This is a partial transcript from "Your World with Neil Cavuto," February 16, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: Now it's really kind of like the interview that just keeps on giving and giving. We're going to have some of your reaction to my chat with New York Attorney General Eliot Spitzer later in the show. For now, though, the rest of Mr. Spitzer, this time on a subject almost as near and dear to him as his celebrated corporate crackdowns, something called politics. Here again, completely unedited, as promised, me and that guy Spitzer.

(BEGIN VIDEOTAPE)

CAVUTO: If you don't mind my keeping on a political theme here, sir.

ELIOT SPITZER, NEW YORK STATE ATTORNEY GENERAL: Sure.

CAVUTO: Howard Dean is the new Democratic National Committee chair. Many in your party argue he's going to take it too far to the left. Are you worried?

SPITZER: No. I think Howard Dean has been a voice, really a moderate voice. I think there was a perception, because he was rather firm on his position on the war during the primary season when he was a candidate for the presidency, that people caricatured him in a certain way.

If you look in his record as the governor of Vermont. He actually balanced his budget, something George Bush has not been able to do. He provided quality health care, invested in education. He dealt with issues in a very moderate, reasoned way, I think.

There's an op-ed piece in The New York Times today that talks about Howard Dean and others as being fighting moderates. I think that with the enthusiasm that you see from Howard Dean is enthusiasm to ensure that the principles we believe in are articulated, articulated with clarity.

He is not going to move the party left. Frankly, it's not up to the DNC chair to move the party one way or the other. It is up to the elected leadership. And I imagine I've read in the papers, at least, that that is what Harry Reid and Nancy Pelosi and others in Washington have been saying.

Howard Dean is going to be a great chair. I look forward to working with him.

CAVUTO: All right. Mr. Attorney General, you tore into President Bush for failing to rein in some of the corporate shenanigans. I guess you included Enron and WorldCom. But a lot of this occurred when Bill Clinton was president.

SPITZER: Right.

CAVUTO: What do you make of this disconnect then?

SPITZER: Well, it's not too much a disconnect. I think that there are two separate questions. First, was the SEC appropriately vigilant over a lengthy period of time that goes back even before George Bush? Of course, the answer is no. Arthur Levitt, to his credit, tried, but there was an infrastructure in Washington that did not permit him to address these issues.

So this is not a matter of the Bush administration coming in and creating the scandals, by no means. I don't think I've ever said that and nor would I suggest it. The scandals were ongoing. The scandals were a consequence of a lack of enforcement at many different levels for a lengthy period of time.

The reaction and response of the Bush White House initially, after much evidence of the scandal was out there, was inappropriate, however. Harvey Pitt went up to Capitol Hill, and rather than supporting efforts to clamp down on the illegality, supported efforts, to use a legal term, to preempt efforts on my part to pursue the illegality.

Harvey Pitt met with the CEOs of the companies that were breaking the law and said, it's not my problem, I'm not going to do anything.

So that attitude was wrong. The problems, the genesis of the problems, goes back long before George Bush. We should all be clear about that. But what I've said is that the response from the Bush White House was not sufficiently rigorous. Ultimately, of course, Sarbanes was passed, and he signed it. But that was after much opposition on his part from even reasoned responses to these scandals.

CAVUTO: You know, sir, you had recently told the Financial Times that state regulatory activism had passed the high water mark. Now I know you've stepped back from comments made that The New York Times picked up that maybe 50 states AGs going after corporate corruption could be a little bit confusing.

Do you, though, think that there is a risk that if 49 other guys were as zealous as you were, it could be a mess?

SPITZER: Well, let me amend your question one little bit, Neil. Not to pick a fine point. I don't think I'm zealous. I think I'm doing my job. I think we are pursuing and enforcing the law.

Having said that, sure, I've said throughout this period that states have been and become, for whatever reason, a focal point of enforcement. There is a risk. There's a risk that when you balkanize enforcement, there can be inconsistency. You can make it harder for businesses to operate in what has become a global economy. And so clearly, that is an issue. And I've said since day one, we need to be cautious about what the impact of this so-called devolution of power to the states will be.

The point I've made, also, is that the way for the federal government to respond is to reassert itself by being appropriately rigorous in its own enforcement. That we went through a period where the federal government stepped back and failed to enforce the law, and that is what created this environment.

CAVUTO: So now that the federal government, in your latest comments, seems to be more proactive, do you think state AGs, including yourself, should cease and desist, slow down?

SPITZER: No. We will not cease and desist. We will not step back. We will not say, OK, now you've shown up again, here's the ball; you run with it. There will be, as there always has been historically, a dynamism between the states and the federal government.

We have many investigations that we are doing jointly with the SEC. The subpoenas that were served on AIG a few days ago that AIG revealed yesterday, we've done that jointly with the SEC. There are many other things we're doing with the SEC. Many things we're doing without them.

But there will be that continuing dynamic, where some things we work together, some things we do separately. And that has served this nation well historically.

This debate about federalism and state versus federal power, we should understand, is part of the 200-plus-year history of the United States. You know, "The Federalist Papers," written by Alexander Hamilton, were an argument for greater federal power. There was a counterpoint by Thomas Jefferson, of all people, who said, no, we want more state power."

So this is part of a continuum and part of a long historical debate, and this is merely one small chapter in that debate.

CAVUTO: All right. I appreciate your indulgence, Mr. Attorney General. Two very quick fine points.

SPITZER: Sure.

CAVUTO: One concerning Warren Buffett and Berkshire General Re reinsurance company.

SPITZER: Yes.

CAVUTO: Where does that investigation stand?

SPITZER: I have to be very careful what I say. All I can say is that there is a larger investigation related to the issue of finite insurance and Gen Re, as well, has been providing information. Beyond that, I really can't say anything.

CAVUTO: Mr. Buffett has said he knows of no problems at the company. Is he right?

SPITZER: I certainly don't want to disagree with Warren Buffett.

CAVUTO: OK. So he's right? There are no problems.

SPITZER: I said I don't want to disagree with him. Doesn't mean I couldn't disagree with him down the road. But I said I don't want to disagree with Mr. Buffett.

CAVUTO: All right. I apologize. One personal question, sir. I realize that you're a big Bruce Springsteen fan.

SPITZER: I am.

CAVUTO: I didn't know the degree to which you were a big Bruce Springsteen fan. What do you like about him?

SPITZER: You know, he has a passion, and he speaks from the heart. And since I was in college, I've just loved all of his albums, gone to a whole bunch of his concerts. And he's a performer who loves what he does, speaks to the passions of the American public and speaks for the working men and women of this nation and their needs and their world view.

CAVUTO: He was involved, as you know, sir, in the campaign last year.

SPITZER: He was.

CAVUTO: To little avail.

SPITZER: Well, I don't know. If he'd given a few more concerts, who knows? Maybe John would have gotten over the top. If Bruce had been the candidate, I bet he would have won.

CAVUTO: Well, maybe you're right. Mr. Attorney General, thank you very much. Good to see you.

SPITZER: Thank you, Neil.

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