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 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.