This is a rush transcript from "On the Record," Sept. 29, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tea Party favorite Republican Joe Miller is in a slugfest for a U.S. Senate seat in the state of Alaska against Democrat Scott McAdams and incumbent Senator Lisa Murkowski who is now running as a write-in. Joe Miller joins us live near Washington. Mr. Miller's opponents are welcome any time here "On the Record".

Nice to see you.

SENATE CANDIDATE JOE MILLER, R-ALASKA: Thanks for having me, Greta.

VAN SUSTEREN: Welcome to Washington.

MILLER: It's great being here.

VAN SUSTEREN: So let me talk about the race and go right to the issue

-- unemployment benefits, unconstitutional or not?

MILLER: I think that something best administered at the state level. I think that were you have people closer to the people affected by the decision and leadership, those are the ones who ought to make those decisions.

And frankly I think at the national level, there are too many decisions being made at the federal level, in the case of Alaska obviously thousands of miles away. I think it is important people have betterr esponsiveness, better solutions. Those are created at the state level.

VAN SUSTEREN: When I hear that you -- you get all this chat and I'm never sure what to believe -- when I hear you say unemployment benefits aren't constitutional, you are not opposed to providing benefits to help people, and it's just that you think that statute shouldn't be administered on a federal level that's unconstitutional. Is that right?

MILLER: It is already administered at the state level. I mean, the state is already the entity that provides for those benefits obviously funded through the federal government, but also funded including in that mandates from the federal government. Our perspective is states continue to administer, but they in charge of all aspects of the program. Clearly the money that's provided now through the federal government we prefer to come without mandates.

Clearly we also know because of the deficit situation that our country is faced with those funds are not going to continue at the rate they are now.

I think that when we get to the position where lesser federal funds are being provided that the states are more efficient in providing the reduced amount of funding that is there because they are closer to the problem and they have better solutions for the people.

Unemployment compensation is a little more complex also because you obviously have a contractual component where people are paying into an insurance program expecting something in return. But frankly, I don't think it's the federal government's role.

Again, it is better for the state to be in the driver's seat rather than the federal government, closer to the people affected.

VAN SUSTEREN: What do you make of Senator Murkowski running as a write-in? There's a pretty nasty ad calling her Princess Lisa. Have you seen that?

MILLER: You are probably referring to itsnotyourseatLisa.com, something along those lines.

VAN SUSTEREN: It is pretty ugly, the ad.

MILLER: I think really where we are at in this race are the issues. And what I have in this race are two people, McAdams and the senator, who are looking to the past, which doesn't offer a solution for the future.

We've got a bankrupt federal government that is standing on top of business, not allowing for job creation. It is out perspective that the states are in the best position to provide for those opportunities for people to get jobs.

We've got a broken system. Looking to the federal government to continue to fund and continue provide when it is nearing that position where it is not going to meet its obligations in the future to me is not a good answer. We've to look to the people, we've got to look to private enterprise and get the federal government out of way to put that forward.

VAN SUSTEREN: There's a CNN-"TIME" poll that has you at 38 percent, Senator Murkowski 36 percent, and McAdams way behind at 22 percent. She is inching up on you.

MILLER: I guess it depends on what you're looking at. The Rasmussen poll showed us 42, 27 Murkowski, 25 McAdams. Clearly these polls are being taken with different methods. It's probably somewhere in the middle of those two. But frankly from our perspective it doesn't change the way we are approaching this. For us it's getting the message out, which is jobs for Alaska. Clearly the solution of the federal government continuing to pump money into the state without Alaskans being able to take care of the natural resources that are there is not the answer to job creation.

Job creation has got to be provided through the resource base that we have. That resource base we aren't going to have access to as long as the federal government stays in control of those resources. And so that's the answer for the crisis that Alaska is in. And what the other two candidates is providing is more of the same.

VAN SUSTEREN: Before I came in someone handed me a wire. "Politico" apparently asked you questions tonight at a fundraiser here about personal finance records that the law requires to you file within a certain number of days of announcing your candidacy. You didn't answer it. They were supposed to be filed -- number one, were they supposed to be filed last spring? Is "Politico" right? And number two, did you file? And number three, if you didn't, why not?

MILLER: The simple answer is there was a requirement that we make a filing in May. We just found out about it today. It's a simple solution to get the filing in. It is going to be in by the end of the week.

VAN SUSTEREN: Why do you want this job?

MILLER: This country is in crisis. I got eight kids. My wife is here with us in the studio. We are very concerned about opportunities those children will have in the future, concerned about their liberty they may or may not have we continue done this path that I believe President Obama has taken us. But frankly this is the path that our country has been on for the past several decades, expanding the power of the federal government at the cost of individual liberties, at the cost of state control. And it is not what the founders intended. The founders intended state control, individual liberties. We restrain government to protect those.

And I think Americans are phenomenal people. We have wonderful opportunity. There's still a work ethic here that is second to none. But as long as we a federal government continuing to grow and expand its power, put down private enterprise, put down that spirit of competition and work ethic, we are going to fall from our leading position and not have those opportunities for our kids.

VAN SUSTEREN: Afghanistan, Pakistan -- you served in the Gulf War, a graduate of West Point. It's a nagging problem our country is facing, men and women losing their lives and getting hurt over there. If you are United States senator you have to make decisions whether it is -- making decisions having to do with our war effort. What would you do?

MILLER: It is absolutely critical that we support our men and women in uniform -- absolutely critical.

VAN SUSTEREN: We agree with support. But sometimes supporting them is giving them more money, more troops, bringing them home, sometimes it's political. Is there anything you would you do differently?

MILLER: It is very difficult once you are already committed and on a track. It is a very complex situation. We have kind of engaged in this nation building exercise, which I disagree with. I don't think it is the role of the federal government. I don't think it is within the constitutional intent to go into other countries and decide to impose democracy. That's a choice of a country to make.

But I do absolutely believe that it is a purpose and duty of the federal government to provide for our common defense. And that means zero in on those threats we have to our nation. That means that we have to be more laser-focused on those threats we face without being detracted by this nation building exercise.

VAN SUSTEREN: So what do you do with the men and women in Afghanistan right now?

MILLER: We continue to support them.