This is a rush transcript from "Your World With Neil Cavuto," May 11, 2010. This copy may not be in its final form and may be updated.
NEIL CAVUTO, ANCHOR: Meanwhile, speaking of those Tea Partiers teeing off on establishment candidates, already toppling a top Republican senator in Utah. My next guest is running against a Tea Party favorite in the Republican Senate race in Kentucky, the primary a week from today.
We had Rand Paul on yesterday, Trey Grayson today.
Trey, good to have you.
TREY GRAYSON R-KY. SENATORIAL CANDIDATE: Thanks. Glad to be with you.
CAVUTO: Do you think that Tea Partiers are dividing conservatives?
GRAYSON: I think the Tea Party movement is — is good for conservatism. It keeps us honest. It keeps us accountable, especially on the spending issue. And I’m really proud of the Tea Party support that I have gotten in my race.
So, I think it’s a very good thing to hold us accountable on the number-one issue, which is getting our fiscal house in order.
CAVUTO: Well, do you worry — and I raised this with your opponent, Rand Paul, that — that it does divide sort of the Democratic strategy of conquer and divide on the Republicans, period?
GRAYSON: Well, I think what we, as a party, have to make sure that we do is we — we nominate the candidates that are not only the ones that most represent the party and its views, but also candidates that, hopefully, are the most electable.
And I think, in many cases, you can find the right middle ground, the sweet spot, if you will, for those candidates that are true conservatives and who are most electable. And I think, in Kentucky, I represent that candidate.
CAVUTO: So, let me ask you this. If there were another financial bailout to pass, to come up to you, and you got in there...
CAVUTO: ...would you reject it?
CAVUTO: Yes, I would.
I — I have — something that I have been loudly and proudly stating throughout this campaign, that I thought the first bailout was a mistake. I’m really worried about this financial reform package that’s been going through, because many of the features seem to institutionalize the notion of a bailout.
CAVUTO: But would there be any conditions...
GRAYSON: And, so, it’s something — yes, I don’t support any more bailouts. We have...
CAVUTO: I’m sorry. But there would be any condition...
GRAYSON: Go ahead.
CAVUTO: ...at which you would entertain one, if we were in the middle of a meltdown or the fear was, if you didn’t, there would be hell to pay?
GRAYSON: I can’t envision one right now, Neil, no.
CAVUTO: What about a country going under?
GRAYSON: Is it the country of the United States of America, or is it Greece? I mean, if it’s — again, I think we — we...
CAVUTO: So, Greece, you would say — so, Greece, you would say no?
GRAYSON: Yes. But I — again, we...
CAVUTO: Spain. Spain. What if it’s Spain?
GRAYSON: The problem is, is that we bail out. We created moral hazard. We created incentives for these bankers and other financial institutions to take risks, where they can profit from the payoff of those risks...
GRAYSON: ...but then they privatize the — the — the pain, you know, if you will, that we the taxpayers then have to pay the burden. And I think it’s a terrible precedent to be set and we shouldn’t do it again.
CAVUTO: I just want to be — I just want to be clear. Are there some countries in your eyes — if not Greece, certainly you would maybe think twice about doing that to the U.S. — that are too important to you to fail? If it were England, if it were Spain, what would you do?
GRAYSON: Well, it’s — as you’re going up the line of gross domestic products — gross domestic products, to bigger countries, you’re talking about countries being too big to fail, that’s a very different notion than the too-big-to-fail, the bailout notion of companies in our economy as a whole.
GRAYSON: You know, I think that there’s the World Bank. There’s the IMF. There’s things like that that are out there...