This is a rush transcript from "On the Record," November 26, 2012. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Brace yourself! Senator Rand Paul predicting something really big and ugly is going to happen. What is he talking about? We spoke to Senator Rand Paul a short time ago.
VAN SUSTEREN: Senator, nice to see you, sir.
SEN. RAND PAUL, R-KY: Good to be with you.
VAN SUSTEREN: Have you heard Senator Harry Reid or any other Democratic senator suggest any cuts?
PAUL: No, and that's a real problem. I hear all these Republicans saying, Oh, we're going to raise taxes now, we're going to go back on our pledge, but I haven't heard any concrete proposals for cutting.
Also don't think we ought to have to trade tax increases for someone to address entitlements. We're all Americans. The entitlement programs are broken. Why don't we just fix them instead of saying, Oh, we have to give you a tax increase in order for you to think about fixing the entitlements? Doesn't make any sense to me.
VAN SUSTEREN: So what's going to happen?
PAUL: I think there'll be something really big, some enormous, ugly bill with a lot of stuff in it, including raising the debt ceiling by a couple trillion dollars. They'll squish it into one bill. And sometime before Christmas, they'll pass it.
But I'm not going to vote to raise taxes. I made a pledge to the people of Kentucky that I'm not raising taxes. I took a pledge. I signed a statement, an oath that I wouldn't raise taxes, and I'm going adhere to it.
VAN SUSTEREN: So what are you willing to do? I mean, are there some sort of discussion about, like, closing loopholes and doing stuff like that to increase revenue. Are you willing to do that?
PAUL: I'm all for reforming the tax code, but it would have to be at the very best revenue-neutral. I don't want to raise revenue through the taxes. The only way I'd raise revenue through taxes is get the economy to grow. You don't have to raise rates or even close loopholes. If your economy was growing -- you know, when the economy was growing for four years after the Bush tax cuts, we had plenty of revenue. Revenue went down when the recession came.
The reason we have a lack of revenue in Washington is too much spending and no economic growth. So we don't have economic growth. If the economy were growing at 4 percent right now, we'd have plenty of revenue. But you don't get the economy to grow by raising taxes. That's what they want to do now, and I think it's absolutely the wrong thing to do.
VAN SUSTEREN: Why do you think -- it certainly appears this way to the American people -- that the president, the leadership in the House and the Senate, can't seem to sort of sit down and work together? I mean, it is now December. We knew about this problem with the fiscal cliff since last July, August of 2011, and here we are on the eve of the -- of going off the cliff.
PAUL: I think part of the problem is -- see, I still disagree with the fundamentals of what people are calling the fiscal cliff. Is the fiscal cliff cutting spending? The sequester? Well, I think cutting spending's a good idea, so I don't think that's a bad idea at all and I don't think it will lead to economic harm to cut spending. That's what we should be doing.
The other half of the fiscal cliff is that taxes will go up. Well, I don't want taxes to go up. So why would I want them to go up on only half of the nation's income? If you raise taxes on the top 1 percent, that's 50 percent of the nation's income. If you don't think raising taxes in a recession is a good idea, why would it be a good idea to raise them on anyone?
VAN SUSTEREN: So do you think going off the fiscal cliff would necessarily be a bad thing?
PAUL: I think it would be a bad thing to raise taxes, but a good thing to lower spending. So I think you have two competing influences in what people are calling the fiscal cliff. That's why it doesn't make a whole lot of sense to me.
I don't accept that cutting spending is bad for the economy. I think cutting federal spending, which means less borrowing up here, is good for the economy. But I do think taxes going up is a bad thing for the economy. So I agree with half of the equation of the fiscal cliff, but then I don't agree that if taxes going up is bad for the economy, why would we only want half of the taxes to go up?
VAN SUSTEREN: Well, that's sort of a little bit like the reverse of the Democrats. I think Senator Harry Reid thinks it's a good thing that taxes go up. He's thinks it's a bad thing that spending would go...
VAN SUSTEREN: So I mean, you're sort of the reverse.
PAUL: Yes, so you can see why we're at somewhat of at an impasse. We have different philosophies about government. I think you should balance budgets, not spend more than comes in, and I think you should lower taxes, not raise taxes. In fact, if you want to stimulate the economy, I'm for cutting tax revenues. All these Republicans who want to give up their taxpayer pledge and raise taxes, I'm the opposite. I want to lower taxes because that's how we'd get actually more economic growth and maybe more revenue, if you cut tax rates.
VAN SUSTEREN: All right, it's only a month past the election, but I know -- but you know, we -- we have -- the media. We're always are sort of curious. Are you considering or would you think of running for president?
PAUL: Well, you know, I think it's too early to tell. We've got a lot of things we have to do in the next couple of years. I still want to try to fix some of the programs we have. I'd like to save Social Security by reforming it. Same with Medicare. I have bills that do both.
I think we as Republicans have to start talking about how we, as a party, become a bigger party. We have to attract more people. We have a lot of work to do in the African-American community. We have a lot of work to do in the Hispanic community.
And so I will talk about these things and I want to be part of the national debate. And you know, I've said I won't deny that I'm interested in maybe running for president, but it's way too early to really make a firm commitment on, you know, whether I would or wouldn't.
VAN SUSTEREN: Will your father help you, I suppose?
PAUL: I think I can count on him.
VAN SUSTEREN: You think. ... Thank you, sir. Nice to see you.
PAUL: Thank you.