• With: Sen. Lindsey Graham

    This is a rush transcript from "On the Record," September 21, 2011. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: And if the president didn't have enough troubles with the Palestinians seeking statehood, try this one. There are new troubles tonight for President Obama's health care law. Senator Lindsey Graham says it's going to bankrupt your state. Senator Lindsey Graham joins us. Good evening, sir.

    SEN. LINDSEY GRAHAM, R-S.C.: Good evening. That was a very interesting segment. One thing I'd like to add. The ambassador's right. If they try to make this end run and avoid negotiating with Israel and go to the United Nations to establish statehood, one, who's running the state? Is Hamas part of the government? They're very ill-advised. There will be a bipartisan pushback from the Congress. It will be -- I think it will be decisively negatively received in the Congress if they try to do this.

    VAN SUSTEREN: And do what?

    GRAHAM: Try to establish statehood. Funding will be at stake. A lot will be at stake.

    VAN SUSTEREN: All right. Health care -- you say that the president's going to bankrupt the states. Do you have a solution?

    GRAHAM: Yes, I do, Medicaid. Medicaid is a program at the federal government level that the states administer with a lot of federal government mandates for low-income people. Under the Obama health care bill -- remember that bill...

    VAN SUSTEREN: Right.

    GRAHAM: ... that was passed in the middle of the night behind closed doors, and they bought 60 votes? That bill? And it expands Medicaid eligibility in my state so that 29 percent of the people in the state will be on Medicaid, 17 million more people will be added to state Medicaid rolls. It will bankrupt...

    VAN SUSTEREN: Nationwide?

    GRAHAM: ... my state...

    VAN SUSTEREN: Is that your state, the 17 million, or...

    GRAHAM: The 17 million for the country...

    VAN SUSTEREN: OK.

    GRAHAM: ... 485,000. And here's what my governor said. The "Obamacare" Medicaid expansion is a disaster for South Carolina's budget. With an opt-out provision, which Senator Barrasso and myself have proposed...

    VAN SUSTEREN: OK.

    GRAHAM: OK, we're going to allow states -- you know, did you have a voice in this health care debate? Remember when I was on here with you the night before it was passed? I had saw the bill, like, a few hours before we were going to vote on it. Remember that?

    VAN SUSTEREN: I do remember that.

    GRAHAM: No one's had a say in the country about Obama health care. It's all done in this building behind closed doors. What Senator Barrasso and I have said, give states -- in Texas, it could cost them $24 billion of new money to match the expansion. The state has to put dollars on the table to get federal government Medicaid dollars. In my state, $1 billion will be required for South Carolina to come up with in the next decade to get federal Medicaid money, 29 percent of my state...

    VAN SUSTEREN: So you want -- so you want to opt out.

    GRAHAM: Opt out!

    VAN SUSTEREN: OK, but here's the problem with you opting out. The whole idea of everybody being in is everybody's contributing to lower the cost of health care. So if you opt out -- now, I mean, if everybody -- plus, we've got the problem that the president through the HHS has issued thousands of waivers. A lot -- everyone's jumping ship! So it's going to -- they're going to leave about five of us left standing paying for this!

    GRAHAM: That's in the private sector. Tom Coburn said something last night on your show that was very important. When you ask employers what's the biggest impediment to hiring, what's the biggest reason you're not hiring people, you don't know what your health care costs to be because of the Obama health care bill. If you want to put states in perpetual bankruptcy, expand Medicaid. Medicaid is a program that doesn't work very well. Adding 17 more million people to the program.

    VAN SUSTEREN: OK. Let me ask you about that 17 million.

    GRAHAM: Will bankrupt...

    VAN SUSTEREN: Let's say that you -- let's say you opt out, your 485,000 people...

    GRAHAM: Yes.

    VAN SUSTEREN: ... who are on Medicaid, the expanded Medicaid. What happens to those 485,000 people when they get...

    GRAHAM: The State of South Carolina, believe it or not, has the ability to deliver health care services based on what we think is best, not what Washington.

    VAN SUSTEREN: What does that mean? (INAUDIBLE) going to be a cost.

    GRAHAM: Well...

    VAN SUSTEREN: I mean, what -- I mean, what -- you said -- are you saying you can do it...

    GRAHAM: I am saying that it would allow the states from being forced into Medicaid expansion when they can't afford the Medicaid bill they've got. The 485,000 people that are going to put on Medicaid in South Carolina, the 17 million nationally, is going to create state budget liability that will make it impossible...

    VAN SUSTEREN: How -- how's that different than...

    GRAHAM: We have to cut education. We'll have to cut law enforcement. Where are we going to get the billion dollars from?

    VAN SUSTEREN: But explain to me, though -- I mean, if -- I mean, OK, let's -- the 17 million, if they're dumped out of the federal Medicaid and if the states are going to pick...

    GRAHAM: They're not in Medicaid now.

    VAN SUSTEREN: OK, but let's say -- let's say they're not because of the opt-out provision. All right, the 17 million then become the burden of the states or you don't do anything for them at all.

    GRAHAM: Well, what I would like to do is find a way to provide a access and quality health care without bankrupting my state. It would be possible, I think, to insure people without "Obamacare." "Obama care" increases federal government programs to the point that only 20 percent of the country will be in private sector health care by 2014.