• With: Sen. Rand Paul, R-Ky.

    This is a rush transcript from "Your World," June 6, 2012. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST OF "YOUR WORLD": Welcome, everybody. I am Neil Cavuto.

    And are there any bridges to Madison in this country, because despite Wisconsin voters' clear preference to rein in spending there, talk of more spending here, which got investors buying like crazy here, which is really nutty when you consider the capitalist crowd rails against big spending anywhere, that is, unless it benefits them. And apparently they think the Central Bank's spending hundreds of millions of more dollars to bolster the world economy will do just that.

    Now, never mind the lessons from Wisconsin, where austerity rules and it's the big spenders who now drool. It';s as if that almost never happened, certainly not in Washington, where far from cutting back, they're talking about piling on with a whopping $50 billion transportation bill that is set for a big vote tomorrow and a $6 billion student loan bill maybe as soon as next week.

    Talk about weird timing.

    Kentucky Republican Senator Rand Paul says talk about just bad timing.

    Senator, good to have you.

    SEN. RAND PAUL. R-KY.: Good to have you, Neil.

    CAVUTO: We all like to see a market moving north, Senator. And for whatever reason, I guess people will rejoice. I'm going to get into that with my buddy Charles Payne.

    But I've got to ask you about Washington continuing to double up on the spending, even in the face of what happened in Wisconsin last night, as if it didn't even occur.

    PAUL: Well, I think they need to understand really what happened and the moral of the message there.

    The message is that you can stand on principle for something that takes some courage to stand for and you can get reelected. All along up here, they think you have to be weak-kneed and have no spine and you have to give people money whether you've got it or not. But I think you can stand up and say, look, the emperor has no clothes, we're out of money, and we're going to have conserve money. And you can get reelected. But that message hasn't completely soaked in here in Washington.

    CAVUTO: Well, I would've allowed it for not soaking by in after 48 hours. I don't know about, I don't know, maybe 18 hours.

    And that's what's so weird, Senator, because if anything came resonating through Wisconsin when I was there, a couple of things. People can honk their car horns very eloquently.

    (LAUGHTER)

    CAVUTO: But the other thing is that obviously, by wide margins, Wisconsinites said, no, stop it. Gravy train, stop.

    Why not Washington?

    PAUL: And also that I think that voters are smarter than people give them credit for, because this wasn't just saying, oh, let's be mean to union workers. This was saying that we're spending too much on benefits and that government workers have benefits that are disproportionate to private workers and we can't afford to do it.

    And this is going to be duplicated in state after state after state. Wisconsin's the beginning, the tip of the iceberg. You're going to have Illinois. You're going to have California. It is happening in my state. We can't afford the pensions we have promised all the government workers. And so we've been saying for years now, at least the new hires, give them 401(k)'s and not government-guaranteed pensions, and we have not been able to get that through in my state, but it's going to happen.

    CAVUTO: The argument for what Scott Walker did last night and pulled off in Wisconsin to avoid being the first governor called in a recall election and surviving it, is that people have had it with the spending.

    You had Joe Biden today talking about the need for more spending, railing against the likes of Paul Ryan, also a Wisconsinite, that he has called for too much cutting, when as you've indicated, and you are of supportive a lot of what the congressman wants to do, you argue he hasn't gone far enough with the cuts.

    Yet that's looked at with disdain. So where are we going here?

    PAUL: Well, see, the thing is, is that I think people up here need to be convinced that you can stand for something which is conserving or balancing the budget and be elected.

    I ran on the principle that Social Security is $6 trillion short of money. We can't afford all the baby boomers. And we're going to have to gradually raise the age of eligibility, which isn't, you wouldn't think, a real popular thing, but I won by 12 points.

    So I think you can be honest and people are ready for politicians who won't pander, who won't just tell you what you want to hear, but will be honest. And I hope that's the message people get from Scott Walker, is let's actually fix these problems that maybe our unpopularity or the low approval ratings of Congress are because we do not stand for something, not because we're actually too principled. It's because we lack principle. That's why our standing is so low.

    CAVUTO: Senator, I had the privilege of talking to your dad last night while these results were coming in from Wisconsin during our live coverage on Fox Business Network.

    As you probably know, Senator, we are on at 8 p.m. live against Bill O'Reilly, but I digress.

    Anyway, one of the things he said that was kind of interesting was that he could see under governors bravely mirroring what's going on here. He is not so sure about Washington, and which is I think a little bit of your point. Why does that have to be the case? Why can governors then be bold and not our senators and congressmen and to that extent our presidents?

    PAUL: Some of it's because states do not have printing presses.

    We put off things up here because we can run massive deficits for decade upon decade. Now, there are ramifications, and we're getting ready I think to experience that as a country running such massive deficits. But the state of Kentucky can't run, you know, a $1 trillion deficit. They can borrow money, but there are limits to that. Same with Illinois. Same with California.

    They're up against I think their borrowing limits and so their governors will have to make decisions, so you'll always get a little bit better or more acute decisions at the state level than the federal level because we can put it off by printing more money to pay for our debt.

    CAVUTO: If I can look a little ahead to this summer and the Republican Convention, I guess your father has technically suspended the campaign, but not stopped it. He's still an active candidate, whatever that language is.

    But do you know what he will be doing at the convention, what he's been promised and whether you are going to have a role, any of that?

    PAUL: You know, I don't know and nothing has been explicitly stated to me or to him that I know of.

    I know that they have several hundred delegates. And I know that part of the hope is that they'll have influence in creating what the Republican Party becomes, what the platform is, and also what it becomes from here on out. Exciting things are is that the chairman of the Iowa party was a Ron Paul supporter, the chairman of the Nevada party was a Ron Paul supporter. Maine, they won the vast majority of delegates. And the national -- interestingly, the national committeewoman from Maine is a 21-year-old girl who supported Ron Paul.

    So, I think the Republican Party ought to be excited with all these new people they're bringing in. If they can figure out how to bring in and embrace those people, I think it makes the party bigger and stronger.

    CAVUTO: All right, Rand Paul, always good seeing you. Thank you very much -- Senator Rand Paul.

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