Oct. 9 Republican debate transcript

If this tax isn't changed, 20 million people are hit by it. If we eliminate the Alternative Minimum Tax, it costs the federal government $100 billion that has to be replaced similarly somewhere else. How do you deal with something like that?

Thompson: Well, in the first place, I don't buy the concept that any reduction in taxes is lost revenue to the government. The taxpayers haven't lost it. It's in their pocket. They know exactly where to find it.

We shouldn't confuse the wealth of government with the wealth of nations.
Just because the money is sent to Washington doesn't mean that people are any richer. In fact, just the opposite is the case.

As you pointed out, the AMT was designed for the -- to target the rich guy. And when the Democrats start targeting the rich guy, if you're a middle-class guy you ought to run to the other side of the house because you're going to get hit. They're not going to be on target. And this is another one of those cases; you point out we're going from about 4 million people covered now to over -- over 20 million people.

What we're going to have to do, though, is look at this as part of a total picture. Generally speaking, lower taxes and lower tax rates grow the economy. It's been proven in the '20s, it was proven during the Kennedy administration, proven during the Reagan administration and again during this administration. I would apply that same principle to the AMT. It ought to be phased out. I think the responsible thing to do, though, until we get a handle on our mandatory spending side of the ledger, is to index it for inflation and fix it for another year while we look at the budget in total.

Matthews: Thank you, Senator.

We're going to take a break right now.

(Announcements.)

Matthews: We're branching out into other topics.

Senator Thompson, all things considered, has the Bush policy toward Iraq been a good one?

Thompson: I think the policy that we're engaged in now is the right one. Clearly, to me, we didn't go in with enough troops and we didn't know what to expect when we got there. But now we're showing signs of progress. I think we got to take advantage of the opportunities that we have there, now that we see a window of opportunity for things to turn around and us to stabilize that place and not to have to leave with our tail between our legs. If we did that, it would make for a more dangerous United States of America.

I think we've got to come to terms with the nature of the threat that our country faces. It is a global war. Islamic fascism has declared it upon us. They look at it as something that's something that's been going on for a long, long time. They're perfectly willing for it to go on for a long time more, killing millions of innocent people in the process. They play by no rules, and they are intent on bringing down Western civilization and the United States of America. So we have to understand what's necessary and the determination that we need to show to friend and foe alike that we'll do what's necessary to fight on any front that we have to fight on. This is a front in a much broader war, and I think the young people that I talk to coming back from there understand that. In fact, sometimes it's strange to me to think that the average 20-year-old serving us in Iraq knows more about what it takes for our national security than the average 20-year veteran on Capitol Hill.

Matthews: Okay, thank you.

Bartiromo: Senator McCain, last week on the campaign trail, you were critical of President Bush for the lack of asking for sacrifice for the American -- from the American people after September 11th, adding that "Just go shopping" wasn't enough.

What would you have asked?

McCain: I would have asked Americans, when we were incredibly united -- as part of that, I'd give credit to my friend the mayor of New York City -- and Americans were ready to serve a cause greater than themselves, I would have told them, first of all, consider the military; also the Peace Corps, also AmeriCorps, also neighborhood watches, also volunteer organizations that we would form up all over America. That way we would all serve this nation.

I'd just like to mention I'm the only one on this stage that four years ago said this is a failed policy in Iraq; it's not going to work; it's got to be changed. I was criticized by Republicans for my severe criticism of Secretary Rumsfeld. I advocated the strategy that's succeeding. And thank God the American people are giving us a little window so we can let this thing succeed and not have happen, as the president of Iran recently said, the United States will leave Iraq, and there will be a vacuum, and Iran will fill it. That's what's at stake here.