This is a partial transcript from "On the Record," December 21, 2005, that has been edited for clarity.

JAMIE COLBY, GUEST HOST: It's been four months since Hurricane Katrina slammed the Gulf Coast and the devastated area is slowly coming back to life.

Earlier on Wednesday, the mayor of New Orleans announced that the curfew will be lifted on Friday and more residents can soon return home but can they really with so many streets filled with rubble and abandoned cars and thousands of families still homeless?

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

(BEGIN VIDEOTAPE)

GRETA VAN SUSTEREN: Is this your first trip down here?

SEN. HILLARY CLINTON, D-N.Y.: It is my first trip since the hurricanes. You know, I've waited for a time when I wouldn't be in the way and I'd have a chance to see what the long-term challenges are going to be. And, Senator Landrieu and I have been planning this trip so that I could come down with her.

VAN SUSTEREN: I mean I should ask you this when you see it on TV does it in any way do justice to what you see today?

CLINTON: You know, Greta, my reaction is the same as it was after the tragedy of 9/11, you know. I remember looking at the TV and being just overwhelmed by the destruction and the devastation.

When I actually went to New York and saw it for myself, TV does a great job but it still is a screen. It doesn't matter if it's a small screen or a broad screen, it can't possibly encompass it.

And the same here, I mean mile after mile of devastation and we're not even in the worst yet. I mean what I've seen so far is not the worst of the impact of the flood. We're going to see that now when we go to the lower 9th Ward but you look at these homes...

VAN SUSTEREN: Look at the cars.

CLINTON: ...and the cars and what is so treacherous about floods is that I mean physically the home is standing there. You walk inside, as we just did in that home across the street, everything has to be gutted. Everything has to be thrown away. It's such a cruel experience.

You come home and you walk in your front door and you see, you know, a couch and you see maybe a picture and you try to pick it up and it just disintegrates in your hand. In some ways, cleaning up after a flood is the most depressing kind of recovery work after a natural disaster like this.

VAN SUSTEREN: As a U.S. Senator, how do you draw that line between doing the decent thing and the practical thing, the realistic thing, I mean because you can't bring everything back to these people but where's that line?

CLINTON: Well, I think that the line has to be what is in the area of responsibility of the federal government, number one. The levees clearly are and the announcement of $3.1 billion was a welcome one but nowhere near what's going to be needed because from my review of the analyses that have been done so far the levees were allegedly built to withstand a category three hurricane but it turns out they weren't so if we just rebuild it to what it was before that's not adequate and that is clearly the federal responsibility.

The transportation, the coastal, you know, wetlands, all of that, plus in every other disaster from earthquakes to, you know, hurricanes to tornadoes to floods to 9/11, the federal government has come in with assistance for small businesses to get back on their feet, assistance for homeowners, assistance for, you know, local governments.

And, up until now, that has not been forthcoming the way that it should. A big amount of money was appropriated but that money wasn't allocated in the right way. And, Senator Landrieu has been fighting very hard, along with her colleagues from this affected region to get the money to be more flexible to address the real needs and I think we're finally going to get on the right track for that.

VAN SUSTEREN: Is it a case a little bit of though who's on first because we've known this problem was going to happen? I mean this is no surprise. It's like we're waiting for San Francisco essentially to happen. If the money comes, how do we make sure it goes to the right places and it's not just sort of whittled away? I mean who's going to be the policeman on this?

CLINTON: Well, the federal government needs to be and frankly I don't know if they're equipped to do that. You know I have been looking at ways that we can make sure that when the Army Corps comes back in on these levees they do the job right. You know there's a lot of evidence that for whatever combination of reasons they and their contractors did not even fulfill the requirements of the original contracts about what to do with those levees.

So, how can you hand them money and so go fix it when they may not have done it right the first time, which is one of the reasons why I've called for an independent Katrina commission that frankly just looks at everybody and everything. Unless we know what went wrong, how can we assign responsibility and expect accountability going forward? So, I believe strongly that we have to have accountability and I hope that we'll get that from how we proceed going forward.

VAN SUSTEREN: We have a major problem. Hurricane season starts June 1. We don't have a lot of time to do a lot of things.

CLINTON: Right.

VAN SUSTEREN: You know what are we going to do I mean?

CLINTON: Well, I think if we can get done what was announced a few days ago to get the levees built back up, they won't be to the level they need to be in my opinion but they will provide a substantial amount of protection for the area but let's do it right.

You know one of the things that we did after the Northridge earthquake in California was with a federal government, state government partnership put a full court press on rebuilding all the interstates around L.A. that had been damaged.

And, you know, it wasn't as mass a job, massive a job as this is but it was a pretty big job and all kinds of both carrots and sticks were put on the contractors. If they got, you know, if they met the requirements and did it with a full accounting that they have done it right ahead of time, they'd get a bonus. If they delayed it and didn't do it right, they'd get penalized.

I mean, you know, there are a lot of creative ways that we can get this job moving as it should be because unless the levees are rebuilt a lot of people are going to say well how can I be safe enough to come back? And, I don't blame them.

(END VIDEOTAPE)

Watch "On the Record" weeknights at 10 p.m. ET

Copy: Content and Programming Copyright 2005 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2005 Voxant, Inc., which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.