• This is a rush transcript from "On the Record," June 28, 2012. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: The Supreme Court's ruling is setting social media on fire, former Alaska governor Sarah Palin quickly taking to Twitter. She tweets, "Obama lied to the American people again. He said it wasn't a tax. Obama lies, freedom dies."

    Governor Sarah Palin joins us. Good evening, Governor.

    SARAH PALIN, FOX NEWS CONTRIBUTOR/FORMER ALASKA GOVERNOR: How are you, Greta?

    VAN SUSTEREN: Very well. Governor, that's about 140 characters or less as to how you feel about this decision today. Now tell me, given more chance to amplify it, your view of what happened today.

    PALIN: You know, I received a lot of messages about this one today and a lot of the emails and texts used the word "treachery" in the messages. And I tend to agree with that term used to described what happened today.

    But you know, we got to be optimistic about it. Basically, what Chief Justice Roberts did for us, for the American people, was put this issue "ObamaCare" and the individual mandate back in the hands of the people via our representatives.

    So now back in Congress's hands, Congress has opportunity to act on this tax, as this has been deemed a tax, as opposed to Obama's insistence that it wasn't a tax. And after the July recess, I expect Congress to come in and rescind this tax. They have the power to adopt and enact a tax. They also have the power to rescind it. I want to see that done in July.

    VAN SUSTEREN: All right, you know, President Obama has said this is not a tax. It was Chief Justice Roberts and the majority that has decided, has deemed it a tax, which is, of course, their privilege. They are the Supreme Court. I'm curious, is this a tax or not?

    PALIN: Absolutely it's a tax. It's nearly a trillion dollars worth of tax via levies, fines, tariffs, if you will, whatever anybody else wants to call them. This is a penalty. It is a tax on the people. It's a tax on states. It's a raiding of Medicaid funds which will result in states having to find other funds to supplement their Medicaid budgets.

    Overall, this is about a trillion dollars more tax put on the American people. Do people think, Greta, that there really is anything such as a free lunch? There is no such thing as a free lunch.

    And the 50 percent of Americans who are paying their taxes today are going to get hit with even more tax to pay for now this mandate of "ObamaCare."

    The other 50 percent who are thinking that perhaps they're going to get a free ride and get some free health care, they're not. They're going to have less availability of health care. They'll have fewer choices. They'll have less efficient, more bureaucratic health care, and it will be rationed. To say otherwise really, truly defies economic and common sense to say that health care with more enrollees in the programs will not have to be rationed..

    So people who are thinking that this is going to be a free ride for them, the 50 percent of Americans who aren't paying taxes today, they got another thing coming!

    VAN SUSTEREN: So what do you expect that's going to happen from here on and through the election into next year? And let me give you two hypotheticals. One is Governor Romney wins president and the other one is that President Obama is reelected.

    PALIN: Well, if Governor Romney is elected president -- and let's hope that the GOP does take over the White House and can secure the Senate and holds onto the House -- then obviously, first on the list of priorities must be repealing and replacing "ObamaCare" with something that makes more sense.

    You know, get rid ever the tort reform problems that we have, get rid of the anti-competitive problems that we have that are prohibiting people from being out shopping for good health care coverage and prices, all the problems that we talked about that there are common sense, truly sound economic solutions for, well, the Republicans then, and common sense constitutional Democrats, will be able to enact, and that's if Republicans take over the White House and House and Senate.

    Now, if Obama is reelected, well, we will be a fundamentally transformed country, as Obama promised us when he was a candidate, that he was hell-bent on doing to us. We're heading down that road now. This "ObamaCare" mandate, this decision that was made today -- heck, Obama even proposing it and ramming it through and down our throats through Pelosi and Reid's embracing of it -- that's a harbinger of things to come.

    So if Obama is reelected, well, America, you will no longer recognize the country that today you truly love and can enjoy all of its freedom and prosperity and security if Obama is reelected because this "ObamaCare" is a harbinger of things yet to come.

    VAN SUSTEREN: Well, it'll be interesting to see what happens, especially -- I mean, the states have a decision to make right now with the Medicaid expansion, and they need to decide whether they're going to opt in or opt out. Under this decision, they have a chance to opt out, and that's a very sort of pricey matter for the states.

    On the other hand, they're going to have a lot of people who don't have coverage, at least the ones with the large populations that are under certain income level. What -- what do you -- how do you foresee that whole Medicaid expansion thing unfolding?

    PALIN: Many, many states are not going to be able to afford expansion of Medicaid and these exchanges that are going to try to be forced down states' throats through "ObamaCare." I would like to see governors be tough and opt out of this and exert our 10th Amendment rights and tell President Obama, who does not understand the Constitution -- he even being a constitutional lecturer and supposed scholar in our Constitution, not understanding and probably never reading or absorbing the 10th Amendment to understand that states have rights.

    We are sovereign states that can make up our own minds about our budgets and how to prioritize the dollars that we have and the dollars that are shared by the federal government to the states. I'd like to see constitutionally conservative governors opt out of have Obama is going to try to do to the people of America through mandates on top of what the states already have to provide.

    VAN SUSTEREN: Governor, thank you. Nice to see you.

    PALIN: Thank you so much, Greta.