This is a rush transcript from "On the Record," May 23, 2013. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: News tonight: Lois Lerner placed on paid administrative leave.
Former Speaker of the House Newt Gingrich joins us. Nice to see you, Mr. Speaker.
NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: Good to be here.
VAN SUSTEREN: OK, how does this happen, that the IRS targets different groups? What's your theory of why this happened?
GINGRICH: Well, there was a survey done back in 1991 in which three out of four IRS agents told the people doing the survey they thought they had the right to lie to Congress.
What you have is a gigantic government largely populated by people who are ideologically liberal -- look at the donation pattern of the IRS employees -- who believe they are superior to the American people, that we are subjects and they're in charge. You have a president who is a very weak administrator, great on oratory, terrible at managing.
And you have a system run amok, and it's run amok across the board. It's run amok at EPA. It's run amok at Fish and Wildlife. It's run amok at the Department of the Interior. It's run amok in the Justice Department.
But you're a normal American. You go to work. You pay your taxes. First of all, wouldn't you love the idea you can put on your return 5th Amendment. I'm not going to give you any details about my income or my taxes. I'm pleading the 5th.
And second, that if you do do something wrong, you could call the IRS and say, I'd like to apologize now. But look what's happened to Lois Lerner. She's put on administrative leave with pay. Now, why is this a terrible punishment?
VAN SUSTEREN: Well, according to Senator Grassley tonight -- and one of my colleagues tweeted, Chad Pergram -- is that the acting commissioner asked her to resign and she did not, so she was put on administrative...
VAN SUSTEREN: I suspect that's a civil service -- what -- I suspect that's the process. I don't know, that we don't...
GINGRICH: It is the process.
VAN SUSTEREN: Can you -- can you fire her?
GINGRICH: It's the process, which is why you have a Congress which ought to fundamentally overhaul the whole system.
VAN SUSTEREN: Well, yes, but...
GINGRICH: It's not just her. How many different people now have their hands on having fundamentally violated the legitimacy of our tax system? Every one of those people should be fired. And the idea that the union representative who, by the way, met with President Obama -- the union representative for IRS workers plays a major role in dealing with disciplinary problems. This is just the opposite of responsible self-government!
VAN SUSTEREN: Is this new?
VAN SUSTEREN: I mean, so -- so though -- so do we drop this in the lap of President Obama and say, as -- you say he's a weak manager? So can he be blamed for this?
GINGRICH: No. And in fact, I hope we don't blame him. This is -- this is not an Obama scandal. And it's a point that was made very brilliantly in a column in The Washington Post by a foreign policy expert, who said what's really frightening about the Benghazi mess is watching the bureaucracy, as we get all these e-mails, we get all these conversations. What you see is a level of incompetence in our national security system. When you look at Fast and Furious in the Justice Department, you see a level of incompetence.
VAN SUSTEREN: Well, let me bring that over to Congress, then. You talk about Fast and Furious. You talk about this, is that all these areas, the IRS, both Fast and Furious, there is congressional supposedly oversight.
VAN SUSTEREN: The only time we hear about Congress in it is when there is some huge event, and then they come in and they investigate. Congress really does not do -- I would not give them an A in oversight because we'd catch these things a lot sooner.
GINGRICH: Look, it's also a failure of, I think, imagination. The civil service model we currently have dates back to the 1880s. It is 130 years old! And it's broken. It's broken in every department of the federal government.
Now -- and that includes the Pentagon. Now, what somebody should introduce is, you know, a smaller, manageable government act that would start with eliminating all of this massive security. These people are breaking the law, willfully breaking the law, arrogantly -- I mean, if you watched the attorney general the other day testifying to the Congress, he had the arrogance you'd expect, you know, from a duke or an earl in the aristocratic era. He did not have the attitude of a public servant.
VAN SUSTEREN: The president says that he didn't learn about this until about last week, with newspaper reports. Is that -- is that a problem? Does that show that he -- I mean, is that a -- was -- was the White House counsel and the aides and everybody else who apparently did know about it - - were they right in not telling him?
GINGRICH: Well, first of all, let's go back just for a second to Benghazi, where I saw one reference this week -- and you're an attorney and I'm not, but that the White House counsel apparently in October said, We had better slow down what we're saying because of the legal implications. You just had somebody go to the Congress and say, My lawyer told me I better plead the 5th because of the legal implications.
I think these folks are in so much trouble on so many fronts. And as you know, what always happens in Washington is the cover-up is worse than the event. And they have been lying to the Congress -- on every single one of these fronts, they've been lying to the Congress.
VAN SUSTEREN: But there are no consequences. I mean, if, indeed, you're right that they are lying -- and I have to tell you, there are some funny things said and we -- and as Speaker Boehner said, "Drip, drip, drip, drip, drip." I don't know why, when you ask for emails last November and they claim national security, you don't get them for six months, and when you finally get them, they certainly are not national security. They shouldn't have been classified. I mean, that happens (INAUDIBLE) Washington, drip, drip, drip, drip, drip, and everything gets hidden by national security classifications.
GINGRICH: Well, what the country should demand is very dramatic overhaul. Don't focus on one or two people. Don't focus on President Obama. Understand this is a system of big government run amok. It is very dangerous to your life.
I mean, the idea that the IRS is going to manage your health care, that they're going to have the ability to have insight into all of your records...
VAN SUSTEREN: Do you believe -- I mean, that -- that brings another issue because one of the women whose name has been brought up in this targeting of conservative groups and Tea Party groups is a woman who's going -- or who's at the IRS who's going to be handling the "Obama care."
GINGRICH: Look, I think they should move Congressman Tom Price's bill that would strip everything involving ObamaCare out of the IRS. I suspect it would pass the House in a huge margin, and I suspect it would pass the Senate because there are 14 Democrats from states Mitt Romney carried, and they can't vote to defend the IRS and go on and get reelected.
VAN SUSTEREN: And I know you weren't there, it's not your fault, but I mean, to put anything in the IRS like ObamaCare if you're trying to impress the American people, to put it in one of the most hated organizations, long before this scandal -- that was just stupid to begin with.
GINGRICH: Well, I think -- I think if you are a true blue liberal, you believe in government.
VAN SUSTEREN: ... Nobody -- I mean, look, I don't care liberal or Democrat, nobody likes that -- that -- you know, the notice from the IRS that, We're auditing you.