This is a rush transcript from "On the Record ," July 10, 2008. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight, the Reverend Jesse Jackson goes "On the Record." Now, Reverend Jackson slammed Senator Obama Sunday before a FOX News interview. He said this about Senator Obama's faith-based policies.

(BEGIN VIDEO CLIP)

REV. JESSE JACKSON, RAINBOW/PUSH COALITION: See, Barack's been talking down to black people on this faith-based -- I want to cut his (DELETED) off. Barack, he's talking down to black people.

(END VIDEO CLIP)

VAN SUSTEREN: Reverend Jesse Jackson joins us live from Indianapolis. Good evening, Reverend. And any more fallout since yesterday? Any more talk or comments from the Obama campaign, sir?

JACKSON: No, really, we're beyond that stage now. I made my point very clear and showed contrition and apologized. And of course, he responded with graciousness and quickly, and now folk are back on the agenda.

Watch Greta's interview With Rev. Jesse Jackson

My concern even now is that the faith-based initiative, while valid, is limitless compared to what our real needs are. For example, you may get a faith-based day care center, but the parents have lost their job because of home foreclosure, they need more than that. Look at collapsing levees and bridges, we need the government-based and private sector-based, as well. And so (INAUDIBLE) has embraced that message, and that is clearly a message that can really revive urban policy.

VAN SUSTEREN: Do you -- when you -- when you apologized to Senator Obama, did you -- was this in a phone call, or did you do it just by note? How was that done?

JACKSON: Well, I contacted his office. You know, we talk frequently, so it's rather social. Socially, it flows very well. You know, I've known him over 20 years, supported him for state senate, for U.S. Senate, for the presidency even before he announced because I thought he had promise. No one knew he would take it to this level this quickly. But he has the right combination, the manners, the message, the money, the timing. And so things have happened for him, and frankly, happened for America.

And what excites me so much about this (INAUDIBLE) this is really a transformative, redemptive moment for America. And I think that's what's been the highly (INAUDIBLE) to me. When I watched Hillary and Barack in Mississippi, where Schwerner, Goodman and Chaney were killed, where Medgar Evers was killed, and to see men voting for a woman, to see whites voting for a black in that state says so much about where America has come from in the last 40 years. And that to me has been a very exciting thing for -- really America and for the Civil Rights movement as a crowning achievement.

VAN SUSTEREN: Reverend, you mentioned Senator Clinton. During the primary season, there were so many state primaries where, you know, 90 percent of the African-American vote would be for Senator Obama. And Senator Clinton, of course, has a long history of Civil Rights work. Why is it that -- you know, that there was such a heavy concentration of Senator Obama? Because a lot of people think that, you know, people vote along race lines.

JACKSON: He seemed to have caught fire after Iowa. Iowa sent a wave of new hope and possibility. Of course, there was a very raucous campaign in South Carolina. At first, he was up 70-30, and something happened (INAUDIBLE) somehow traumatized (ph) and he captured the vote in South Carolina (INAUDIBLE) kind of blew across the country.

And he has a quality about himself where, in some instances, the more people see a politician, the less they like of him. In his case, the more they see of him, the more they like him. So he kind of grew on people. So when he was winning South Carolina and winning Wyoming, he has that kind of magic to go with his substance that's having a tremendous impact. And I think it's going to take him on to victory in November.

VAN SUSTEREN: What do you make of the comment that came out of the South Carolina primary, President Clinton making the comment that -- and there were many people who, you know, said that it was a racist comment, it was a remark about your election and your successes. Was that a fair criticism of President Clinton or not?

JACKSON: Well, I really don't think so. I talked with Congressman Meeks from Florida and (INAUDIBLE) was with him. He said I won both primaries, and I did. I think at that point, people were kind of stretching. And I was glad that by the time they got to Nevada, they had gone away from that kind of tension and baiting on to the agenda.

