• With: Rep. Darrell Issa

    This is a rush transcript from "On the Record," January 2, 2013. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: And you just heard from him, Congressman Darrell Issa now warning if Congress doesn't take on spending, the country will go into a downward slide to make us like Greece. Congressman Issa joins us.

    Nice to see you, sir.

    REP. DARRELL ISSA, R-CALIF.: Well, nice to see you, and nice to have you concentrating on what you're best at, which is this waste in government, that over and above all things we argue about, gets slipped into every big bill.

    VAN SUSTEREN: And of course, there was no discussion about waste, I should add, and -- I mean, there's -- the debate on this fiscal cliff has been about spending and revenue, taxes, but I haven't heard anything about waste from anybody!

    ISSA: Well, and Greta, if you had simply taken what shouldn't have been in last night's bill out, you would have at least taken it from the $330 billion net increase in spending down to something closer to neutral, and it might have been more palatable for some Republicans. But it was the best excuse in the world to say, We're for lower taxes, but not if we're simply passing it on to the next generation.

    VAN SUSTEREN: All right, you were just quoted in that video saying that we're on a path to becoming like Greece, Greece, which I might add, has a 26 percent unemployment rate, and if it defaults on its next round, it's going to end up getting kicked out of the eurozone.

    Why do you say we're on the path to Greece?

    ISSA: Well, because the people in Greece continue to reject any kind of real reform because they've been so long denying reality that they think they can do it forever.

    The Americans are not that far from when we had a balanced budget. We're not that far from when we paid for what we consumed. But we've got to get back to it pretty soon because after 12 years, you're beginning to build a generation of citizens and even more, a generation of politicians who think this can go on forever.

    VAN SUSTEREN: What is going to happen with the debt ceiling? I mean, it's sort of -- people didn't really notice, but last week, Secretary -- or Geithner sent a letter to Capitol Hill saying we have hit the fiscal -- the debt ceiling. He can now do some sort of, you know, maneuvering with the money so that we at least have some cash for about two months, but we're about to get -- to run out of cash and we're going to have this big fight over the debt ceiling. What's going to happen?

    ISSA: Well, first of all, Tim Geithner, bless his heart, he's a little disingenuous in one sense. He...

    VAN SUSTEREN: How can you be a little disingenuous?

    ISSA: OK. Here's the -- here's the bottom line...

    VAN SUSTEREN: He's real disingenuous or a little disingenuous?

    ISSA: There's an incredible cash flow that's going to come in because, in fact, people cashed out all kinds of capital gains. Fourth quarter was about a lot of people taking gains on which they're going to pay taxes. And in the first part of this year, the government's going to be flush. And through about April 15th, they're going to have the ability to cash flow.

    So his idea that he can stretch for two months, it's probably more like five. But the real point is, when are we going to say that the budget should be linked to, in fact, the debt ceiling? We put a budget together. We -- whatever amount we say we're going to deficit spend in the budget, we increase the limit and you sign both at the same time because it's one bill.

    I don't believe in playing chicken with, in fact, the debt ceiling if, in fact, we've already appropriated the money and we're simply not allowing it to be spent and borrowed and spent. But I am for saying, You know what? There has to be a once-a-year agreement on the budget. It happens to be the law...

    VAN SUSTEREN: You mean...

    ISSA: ... and it's been ignored.

    VAN SUSTEREN: All right, for better or for worse -- and I've been very hard on Senate Majority Leader Harry Reid -- there has been no budget coming out of the Senate. Now, there's -- the president submitted one to the -- to the Hill, and -- and the Republicans in the House have submitted one. Whether you think those are good budgets or bad budgets, at least they put them on the table for discussion. Senator Harry Reid pocket veto -- he doesn't put one in the game, so there's no discussion about budget -- end of discussion about budget. We have no budget.

    ISSA: Well, you're exactly right. The president has a budget that at best, would never get a vote in the Senate. It's bloated. But you're right, at least...

    VAN SUSTEREN: But at least it puts -- at least his budget -- I mean, his -- even if you hate his budget, it puts the discussion in play. Senator Harry Reid just single-handedly stops it!

    ISSA: Right. He violates the 1974 law. We end up passing -- we didn't just propose a budget, we passed a budget. We send it to the Senate, and it goes nowhere, and then we deem it -- because that's what the act says -- and we begin acting as though we passed the budget that...

    VAN SUSTEREN: (INAUDIBLE) it's a fraud.

    ISSA: Well, it's the best we can do under law.

    VAN SUSTEREN: It's -- yes, but I mean, it's, like, you know, the American people get a little bit -- I would think, a little disenchanted with the fact that all these sort of these games are being played.

    ISSA: Well, one body is doing what they're supposed to do. Not all the time, but in the case of the budget, Paul Ryan did what he was supposed to do. You saw the commercials that came out of his saying, This is what it will take to reduce the deficit...

    VAN SUSTEREN: Well, he -- I...

    ISSA: ... not to eliminate it, to reduce it, and that's what the president campaigned against.

    VAN SUSTEREN: Well, I actually think the president as leader of his party could call Senator Harry Reid and say, Stop playing with this. I think that he could do that, too. So I think the president is somewhat complicit...

    ISSA: He could have kept the pork out of the stimulus, but he didn't.

    VAN SUSTEREN: I think he's complicit in this whole business. All right, so -- so we're going to have this discussion, and the Republicans say that senator -- or Senator McConnell had an op-ed tonight saying that there's going to be no more tax increase, none. You smile. You laugh.

    ISSA: OK. Mitch is a long-time friend. I believe him...

    VAN SUSTEREN: That's usually what you say about something before you...

    (CROSSTALK)

    VAN SUSTEREN: ... slap someone around!

    ISSA: No, he came to see me personally when I ran for the Senate. He was straightforward. He was right. I didn't win that one. But the fact is that where Senator McConnell will say that -- and it's -- and I know he means it, is he doesn't have the votes.