This is a rush transcript from "On the Record," December 27, 2012. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Donald Trump says Republicans have a nuclear weapon and they should use it. And that is not all he has to say about the fiscal cliff crisis. Now, we spoke with Donald Trump earlier tonight.
VAN SUSTEREN: Donald, I understand that you say the Republicans are in a stronger position than they realize going into this fiscal cliff debate, or debacle, whatever you want to call it.
DONALD TRUMP, TRUMP ORGANIZATION: Well, I think they're in the strongest position, if they only knew. The debt ceiling is coming up in a very short period of time. Frankly, if you remember, on your show, I said they should not agree to extend the debt ceiling beyond the election.
And when they did that, and as soon as they did that, they lost the election. They would have won the election had it come due before, and they would have won that if they stuck to it, but they didn't do it.
But nevertheless, the debt ceiling has to be agreed to. They have the cards. I just don't think they know it, unfortunately. They should get everything they want based on just the debt ceiling alone.
VAN SUSTEREN: Explain that to me. Suppose that the Republicans dug their heels in the ground and said they refuse to raise the debt ceiling. How would that empower them?
TRUMP: Well, the government, I mean unfortunately, as it almost has anyway, would come to a total standstill. With the debt ceiling coming due in another month from now, they should make that part of the debate. The president is going to have to do something about the debt ceiling. He has always been concerned about it and what is going to happen because obviously they need a lift in the debt ceiling. I always said, and I said it to you, it should not have been allowed to happen after the election. If it happened before the election the Republicans could have won and they would have won, I think.
But the fact they have the debt ceiling coming up, they should put the debt ceiling in with everything else they are negotiating and make an overall deal and don't worry about the fiscal cliff because I believe it's totally overrated.
VAN SUSTEREN: You refer it to it as the fiscal curb. Why do you think the fiscal cliff is overrated?
TRUMP: Because ultimately a deal is going to happen. And if the Republicans are smart, which so far unfortunately it hasn't been working out that way, but if the Republicans are smart they are going to use that and they are going to get every single thing they wanted including a huge reduction in expenditures.
VAN SUSTEREN: Well, the way it seems to be rolling out now is that all our taxes, every single income level is going to go up January 1st if no deal is struck. The Democrats, I assume, intend to paint that as a Republicans have raised all your taxes and blame Republicans. So I don't think the Democrats see this as a win for the Republicans.
TRUMP: No, I think that's right. I think that's fine, and let it happen, because ultimately all of these folks that signed the pledge, and some people that sign a pledge, whether you like the pledge or not, I mean, they sort of feel committed to it. Now the taxes go up for a short period of time and then they give a tax reduction even if that happens to be somewhat more than what they were paying as of last week. So it's going to be a very interesting situation. But a lot of the Republican problem is solved because they are going to be doing a tax reduction as opposed to an increase. You know, the Republicans -- Greta, the Republicans have the cards. I just don't know if they know that.
VAN SUSTEREN: Well, you know what I find rather interesting, for lack of a better word, out this discussion is if we go over the fiscal cliff there will be $1.2 trillion dollars in tax cuts over ten years which is $110 billion every year. So we go for the $110 billion for year one and what happens is next year Congress decides to do what it wants anyway and scraps whatever plan it had in effect for the nine years anyway. So we pretend we have the big 10 year plans but they never turn out to be ten year plans at all.
TRUMP: Well, that's true. But there is something looming in a month and a half and they will have to do something with the debt ceiling. Now, whether debt ceiling should happen, whether or not we should even have something as the debt ceiling, but we do. And the Democrats and the president have to do something about it. They know how strong it is. And the Republicans have a very, very powerful card to get what they want, which is basically a reduction in massive expenditures.
We are up to $17 trillion in debt and something has to be done, and it has to be done quickly. And if it's not done properly -- that's why I hate plan b and plan c and all of these minor plans, these little step plans. They should negotiate a real plan. They shouldn't have the minor plan. They should have the big plan and it should be done now. And you can include the debt ceiling with that because if you do, you are going to get everything you want.
VAN SUSTEREN: You talk about a major plan. Donald, they have no one about, for instance, this fiscal cliff, they have known about it for 18 months. They have done nothing for 18 months.
TRUMP: They have really known about it for 10 years, when you think about it. They have known about it for 10 years. But that is the way government is working.
VAN SUSTEREN: Well, my point is no politician has been tied up in the basement of the capital or White House and said don't do this. They have had plenty of opportunity. You talk about the big plan. Have you seen any appetite for any of these members of Congress or the president or anybody else to really have a big plan that actually fixes the problem?
TRUMP: No, because right now the president doesn't have a big downside but in a month and a half from now he has a huge downside and that comes due with the debt ceiling. And, frankly, you know, when you say they have known about this for a year and a half, they have known about it for 10 years because it was always meant to be. This was going to explode and people were going to negotiate something before it explodes.
But I think it's highly overrated. It's going to happen, and lots of good things can happen if it does explode. And I think people should stop worrying about that. I think they should start worrying about making a great deal, not a small deal but a big deal, an overall deal that's going to get the credit rating of this country back and do lots of other good things.
VAN SUSTEREN: Donald, always nice to talk to you.
TRUMP: Thanks a lot, Greta.