money is coming in, how much is going out. When there’s more going out than coming in and there’s no money left, and ask the American people if that is what they wanted to do to the next generation of Americans.

Larry Kudlow — Larry Kudlow is CNBC’s senior contributor. His new book is JFK and the Reagan Revolution: A Secret History of American Prosperity, written with Brian Domitrovic.

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