CNN's John King spoke with Sen. Lindsey Graham (R-SC) about the crisis in Egypt, federal spending, immigration and much more. This interview will air tonight on John King, USA - 7pm ET. A full transcript is below the jump.
MANDATORY CREDIT: JOHN KING, USA
THIS IS A RUSH FDCH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, HOST, "JOHN KING USA": Senator Graham, I wanted to get your sense of how you think the president is handling this crisis with Egypt. And in doing so, I want to ask you to help me break a tie. I want you to listen here to the 2008 Republican ticket, Senator John McCain, Governor Sarah Palin. On this question, they disagree.
(BEGIN VIDEO CLIP)
SARAH PALIN (R), FORMER VICE PRESIDENTIAL CANDIDATE: This is a 3:00 a.m. White House phone call and it seemed for many of us trying to get that information from our leader in the White House, it seems that that call went right to the answering machine.
SEN. JOHN MCCAIN (R), ARIZONA: I have to say, the president, I think, is handling this situation well under the most difficult kind of circumstances. We are paying a price for historic neglect of human rights which we have traditionally stood for throughout our history.
(END VIDEO CLIP)
KING: Who's right, Senator Graham, John McCain or Sarah Palin?
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Oh, I think - I think President Obama is - has handled this situation well. Secretary Clinton was in Munich this weekend, talking about the way forward. And, quite frankly, President Obama has handled it well.
Mubarak is going to go. He's announced he's not going to seek reelection. The question for the president, Obama, the country and the world is, what do you do between now and September? The sooner we can get a transition government, the quicker we can build opposition capacity to have a full and fair, free, transport election September the better. But I really have no fault with the president, Obama, the way he's handled this process.
KING: So then what would you say to Governor Palin, if you had a chance to call her up? I assume you wouldn't wait until 3:00 a.m. to do it - to call her up and say look, governor, you're wrong here and here's why?
GRAHAM: Yes, well, you know, she's a friend and we just agree - disagree on this one. I thought the Iranian crisis last year, maybe a little over a year from now, when President Obama really was slow to react and not get behind the demonstrators, was a missed opportunity. And I think what he's done in Egypt has sort of been lessons learned from Iran.
So I disagree with Governor Palin over this particular issue. But I think the lesson from Iran is that if you don't get behind the right side of history quickly, you will regret it. And I think we lost an opportunity in Iran and I think we're creating an opportunity in Egypt by being involved.
KING: And so there's some disagreement, obviously, among Republicans on how the president is handling this. There's also, as you know, a conversation among Republicans that now we'll get more attention because of the uncertainty in the Middle East. Rand Paul, a new Senate Republican, one of your colleagues now among those saying in this time of record deficits, we need to cut foreign aid, including the aid that goes to Egypt and Israel.
KING: You're now the ranking Republican on the subcommittee that makes those decisions. What would you say when Rand Paul and others come to you saying, Senator, we just can't afford it?
GRAHAM: Well, here's what I would say to - to - to Senator Paul and Senator Leahy, who is the chairman. Let's watch what we say and do when it comes to making statements about funding for Egypt. The army is the most stable institution in Egypt. They're respected by the people. And most of our aid for the last 30 years has gone to the army. And before the 30 year involvement by the United States, they were in the Soviet sphere, where the Soviet empire has collapsed.
But it is good that we have a relationship with the army. They buy American equipment. Their officers train here in America. And this relationship we've had with the army has been a godsend during this crisis.
So I would say to all of my colleagues, let's slow down, take a deep breath. The foreign operation budget is less than 1 percent of total federal spending. But to Rand Paul, my - my friend from Kentucky, you're right, we can reform that budget. We can save some money. There's some money being spent on U.N. programs that I think have been dubious, at best.
But ask General Petraeus, General Austin, Admiral Mullen about the value of the civilian military partnership, U.S. AID, State Department, the Department of Justice, the Department of Agriculture. They're part of the fight in Afghanistan. And these civilian programs that will allow us to hold and build in Afghanistan and Iraq are, I think, national security programs that need to be protected like national security spending. But, yes, reform is on the table. But getting out of the foreign operations assistance to our friends business only buys trouble. It's a penny wise and a pound foolish, in my view.
KING: Let me ask you about some other debates. The new Republican House has been in business for a few weeks now. You have more Republicans still in the minority on the Senate side. And, as you know, the Democrats are now starting this narrative, what about the jobs, that it's a narrative the Republicans used against the Democrats back in the health care debate.
