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Kerry: Closing loopholes will help fund promises

Sen. John Kerry
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• The Candidates: Bush | Kerry
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Candy Crowley
John F. Kerry
Mary Cheney

MILWAUKEE, Wisconsin (CNN) -- Sen. John Kerry said Friday that he can't pay for all of the federal programs he's proposed by increasing taxes on the wealthiest Americans, but instead will scale back federal agencies and eliminate corporate loopholes for additional money.

Kerry has proposed rolling back tax cuts for Americans with incomes of more than $200,000 a year and use the money to fund a host of domestic initiatives.

In an exclusive interview with CNN's Candy Crowley, he said, "No, you can't pay for all of it." It was his first interview since the presidential debate.

To bridge the gap, Kerry said some of the money would come from closing $40 billion in corporate tax loopholes, consolidating federal statistical and export agencies and cutting the number of federal contractors by 100,000.

Kerry said he would follow a fiscally responsible "pay-as-you-go" plan and clearly identify how new programs would be financed.

"George Bush has the biggest government, biggest spending, in American history," he said. "We can reduce the burden on the taxpayer and put money into these things that are more valuable."

President Bush has hit Kerry hard over his spending proposals saying there is a "tax gap" between what he has promised and what he can raise by rolling back tax cuts for the wealthiest Americans.

During a speech in Iowa Friday, Bush said that in order for Kerry to keep his promise, "he would have to break almost all of his other ones."

Kerry's plans include expanding health care and increasing funding for education and veterans benefits, as well as cutting taxes for the middle class.

Bush has drawn a blank twice when asked to name any mistakes he has made while president.

Crowley asked Kerry whether he had made any mistakes in the last three and a half years. Kerry immediately pointed to the number of federal programs he's promised.

"I think I made a mistake in terms of the breadth of some of the programs that I talked about in the primaries because the deficit was larger than we anticipated and we obviously couldn't afford it. So I've scaled them back since then," Kerry said.

Kerry said he does not consider voting to give President Bush the authority to take military action against Iraq among his mistakes.

"We gave the president the authority to load the gun, to hold the trigger, so to speak," Kerry said. "We didn't tell him to shoot himself in the foot."

"I would have wanted that authority if I was president, because it was the only way Saddam Hussein ever responded to anything, is with that threat of force. But I would have used it very differently."

Kerry was also asked to explain why, despite his criticism of the war as a mistake, he now advocates staying in Iraq, when he advocated leaving Vietnam after returning home from his Navy service there.

"They're very different. This is a war on terror. That was a civil war, an ideological war," he said.

Crowley responded, "But you said there wasn't a terror threat, right?"

"There is now. That's the problem," Kerry said, adding that Iraq has now become an "extraordinary magnet for jihadists" and a "haven for terrorism" because of Bush's mishandling of the situation.

"I know how to win this peace, and we have to win it," he said.

Kerry also defended his reference during Wednesday's debate to Vice President Dick Cheney's lesbian daughter, Mary, while answering a question about whether he believes homosexuality is a choice.

Both Cheney and his wife, Lynne, have been highly critical of those remarks.

"It was meant as a very constructive comment and a positive thing. I respect their love for their daughter, and I respect who she is, as they do," Kerry said. "I think it was a way of saying, look, she's who she is. I have great respect for her, great respect for them."

"It was entirely [meant] as an example of how people come together around these choices, entirely constructively and respectfully."

During the debate, Kerry said he does not believe people choose to be homosexuals and suspected that Mary Cheney, a one-time gay advocate, would have the same beliefs.

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