By Maria Bartiromo A year or so ago, a lot of people—myself included—thought the Republican Presidential nomination for 2008 was Senator John McCain's to lose. But early as it is in the election cycle, McCain now faces strong challenges from former Massachusetts Governor Mitt Romney and former New York City Mayor Rudy Giuliani, as well as lesser competition from a pack of second-tier candidates. Plus there is the prospect that former Senator Fred Thompson may enter the race. Looking for that straight talk that energized many Republicans when McCain unsuccessfully sought his party's nomination in 2000, I called the senior senator from Arizona.
Do you support indefinitely extending 2001 and 2003 tax cuts?
Of course. Otherwise, it would have the effect of a tax increase. But I also support strongly a restraint on spending, which I did in 2001 when we enacted these tax cuts. Revenues have been great, but spending has lurched out of control. And not only has it affected the future of America but it has affected, badly, our Republican base, who are disgusted by our spending practices, earmarking, and corruption.
Would you extend the dividend and capital-gains tax cuts?
I would favor extending all of the tax cuts.
What about reforming the Alternative Minimum Tax?
Doing so will have an impact on the budget, but I think that if our economy continues to improve and we stop the wasteful and pork barrel spending and corruption, then we will be able to handle that. You can't impose that kind of penalty on American families and businesses.
Many middle-income Americans feel threatened by globalization, free trade, and outsourcing. Do you favor restrictions on any of them?
No, I think it would be the biggest mistake we could make. I'm a free trader. I believe that we are in this global, information technology world, and we can compete in it. We have to do a better job at education and trainingParagraph but you know, not many people realize that 50,000 Americans today make their living off eBay (EBAY). I was just out at Google doing a town hall meeting with about a thousand of their employees. Go out to Google (GOOG) and then tell me that our economy can't be vibrant. We are going through a transition as we have at other times in history. Our job is to equip America for this new competition, not to build walls to try to keep it out.
Middle America is also getting pressured by gasoline prices. Should the oil companies' windfall profits be taxed?
What we need to do is make a national priority of reducing our dependence on foreign oil. We need to go to nuclear power. Ethanol of all kinds—sugarcane-based, switchgrass, and every other source—should be encouraged. Wind, solar, all of those. But nuclear power has to be a fundamental part if we're going to address our energy needs, both from the standpoint of national security, to reduce our dependency on foreign oil, and also because we need to take on the issue of climate change, which is a real threat to our planet.
You are in the thick of a battle over immigration reform. Will there be a deal this year—or at least before President Bush leaves office?
I hope [there will be a deal]. I believe this immigration reform is an issue of national security. No matter where you stand...the status quo with broken borders is totally unacceptable. And to those who say this is amnesty, I hope they will look carefully at the [bill's] provisions...and the obstacles to either a green card or eligibility for citizenship, including going back to the country of origin. [But] we can't round up 12 million people and deport them....
China grew 11% in the first quarter, India is growing 8%. Should America be afraid of them?
I would hope not. The U.S. has faced many challenges in the past. We'll face them in the future, and we will remain the strongest and most powerful nation on earth. By the way, unless China makes progress toward democratization, toward human rights, toward the kind of political progress that is necessary for economic progress, it is going to face significant problems, including from the hundreds of millions of people who have not profited one bit from the economic boom.
So how tough should the U.S. be on China when it comes to cheap currency, intellectual-property piracy, and the fact that the markets are basically closed?
We have to use a lot of the leverage that we have, including the Olympics in Beijing, because they want to present the best image of their country. But that's not the only challenge. Militarily, China continues to build up. They shot down a satellite of their own. They have been making noises again about Taiwan. So we have to keep a careful eye on how they behave themselves, particularly in the neighborhood. That's another argument for America maintaining a military presence in Asia.
What about Russia—friend or foe?
Russia is probably the greatest disappointment in recent years. It has turned into a KGB oligarchy. [President Vladimir] Putin wants to restore the days of the old Russian empire, and he continues to repress democracy, human rights, and freedom of the press. Mysterious assassinations are even taking place. If oil were still $10 a barrel, Mr. Putin would not pose any kind of a threat. I do not believe you will see a reigniting of the Cold War. But I do believe that Putin and his cadre of KGB friends are causing us great difficulties in a variety of ways, including a failure to assist us in trying to rein in Iranian nuclear ambitions.
If you had been President in 2003, would you have taken America to war in Iraq?
Knowing the information that they had, including intelligence from every other nation that Saddam Hussein had weapons of mass destruction, yes. The problem is that the war was badly mishandled by [former Defense Secretary Donald] Rumsfeld and others, which has led to the difficulty we are in.
As the war drags on, would you back a draft or a system of compulsory national service?
No. We have the most professional, best-equipped, best-trained, and patriotic military we've ever had in our history. One of Rumsfeld's biggest mistakes was not increasing the size of the Army and Marine Corps. But there's no reason to go back to conscription.
How is America perceived around the world?
It's worse probably than it has ever been. When I'm President, I will close Guantánamo Bay. I will address climate change in the most serious fashion. And we will never torture another person being held in detention. And I would be humble.
You said you're not the youngest, but the best candidate for these times. With all due respect, Senator, some people feel your age  and your health are issues. Are you too old to be President? And is your health stable enough?
Well, I don't have any health problems, so I don't know what you mean by stable enough. I am in excellent health. I hiked the Grand Canyon from rim to rim with my son, who is at the Naval Academy. I have a 95-year-old mother. I maintain very heavy schedules. I think anybody who sees me in the debates recognizes that I'm doing just fine. Thanks for asking.
Does your age make your selection of a Vice-President a crucial campaign issue?
No, it's always a crucial issue because you base that selection on only one criterion: Who is best capable of assuming Presidential responsibilities.
Who are you considering?
No one. My ego is sizable but not quite at the level that I'm thinking about a Vice-Presidential candidate.
Maria Bartiromo is the anchor of CNBC's Closing Bell.