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    (BEGIN VIDEOTAPE)

    VAN SUSTEREN: The overriding theme I get from your book, the fancy word is "federalism." It's how much the states do and how much the feds do. The overall theme I draw from it is you want the feds to get off your back.

    PERRY: Our founding fathers never meant for the federal government to be for all the decision making. As a matter of fact, in Madison's 45th Federalist Papers, he talks about the powers of the federal government are limited.

    And the states are not, and very undefined and indefinite. And that is the beauty of the 10th Amendment. It clearly states the federal government was created by states to be an agent for the states, not the other way around. We got it just backwards.

    And it started a century ago wet progressives passed the 16th Amendment to get the income tax, and obviously the New Deal and the Great Society. And now Obama seems to be taking it to new lengths with Obamacare. Americans understand that the states are where the laboratory of innovation, states should be out competing.

    And that's what this book is really about. It's about freedom. That's what "Fed Up" is really all about.

    VAN SUSTEREN: There's some vignettes in here, and there's one in particular that struck me, and it's a member of your party, former speaker Hastert, and it says that even though he's not a member of Congress right now, he is out lobbying according to you for corporations and foreign government, and that we taxpayers are paying $40,000 every month for an SUV, for cell phones. It may not seem like a lot of money --

    PERRY: It's the point --

    VAN SUSTEREN: It is a lot to someone in my hometown trying to make it through the year.

    PERRY: You take the cost of a presidential trip, this trip the president has taken to India, just the monstrous cost of that, versus $40,000. It is the point, it is the principle --

    VAN SUSTEREN: Why are we paying that? I understand for a president trying to develop trade with one of our greatest allies. I'm all for that, and he needs security to protect the president. But how many of these little sort of $40,000 a month --

    PERRY: Good question, and it is one of the things that I -- this Republican controlled House of Representatives has to clean that type of nonsense up. They must stop that type of obvious frivolous spending on individuals who are getting perks they didn't earn and they don't deserve.

    VAN SUSTEREN: Is he really a lobbyist for foreign governments and for corporations?

    PERRY: Indeed.

    VAN SUSTEREN: That struck me as horrifying.

    PERRY: There's a number of things in that book that will strike Americans as horrifying. And we must, as a people, get put back in the box. Get this government back to the limited form that our founding fathers sought.

    Let the states, whether it is how to run Medicaid, how to run the pensions. The state of Texas back in 1982, we had two counties that opted out, three counties, of Social Security. I can promise you they are very happy today. They have well funded pension programs and they are going to take care of their people in the future.

    You can't say that for Social Security. It is indeed a Ponzi scheme.

    VAN SUSTEREN: Health care, there's going to be a lot of challenges in the next two years. What is your view of the health care program?

    PERRY: I'd like to see states be given the opportunity to opt-out of the Medicaid program that we are looking at today. We think in Texas over the next six years that we could take and find a private insurance solution and better serve our people, put more people under coverage, and save $40 billion for the state of Texas and $40 billion for the federal government because it is a matching program.

    VAN SUSTEREN: If you are opposed to that, is there any way you could ever support Governor Mitt Romney in light of the fact that the Massachusetts health care program is so similar to the national health care?

    PERRY: I think it's a problem to go -- if he were to stand up and say, you know what, this was a program that didn't work and I wish I hadn't tried it, I think that would help him. But the fact is they are so similar that it is going to be a major anchor unless he stands up and repudiates that approach.

    VAN SUSTEREN: In terms of 2012, people have tossed your name in. You say in the book you have no interest. Is that true?

    PERRY: Yes. I'm not interested in being president of the United States. As a matter of fact, I hope someone would stand up and say elect me president of the United States, and I will go to Washington and try to make it as inconsequential in your life as I can make it.

    And really respect the constitution and the 10th Amendment and let these states compete. That I suggest would be a powerful message. And it will also let this country become a very powerful economic force once again in the world.

    VAN SUSTEREN: The Tea Party movement, is that growing in strength going or sustain itself as is, or are we going to see it diminish?

    PERRY: I give them great credit for getting people back to reading the constitution. More Americans picked up a copy of the constitution and read it in the last 18 months than probably did in the last 50 years. And for that single thing I'm greatly appreciative of the Tea Party.

    I think there are going to continue to stay engaged. I think there was a lot of passion and a good feeling out there from the candidates they recruited, the candidates they supported, and frankly the number of people that saluted the Tea Party and paid homage to them. That's good politics and, frankly, it is good policy.

    VAN SUSTEREN: Speaking of salute, last time I saw you in person was during Katrina. I have to tell you, Houston was extraordinary. Many parts of Texas -- but I've never seen a community so quickly embrace people so efficiently, and it was absolutely extraordinary watching Houston respond to that crisis.

    PERRY: Robert Eccles, who was the county judge, did a fabulous job of coordinating Houston. We got a great emergency management team. And it is the state and locals. And we get better after every -- you know, god bless us, we didn't have a hurricane this year of note, and hopefully we will dodge them in the future.

    But we got some of the finest men and women in our emergency management in those cities. And the private sector is such an important part too, whether HEB or our great fuel companies that come in. I mean, clearly, the feds could learn something from the state of Texas about how to deal with disasters.

    VAN SUSTEREN: The response in terms of across the board, public and private, and the level of efficiency was absolutely mind-boggling.

    PERRY: Good-hearted people in Texas.

    VAN SUSTEREN: You know what the Alaskans say about you?

    PERRY: I know what Sarah says about us. She says that big picture of Alaska with Texas in the middle, and she has a t-shirt that says "Size matters."

    (LAUGHTER)

    VAN SUSTEREN: I was going to tell a different one. I was up in Alaska they said you put an Alaskan in the middle of Texas and he or she feels claustrophobic.

    PERRY: We have a lot of fun.

    Competition between the states, that's what it's all about. Whether we are making fun of each other or trying to steal each other's jobs, that's really what "Fed Up" at its heart is about, freedom and competition.