This is a partial transcript from "On the Record," December 19, 2005, that has been edited for clarity.

MEGYN KENDALL, GUEST HOST: It has been nearly four months since Hurricane Katrina slammed the Gulf Coast. Huge improvements have been made since the devastating hurricane but there is still much more to be done.

Over the weekend, Greta caught up with Senator Hillary Clinton in New Orleans.

(BEGIN VIDEOTAPE)

GRETA VAN SUSTEREN, HOST: Where do we come up with these numbers like $3 billion and $2 billion? I mean I hear these horrendous numbers and maybe they're needed but who's figuring these out, I mean any idea?

SEN. HILLARY CLINTON, D-N.Y.: Well, you know, when the emergency money was appropriated after the hurricanes it was a very broad best guess about what was needed and similarly after 9/11, you know. We appropriated $40 billion, approximately 20 for the war and for other needs that our military and homeland security had, 20 for New York and Virginia, The Pentagon, et cetera, to be rebuilt. Well, we appropriated that money based on our best information at the time. Then we reallocated within it.

VAN SUSTEREN: So it's a little bit of a guess. I mean I hate to use that word guess but guesswork as we go is that how we do this money thing?

CLINTON: No, it is an assessment of what we think we'll need but you appropriate a large amount of money. A lot of the money, for example, in the Katrina emergency went to FEMA.

Well, frankly FEMA has not been the best steward of the money and not been very swift in getting the money out and has, you know, a federal judge here in New Orleans just a couple weeks ago said that their, you know, actions have been erratic and eccentric and bizarre and everything else.

They just haven't really fulfilled the public trust they were given. So, what Mary Landrieu and others have been arguing is take some of that money that is in the pot already, it's already been appropriated and shift it over to what are called community development block grants, so that you can get the garbage picked up. You can get the police and fire departments back up.

We were just at that church, the Queen Mary of Vietnam Catholic Church. They want to put trailers across the street so that their parishioners can actually live there and the church can be the center of rebuilding. I think that's a great idea.

Well, they don't have police protection yet, so getting the money into the right pocket and then holding everybody accountable and having good accounting so that we really watch every dollar as it's spent is what we should be doing.

VAN SUSTEREN: I think most Americans are a little suspicious though. I mean we're a very generous country but, you know, when we dish out money we don't know where it goes. I mean we're not sure we're getting a bang for our buck.

CLINTON: Well, I understand that, you know. Look, I was raised by a father who didn't believe in credit cards and the whole nine yards. I consider myself in that category and I think that's why you need to have good systems in place to start with.

I mean look I was heartbroken when I saw how dysfunctional FEMA had become. It worked during the Clinton administration. James Lee Witt and the team that he brought in they were on top of it. They responded. They knew how to...

VAN SUSTEREN: They didn't have Katrina though and 9/11.

CLINTON: No, but they had earthquakes. They had the, you know, huge flood in the Middle West. They had lots of natural disasters. But these are unprecedented so even more you need to be fully prepared and up to speed and have the best people, not the cronies but the experts in charge.

This administration I think has learned that lesson a little bit late and we paid a big price for it, so I don't blame any American sitting, you know, in New York, California, anywhere else saying hey I want to make sure the money goes to the right place.

That too is a federal government responsibility. There should be an inspector general. There should be really strict accounting. I've called for the same thing with Iraq. Look at the money we've wasted in Iraq. I mean look at the money that we've given in no bid contracts that we can't even find where it went. They've wasted billions of dollars. It is wrong.

And, for me, it is just an example of a failure to, you know, run a government competently, whether it's, you know, spending money in Iraq or failing to spend it here in New Orleans and along the Gulf Coast.

We can do better. America can do better. We've done better in the past and I think we should get back to doing better and we should expect everybody in public office to live up to that standard.

(END VIDEOTAPE)

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