This is a rush transcript from "Special Report," February 21, 2013. This copy may not be in its final form and may be updated. Watch the latest video at FoxNews.com NEIL CAVUTO, HOST: It is amazing, don't you think, Allen? I mean, come on. ALLEN WEST, R - FORMER U.S. CONGRESSMAN: Yeah. Neil, it's great to be with you. And it is absolutely amazing. I think what you see coming out of Washington, D.C., and especially from President Obama, is a very schizophrenic political game, because if you go back and you understand that this whole idea about sequester came from the White House, and we know that for a fact according to the press secretary, according to Senator Max Baucus and also Bob Woodward, and then of course in 2011 the president stood and said that if everyone tried to avert the sequester, he would veto any plan to do that. Then you come back during the final debate in Boca Raton of 2012 and he said that the sequester would not happen. And now all of a sudden he comes back from playing golf with Tiger Woods on Tuesday morning, he has this conference and he starts with the fear-mongering and the threats. It's very simple, Neil. There are two pieces of legislation that would replace the sequester with very real spending cuts that we passed last year in the House of Representatives, HR-5652 and HR-6684. But you also talk about something that we all must realize. Until we move away from this baseline budgeting system where we continue to have an increase and basically we're talking about cutting the increase, we're never get to what the real problem is here in Washington, D.C. CAVUTO: But, you know Allen, when I looked at what the Republican strategy was on this, to sort of just sit this out, wait the president out, go ahead and continue with their vacation as planned, obviously they're thinking that he has more to lose on this than they do and that by not entertaining tax increases at all, since they swallowed it with the agreement a few weeks back, that they can just sit this out. Is that a risky strategy, though? WEST: I don't think it's a risky strategy. I think that if you continue to come up with policies of appeasement to try to bail the president out from his own idea, then you're not going to look like you have any resolve or resiliency. Let's go back and look and talk about this fiscal cliff deal where we saw 41 dollars of tax increases to one dollar of spending cuts and the revenue that was generated off of that fiscal cliff deal was about 60-some-odd billion dollars. Well, guess what, Neil? That's already been spent up because of the Hurricane Sandy relief. So this $85 billion that you're talking about, it will be eclipsed in no time whatsoever because you still have an increase in spending in Washington, D.C. (CROSSTALK) CAVUTO: People forget that. I want to make that clear, because you know this stuff in and out from your days there that in the scheme of things in a $3.8 trillion budget, this is a joke, this $85 billion. Furthermore, half the $85 billion in forward years. Leaving that aside, though, obviously Republicans know in the scare game, which is something that we're going to get into a little bit with a clinical psychologist who knows about scaring people, that it can become a self-fulfilling prophecy, it can have an economic impact, and if it does have the economic impact, the president is going to say, well blame the other side, certainly not me. I was trying to resolve it. WEST: Of course. Of course. CAVUTO: How do the Republicans answer that? WEST: Well, that's the schizophrenic political game that is being played with the idea that he created. It should be about solutions. Instead of having across-the-board cuts, we could have vertical cuts, which could allow these agencies to go in and look at the specific wasteful programs that we need to get rid of. You can also go back and have the Senate pass the two pieces of legislation that the House had already passed, and we have done that on several occasions. But to just sit around and scream and yell about the sky is falling, that's not leadership, Neil, and I think that is what is lacking coming out of the White House. CAVUTO: By the way, I just want to be clear because a lot of people doubt this, but the president was well aware of some of the cuts that would be coming down the pike when he went into his golf weekend. Right. So, in other words, if there was going to be the fear-mongering about fewer meat inspectors and the hundreds of thousands of mentally ill patients out on the street without their meds, he knew that was coming when he went on his golf vacation. Right? He just didn't find out Monday morning. Right? WEST: Well, the president was well aware of this back in 2011 when he stood up and said that he will veto any means by which we try to avert having sequestration hit, and then, of course, as I said during the final presidential debate in Boca Raton, he said -- quote, unquote -- "sequestration is not going to happen." CAVUTO: All right. WEST: So we have not seen any solutions from him, other than the stagecraft of giving really good speeches. CAVUTO: All right, thank you very much, Allen West. Content and Programming Copyright 2013 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2013 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.