It's like when Hillary made a comment about Lyndon Johnson and the Voting Rights Act, and they said, Well, she's not giving Martin King credit. The fact is, it took three things. It took legislation by Johnson, demonstration by Martin King and litigation by Thurgood Marshall. It took all of that to make it happen. And so I think (INAUDIBLE) there was a lot of, I think, kind of an excess sensitivity.

The good news is that's behind us now. Now that the campaign is over, now it's time for reconciliation and to make a bigger, broader tent, which is the key to winning. When that does happen, you win. If it doesn't happen, you lose.

VAN SUSTEREN: There's a great political parlor game that we've all been playing is, Who's going to pick, you know, which candidate for vice president? If you were advising Senator Obama on that important topic, you know, who are the names you would sort of advance for him? Give me the top three choices, and why.

JACKSON: Well, I'm not sure I want to drop names, except to say whoever it is ought to, A, be philosophic -- have philosophic kinship with him, a philosophical (INAUDIBLE) Number two, the person ought to be perceived as loyal to him, somebody he can trust. And thirdly, have a constituency.

You know, (INAUDIBLE) when Lieberman got on Gore's ticket, he brought nothing to the ticket, ultimately. When Edwards was on Kerry's ticket, he didn't win North or South Carolina. When Johnson was on Kennedy's ticket, he brought Texas. They won by 110,000 votes. So whoever it is I think has to have the capacity to pull some weight and some defined constituency.

VAN SUSTEREN: How different is it now, do you think, for an African- American to run for president, than from, for instance, when you first ran, you know, many -- many campaigns ago?

JACKSON: Well, you know, barriers have kept moving. You know, in 1965, white women and farmers (ph) who didn't pay poll taxes and blacks couldn't vote. That barrier was removed. In '75, teenagers got the right to vote, and so that barrier was removed. They voted this year. In '74, you got the residents (INAUDIBLE) Iowa, you could actually vote where you go to school, so you could win caucuses. That barrier came down. In '75, bilingual education (INAUDIBLE) vote Latino or Native American, that barrier came down.

In '84 and '80, we were able to remove the threshold and bring it down to 15 percent and get proportionality, as opposed to winner take all. If it were winner take all, Hillary wins, say, California, Texas, Oklahoma, Pennsylvania, New York, she wins. But on the proportionality, Barack kept getting delegates because we lowered the threshold. So we kept democratizing the process.

So when he ran this time around, there were no more threats at polls, no more terror tactics. There were no more -- he ran a field without barriers. And of course, he had the money, the message, the method, the appeal and the timing, of course. He emerged as this historical force in victory.

VAN SUSTEREN: Do you admire Senator John McCain? And if so, why?

JACKSON: Well, one has to admire the fact here was a guy who was captured in the military, in the war as a POW. And he -- when they found out who he was, he had the option to leave, but he would not leave and stayed there five years longer, which could have meant death for him, through loyalty to his troops. He has a certain integrity factor, and the sacrifice (INAUDIBLE) makes him a genuine war hero. And so that is an admirable trait in Senator McCain.

VAN SUSTEREN: Where do you agree with Senator McCain? Where do you agree with him?

JACKSON: Well, I'll tell you, I do not agree...

VAN SUSTEREN: No, but where do you agree? There must be something you agree with him.

JACKSON: Well, I'm not sure. You know (INAUDIBLE) that he is a man that's capable. I think he is going to be outmatched and outclassed by Barack. I think he'll be faster, quicker, more appealing. And this is, I think, going to be a key to Barack's victory because what Barack has to add, I must say, is he has a sense of universality.

The fact is, he grew up in Kansas and Indonesia and in Hawaii, had a chance to see a bigger portion of the world. Barack sees the world through a door, through a keyhole. He has a sense that people can be talked with, negotiated with, and not just threatened and fighting all the time. I think there are things about him that just simply appeal to, I think, the best in us.

VAN SUSTEREN: Well (INAUDIBLE) and as part of the parlor, game, I think that the big wild card is who gets the women's vote, and that's still up for grabs. And I'm going to take the last word on that one. Reverend Jackson, thank you, sir.

JACKSON: Thank you very much.


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