This is a rush transcript from "On the Record," April 4, 2012. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Right now, the turf war, and it is simply bizarre. It's sparked by the battle over the national health care law. Now, it started on Monday, when President Obama gratuitously insulted the Supreme Court, followed by the president's twisted and incorrect statement about the Court's power.
This obviously enraged a federal appeals court down in Texas. They fired back, issuing an order to the Justice Department to give a written explanation of President Obama's comments by noon tomorrow.
And today, Attorney General Holder jumped into the fuss.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: (INAUDIBLE) plan on submitting a response to the fifth district court and Judge Smith on judicial review tomorrow?
ERIC HOLDER, ATTORNEY GENERAL OF THE UNITED STATES: Yes, we're in the process of formulating that response now, and we will be sending something to Judge Smith and I guess the other members of the panel.
UNIDENTIFIED MALE: Along what lines? Do you know how you'll respond?
UNIDENTIFIED MALE: What would be appropriate?
HOLDER: Well, I mean, I think that, you know, what the president said a couple of days ago was appropriate. He indicated that we obviously respect decisions that courts make under our system of government, and since Marbury versus Madison, I guess back in 1803, courts have the final say on the constitutionality of statutes.
But courts are also fairly deferential when it comes to overturning statutes that the duly elected representatives of the people, Congress, pass. We think that the Affordable Care Act is a statute that can stand constitutional muster, has been examined by a number of courts, held constitutional by a number of courts, including by a couple of very prominent conservative jurists.
(END VIDEO CLIP)
VAN SUSTEREN: Well, right now, the Justice Department has less than 14 hours to meet the court's deadline. So what should the Obama administration be doing?
Karl Rove is here. Nice to see you, Karl.
KARL ROVE, FOX NEWS CONTRIBUTOR/FORMER BUSH SENIOR ADVISER: Nice to see you.
VAN SUSTEREN: All right, the attorney general tried to sort of nuance that one. He said the president's response was appropriate, but it was wrong. He didn't say it was wrong. I did. So I mean, the attorney general was trying to be, I guess, polite about his boss.
VAN SUSTEREN: So how does the president sort of pull out of this sort of mess that he's made?
ROVE: Well, first of all, let's be clear. What Attorney General Holder described as the president's remarks bear little relationship to what the president actually said. The president never said Marbury versus Madison. He never said the Supreme Court has the right to declare it unconstitutional. It was, frankly, a thinly veiled threat, and I thought it was unbecoming to the president. But the...
VAN SUSTEREN: Well, actually, day two, though, I actually thought was worse because on day two, he said that -- he sort of backed off that, and what he said is that, you know, if the Supreme Court does strike this down that it's going to be horrible for people.
VAN SUSTEREN: In other words, saying that the ends justifies the means...
ROVE: That's correct.
VAN SUSTEREN: ... when the analysis should be whether or not...
ROVE: That's right.
VAN SUSTEREN: ... it is constitutional and let the Congress and the Supreme -- and the president pick up the mess.
ROVE: The Supreme Court has to act as the defender of the Constitution and not to be looking at, as you say, the outcomes. They have to be looking at, is it in conformity with the Constitution of the United States?
Ironically enough, though, it is now within Attorney General Holder's hands to sort of let this controversy die away. If he provides a document tomorrow that is not confrontational, that is deferential, that goes out of its way to be responsive to Justice Smith's -- Judge Smith's request, then this issue will start to away.
But if he is defiant, if he attempts to, you know, sort of find a way to needle either Justice -- Judge Smith or the United States Supreme Court in it, it'll simply make the controversy last longer.
VAN SUSTEREN: You know, I have a different view of this because, I mean, I think what happened was, is down at 5th circuit, is the court obviously was angry about the president's remarks because the president called them "unelected" when they are presidential appointments for life. The president doesn't even have a lifetime job.
And so they asked the Justice Department lawyer about whether or not the federal courts have authority to review statutes. And she promptly responded, Yes, Marbury versus Madison. That should have been the end of it.
But then the court decided, because they were still angry -- they fired off this letter...
VAN SUSTEREN: ... to Justice. And so now you've got -- you've got the president bullying the...
VAN SUSTEREN: ... the federal courts, the Supreme Court, and now you've got the federal court sort of bullying back.
ROVE: I don't see it bullying back, but I do see it as being defiant. Because remember, this is not the first time the president has made the United States Supreme Court a political whipping boy.