• This is a rush transcript from "On the Record," August 22, 2012. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: Senator Ted Cruz is here. He's leading the charge to defund ObamaCare at all costs, even if it triggers a government shutdown and alienates some fellow Republicans.

    (BEGIN VIDEO CLIP)

    SEN. TED CRUZ, R-TEXAS: Now is the single best time we have to defund ObamaCare.

    (APPLAUSE)

    CRUZ: ObamaCare is the number one job killer in America. It is killing jobs. It is causing more and more people not to be hired. It is causing health insurance premiums to skyrocket.

    Can we bring back jobs?

    CROWD: Yes, we can!

    CRUZ: Can we stop the IRS?

    CROWD: Yes, we can!

    CRUZ: Can we mobilize grassroots America?

    CROWD: Yes, we can!

    CRUZ: And can we defund ObamaCare?

    CROWD: Yes, we can!

    (END VIDEO CLIP)

    VAN SUSTEREN: Senator Ted Cruz joins us. Good evening, sir.

    CRUZ: Good evening, Greta. It's always good to be with you.

    VAN SUSTEREN: Nice to have you, sir. I know you've been traveling around doing town hall meetings about ObamaCare and defunding it. I'm curious how big the crowd are, and if you can quantify the level of passion, are people angry or not angry?

    CRUZ: Well, I'll tell you, the reaction has been electric. The footage there was from Dallas two nights ago. We had over 2,000 people there. And the energy and passion, I think among the American people that they understand that ObamaCare isn't working, that the wheels are falling off.

    We just learned this week that more and more companies are now dropping spousal coverage. So UPS sent a letter to 18,000 employees informing them that their husbands and wives would no longer be covered by their health insurance. And of course, we all know President Obama promised the American people if you like your health insurance you can keep it, and yet every day that's proving less and less true. And I think the American people are ready to stop this, to stop the biggest job killer we've got in our economy.

    VAN SUSTEREN: As I understand it, correct me if I'm wrong, the way that you seek to do it is by -- we're coming up against the end of the continuing resolution on the end of September and another -- we have to figure out what to do, whether have another continuing resolution or budget. A budget is not going to happen. So we're talking about continuing resolution. Your idea is to oppose in the house and the Senate but you're the minority of course in the Senate, anything in a continuing resolution that funds Obamacare? Is that correct?

    CRUZ: Well, what I think should happen is I think the House should pass a continuing resolution that funds the entirety of the federal government, every bit of it, except for ObamaCare, and that explicitly prohibits spending any money, mandatory or discretionary, on ObamaCare.

    Now, the next step we know what will happen. We've seen this really before. President Obama and Harry Reid will scream and yell why are the mean, nasty Republicans threatening to shut down the government? And at that point, Greta, we've got to do something that conservatives haven't done in a long time. We've got to stand up and win the argument. We've got to stand up and say, no, we have voted to fund the government. We want to fund the government. We don't want to shut down the government. Why is President Obama threatening to shut down the government?

    President Obama has already granted waivers to giant corporations. Why is President Obama threatening to shut down the government in order to deny those same waivers to hard-working American families? I think that's an argument we can win if only Republicans can find the courage to stand up, to stand together and make it.

    VAN SUSTEREN: All right, now, as this unfolds as you say, if we do go into a shutdown we'll see the Republicans say it's the Democrats' fault, the Democrats say the Republicans. Let's say hypothetically we go into a shutdown government. Tell me how does it affect every American? How would we feel at shutdown?

    CRUZ: Greta, we've seen partial temporary shutdowns before. We saw it in 1995. In 1995 the military continued to be paid. Medicare continued, Social Security continued. Medicaid continued, interest on the debt continued to be paid. What we saw in '95 was a partial temporary suspension of nonessential government functions.

    But in my view, we shouldn't shut down the government. We should stand strong and say ObamaCare isn't working. It's failing. There's bipartisan agreement. And so we're not going to fund ObamaCare. And if President Obama chooses to force a shutdown, a partial, temporary shutdown, then we have to stand together and turn up the heat until the Democrats listen to the American people.

    VAN SUSTEREN: All right, when I was a kid we used to call that game of chicken to see who blinks first which is where it may get to. But tonight I'm reading "National Review" online that Speaker Boehner convened a conference call of his house Republicans and that what he is thinking about doing is a short-term continuing resolution which maintains the current sequester spending levels, not defunding ObamaCare. That's in the House. How would that affect your strategy?

    CRUZ: You know, Greta, if the forum that we have to convince people of on defunding ObamaCare is Washington, D.C., is the closed, smoky rooms of Washington, D.C., we can't win this fight. I can't win this fight. Mike Lee can't win this fight. No Washington politician can win this fight.

    That's why I'm not trying to make the case in Washington, D.C. I'm trying to make the case to the American people, because I think there's a new paradigm of politics where the American people are rising up. Just a few weeks ago a national website launched Dontfundit.com. In just a few weeks, nearly half a million Americans have signed that website. If we can see between now and September 30th millions of Americans come together, sign the petition at Dontfundit.com, call their senators, call their representatives. That's how we get this done. It has to come from the people. It won't come from Washington.

    And Greta, I think the American people should hold every elected official accountable, including me. And that's the only way we can get this done.

    VAN SUSTEREN: Well, it's interesting 80 out of 233 Republican house members are urging the speaker to defund ObamaCare. That's in a letter on yesterday. But the truth is that like these decisions are not generally made by the people but by your representatives. So you really have a hard road to hoe in terms of getting this if you're expecting the people to do this.

    CRUZ: Well, the momentum is going in the right direction. So that's over 80. It used to be 60 in the House. So we're seeing the numbers increase. Just today we had another senator join with us in terms of the commitment not to vote for any continuing resolution that funds ObamaCare.

    And it's driven by the people. Look, the traditional Washington way of decision making doesn't work. I mean, it's what's produced $17 trillion in national debt. You don't get that without a whole lot of bipartisan cooperation. And the frustration the American people feel is that our elected leaders aren't listening to us.

    ObamaCare is the biggest job killer in the country. Just yesterday I sat down at a round table in Kerrville, Texas, with 20 small business owners. I asked them all, what are the challenges you're facing? Over half of the small business owners said the biggest impediment they are facing to growth and jobs is ObamaCare. They talked about -- go ahead, Greta.

    VAN SUSTEREN: I was just going to -- sorry we ran out of time. I want to do one last thing. I want to turn a slight corner this. This happens to be a rather significant week in the Cruz family. And in fact, we have a new member joining the education. I thought that I'd put this picture up for viewers to see. Since you tweeted it and I always like to throw it out if I can, what's this all about?

    CRUZ: Well, Tuesday was our oldest daughter Caroline's first day of kindergarten. I'll tell you she was thrilled and Heidi and I are thrilled, too. She spent most of the summer sleeping in and relaxing and playing with friends. Tuesday morning she jumped out of bed early, got dressed, ate breakfast, and was beyond thrilled to enter the exciting new world of kindergarten. And we're all really happy about it.

    VAN SUSTEREN: All right, well, don't tell her about junior high or high school which may not be quite so much fun. Senator, thank you, sir. Thank you for joining us.

    CRUZ: Thank you, Greta.