• This is a rush transcript from "On the Record," July 27, 2011. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: We also spoke with Kentucky Senator Rand Paul.

    (BEGIN VIDEOTAPE)

    VAN SUSTEREN: Senator, nice to see you, sir.

    SEN. RAND PAUL, R-KY: Good to be with you.

    VAN SUSTEREN: If the Boehner bill as we understand it makes to the Senate, would you vote yes or no?

    SEN. RAND PAUL: I can't vote for any plan that doesn't balance, ever.

    VAN SUSTEREN: No balanced budget amendment?

    SEN. RAND PAUL: No, that doesn't balance. His plan will never balance. In 10, 20 years, there isn't a significant change in policy that will ever balance the budget. So I can't vote for any plan that doesn't balance.

    The Boehner plan also will add $1 trillion to the debt over 10 years. Albeit that's $1 trillion less than the CBO baseline, but it's still $7 trillion of additional debt. Every year under the Boehner plan, we will pen more and borrow more and the debt -- we will spend more and borrow more and the debt will grow. Boehner plan in 10 years, will be 21 trillion. It is too much. It doesn't change the trajectory we are on.

    VAN SUSTEREN: I guess you don't like the Senator Reid plan coming out of this Senate?

    SEN. RAND PAUL: My litmus test for raising the debt ceiling, one, we have to significantly change what we are doing. I don't think we are to be trusted with more money. Somebody who spends unwisely shouldn't be given more money. And so we shouldn't raise the debt ceiling unless we have a plan that balances our budget.

    And think how reasonable this is. The balanced budget amendment allows five years to balance. If we pass it would it take two to three years to pass the states. We are talking about eight years to balance the budget, and that's unreasonable? The president needs to explain to the American public why he's against balancing the budget.

    VAN SUSTEREN: Senator McCain has blasted the Tea Party and I guess blasted you by inference as being part of the Tea Party. I think they are saying maybe you are impractical, that we are down to the line, because the deadline is rapidly approaching. Are you a spoiler in the sense it might make sense to work something out in the short run?

    SEN. RAND PAUL: Actually we have been. The Tea Party conservatives in the Senate and in the House really, against leadership advice, got "cut, cap and balance" going through, and we passed it through the House against great odds. We showed we were willing to raise the debt ceiling under certain conditions.

    I think what is impractical is a trillion and a half new debt every year. If interest rates rise by one point that adds another $1 trillion in interest payments over 10 years. If they go back to s we are going to be at trillions in interest payments.

    VAN SUSTEREN: If you don't have the numbers to win in the U.S. Senate, you are going to walk away with zilch, other than principal, and you met obligations to your constituents, because that's what you ran on.

    SEN. RAND PAUL: Right. I think that is important.

    VAN SUSTEREN: I'm not denying that.

    SEN. RAND PAUL: I would say what is also important is we change the trajectory. If I have to go home to Kentucky and tell voters that the debt is going up by $7 trillion and I voted for it that will be an ultimate failure. And if I go home and say think that fought the good fight and I said no we shouldn't increase the debt by $7 trillion over the next 10 years, I think I will be applauded for that.

    And the thing is I think the country is headed not for a crisis on August 2nd but it's headed debt crisis in the ensuing months and maybe years. That debt crisis is from spending too much. We have to rein it in. The entitlements are broken. The way we fix it is by balancing the budget by doing something that every American family has to do and I think every American family expects us to do.

    VAN SUSTEREN: What can the president do to show to your satisfaction that he's leading on this issue?

    SEN. RAND PAUL: Well, the first thing, if the president were true leader he would take default off the take. It shouldn't even be considered. It is really an obligation, a constitutional obligation to pay for your debt, to pay the interest on your debt.

    VAN SUSTEREN: How do you take that off?

    SEN. RAND PAUL: It is interesting that we actually do. We bring in $200 billion a month in tax revenue. Our interest payment is 20 billion. We have more than enough that comes every month in tax revenue to pay the interest on our debt. We can't pay for everything. We can pay for Social Security. He should quit scaring seniors. And we can pay for our soldiers' salaries. And we can pay for another $70 billion or $80 billion worth of government.

    But he could take default off the table then this wouldn't be such a crisis situation. He's manufactured a crisis, and if we don't have an arrangement by August 2nd, and there is a dip in the stock market, the blame lies squarely on his shoulders for allowing this crisis to happen and actually encouraging this crisis.

    VAN SUSTEREN: Senator, thank you, sir.

    SEN. RAND PAUL: Thank you.

    (END VIDEOTAPE)