Interview with Charlie Gibson of ABC News

GIBSON: Senator, do we have an agreement on legislation to address this problem?

MCCAIN: We do not, but I am very hopeful that we are making progress and I know we are making progress. I have talked to many of my colleagues today and had conversations with them, talked about this issue and have no doubt about the crisis we are facing. We're talking about jobs all over America, we're talking about loans, we're talking about ability of small businesses to stay in operation. And my colleagues are aware of that, and I'm confident that we're going to move forward and get this issue in a bipartisan agreement which is what the American people want.

GIBSON: What's the hang up?

MCCAIN: Well, members have concerns about a bailout, frankly of $700 billion, or an expenditure -- let me put it this way -- an expenditure of $700 billion of taxpayers' money. This is the biggest thing of its kind obviously in history. They have legitimate concerns, some of those have already been satisfied such as accountability and oversight board, CEO executive pay. A number of issues have already been resolved and I'm hopeful we get them resolved and get going and get this thing done.

GIBSON: But this afternoon, the chairman of the House Banking Committee, the Chairman of the Senate Banking Committee, walked out and said "we have an agreement on principles." And indeed even Senator Bennett from your party said, "I now expect we will indeed have a plan that can pass the House, pass the Senate, be signed by the president and bring a sense of certainty to this crisis that is still roiling the market." What happened between one o'clock this afternoon and four o'clock, when you went into the meeting with the President?

MCCAIN: Well I believe that immediately after that, Congressman Boehner, the Republican leader in the House, came out and said there was not a deal. But again, I think significant progress has been made, I believe it will be made, and I believe that we'll reach a successful conclusion. Members are aware of the crisis situation that we're in. They do have concerns, which I think when you're talking about $700 billion or a trillion dollars, that need to be addressed so that this is a genuine bipartisan, bicameral agreement.

GIBSON: It would seem that most of the conditions that you wanted put into the bill were done so, it was so. They're in there, so what is it that is holding up agreement from the House Republicans?

MCCAIN: Well, they have had various concerns, including a provision for insurance in there, including additional home loan mortgage guarantees. There are a variety of concerns, I think a lot of them have been satisfied. And I believe and I'm hopeful that we can satisfy all of them and move forward very quickly. They are aware of the urgency. They are also aware of their responsibilities to the taxpayers and they're hearing, frankly from their constituents that have concern about this as well, and we as elected officials have to listen to those concerns of the people that we represent.

GIBSON: You say agreement you think can be reached? Can it be reached around --

MCCAIN: Soon -- Yes.

GIBSON: -- around the basic administration plan of addressing this with x numbers, hundreds of billions of dollars to buy the bad debt from banks, or is it going to be necessary to come with some totally different approach?

MCCAIN: No. I think it's based around the proposal. Although there have already been some changes to that basic proposal. That's the process we go through. But I think that's basically what we use to reach a successful bipartisan bicameral agreement. But I also think that concerns have to be addressed and I believe they'll be addressed as rapidly as possible and I understand that.

GIBSON: Is the hang up the House Republicans?

MCCAIN: Well, not all -- Senate Republicans were satisfied, a number of them had a great deal of concern about it as well, and I understand some Democrats in the Senate did as well, as well as some House Democrats, so. But it was primarily and it is primarily some concerns that a lot of House Republicans, but Senate Republicans as well and I don't know that much about Democrats' sentiment.

GIBSON: Do we have a debate tomorrow night?

MCCAIN: Well I'm hopeful, very hopeful that we can. I believe that it's very possible that we can get an agreement so that -- in time for me to fly to Mississippi. I understand that there is a lot of attention on this but I also wish Senator Obama had agreed to ten or more town hall meetings that I had asked him to attend with me. Wouldn't be quite that much urgency if he agreed to do that, instead he refused to do it.

GIBSON: What is the practical deadline? There would have to be an agreement -- a bill that could be signed off, bipartisan, bicameral by tomorrow morning, by tomorrow noon?

MCCAIN: I don't know exactly, Charlie. But again I'm hopeful we can get the outlines and the specifics that a lot of people want to see and get it done quickly. In -- members of Congress very aware that the markets are watching very carefully what we do. And I see nothing but optimism amongst the many people, colleagues of mine, both Republican and Democrat that I talked to today that we'll reach a successful conclusion, I confident we will.

GIBSON: Was the agreement on principles announced by Senator Dodd and Congressman Frank and others this morning -- was that enough for you to sign on, or do you want other changes in this bill?

MCCAIN: Well, the principles frankly are those that I articulated. And as always the devil is in the details many times and I wanted to see of course whether homeowners are adequately addressed at keeping people in their homes and other aspects of it. But basically I set forth a set of principals that are very similar to these as well as the original plan of Secretary Paulson's, but there have been significant changes as we went through.

GIBSON: Just one final question. Can you describe the meeting for me? When was the moment when you realized, we're not going to get an agreement in this meeting?

MCCAIN: The one at the White House? Well, I knew going in because I'd been over on the House side with my House Republican colleagues. There never was a deal, but I do believe the meeting was important to move the process along. I think it's good for us all leaders to get together, meet with the president. I think it gave us a renewed sense of urgency and I'm confident we will move forward, and I'm confident that we will reach a conclusion, and I'm confident that it may have a beneficial effect, not just on the markets, but on people's abilities to keep their jobs and their homes.

GIBSON: And what happens next -- negotiations through the night? What happens?

MCCAIN: We'll continue with negotiations of course -- discussions. Again, I hate to be so repetitious -- I am confident we'll reach an agreement. We have to.

GIBSON: Alright senator, appreciate your being with us. Thanks.

MCCAIN: Thank you.