BLITZER: Would it be wise, because Iraq is now exporting a lot and pumping a lot of oil, much more than it was, with the relative quiet that's developed in certain parts of the country over the past year. They're exporting; they're pumping more oil.

Should the Iraqis be selling oil to the United States at a discounted price?

HOLTZ-EAKIN: Oil should occur on the world market at market prices.

BLITZER: Why not -- given the hundreds of billions of dollars the United States has spent to rebuild that country and try to bring some stability to the Iraqis, why not have them export oil to the United States at a reduced price? They would still make some money, but they wouldn't make as much as they are making right now.

HOLTZ-EAKIN: Look, as senator McCain, who has gone there and seen the conditions on the ground eight times, correctly pointed out, we had to bring a new strategy to Iraq.

We had to get some peace, a path to prosperity for the Iraqis. But that path doesn't lie in the U.S. being dependent on Middle Eastern oil. The entire strategy was built around getting the United States to be able to exit with peace and build energy security for ourselves at home.

BLITZER: So, just to be precise, Senator McCain believes the Iraqis should export oil to the United States at the going international price, which, right now, is about $135 a barrel?

HOLTZ-EAKIN: Senator McCain believes there should be an international oil market but he believes the United States should not be self-dependent on that from the Iraqis or anyone else.