KING: When you look at what's happening right now, the health care repeal has been priority one on the House side among Republicans, priority one on the Senate side among Republicans. On the House side this week, trying to do some anti-abortion legislation. Should the Republicans be putting forward, first and foremost, some kind of a jobs program?
GRAHAM: You know, I think what we should do, first and foremost, is put together a budget that gets our fiscal house in order. One of the reasons it's harder to create a job is there's so much publicly held debt in this country it crowds out private financing.
I think extending the tax cuts is going to be good for job creation. But we should look at flattening the tax code and creating a new tax code. If you want to create jobs, lower the corporate tax. History has told us that when you have low tax rates, John Kennedy - John F. Kennedy told us this - you invite capital formation.
So, yes, jobs are important, but our country is in a fiscal situation on spending and debt that is untenable. So the big thing the Republican Party could do for America is to come up with budgets that reduce spending and, in a bipartisan fashion, deal with entitlements.
President Obama has a unique opportunity this year to do something on Social Security that I think would get a lot of bipartisan support and help us to - to - to turn around our long-term liabilities. So I would challenge him to work with Republicans on entitlement reform, starting with Social Security.
KING: You are working with a Democrat, Chuck Schumer of New York right now, to try to have yet another set of conversations about whether it's possible to bring forward some large scale immigration reform measure.
KING: Is that a fool's errand? And I ask in the context, I know you've dedicated a lot of...
KING: - time to this over the years...
KING: Is it a fool's errand in the sense that, do you have a commitment from the House speaker? For example, if you could somehow get a bill out of...
KING: - the United States Senate, is there any chance this new House Republican majority would even bring it up?
GRAHAM: I think from a national security perspective, it is irrational to continue the current policies we have on immigration and the common ground is securing the border. Senator Schumer is very - very good on immigration. President Obama and Senator McCain had a discussion about the way forward on immigration.
I think my House colleagues, Republicans and Democrats, would rally around the idea of stronger border security as a start. The Cain/McKyl 10 point plan for border security, I think, is the best way to start the debate. Pass those border security measures as standalone bills then it puts the pressure on all of us to go forward on temporary worker programs...
KING: And do you think you could do that this year?
GRAHAM: I think that's the way forward. You know, I - - I've taken a beating, at times, for trying to come up with a comprehensive immigration solution. Starting with border security, it's essential, but 40 percent of the people here legally never came across the border, they over stayed their visas. What do you do about 10 million plus people that are here illegally?
I don't think you can put them all in jail. But you need a rational system to make sure you don't have a third wave. I - I've been involved with this issue. I continue to talk with the president, with Democrats and Republicans. But I think the way forward on immigration is to secure the border first, then move forward to the other moving parts.
KING: Let me ask you, lastly, we're beginning to see - slowly beginning to see the Republican primary field...
KING: - for 2012 start to take shape. You were a big help to your friend, John McCain, in your very important state of South Carolina last time.
Who is Lindsey Graham for this time?
GRAHAM: Well, I'm for the most conservative person who is electable. If we're going to have a...
KING: And that would be who?
GRAHAM: Well, I don't know yet. That's a - you're good at your job. I really don't know. You know, Iowa, New Hampshire and South Carolina tell a story in the Republican primary world. Iowa is a caucus state. New Hampshire is sort of a purple primary. South Carolina is a conservative state. But you have a lot of people coming into the primary.
Conservatives themselves, it's a center-right nation - but the nominee for the party is going to have to win Independent voter at the end of the day. They're paying attention to Republicans because of the overreach by Democrats. We're back in the game because our Democratic friends sort of blew it. And we've got a chance now to re-engage with the American people.
The health care debate, I think, will define 2012. I want to repeal it and start over. Foreign policy could become a good issue. The detainee problems this country faces have not really been addressed. Reading terrorists their Miranda rights, things like that can shape up the debate between the Republican nominee and President Obama. I think he is beatable. But for our party to win, our nominee has got to get those Independent voters who are center-right. They're not in the right ditch, they're not in the left ditch.
So we'll see what happens.
KING: All right, when - when you pick that horse, you come back and let us know.
GRAHAM: I will let you know, John King.
KING: Senator Lindsey Graham of South Carolina. Thanks for your...
KING: Thanks for your time, Senator.
GRAHAM: Thank you, buddy.