This is a rush transcript from "Your World With Neil Cavuto," August 4, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: OK. So, if this report is right, Nancy Pelosi knows more drilling is politically popular, but she won't allow it. Why won't she allow it?

With us now, Democratic Congressman Eliot Engel of New York.

Congressman, good to have you.

Do you believe there's something to this?

REP. ELIOT ENGEL (D), NEW YORK: No.

Video: Watch part 1 of Neil's interivew with Eliot Engel | Part 2

I believe that the American people are tired of all the political fighting. The American people want something to be done. We're it an election year. Both parties are hunkering down, trying to get a position that benefits them politically. And I think the American people want us to work together. That's what I have tried to do over the past several years.

CAVUTO: But a majority of the American people, Congressman, are saying, drill — not exclusively, but drilling should be an option. And she's saying no.

ENGEL: Well, it's not a matter of drilling or not drilling. I mean, the Republicans controlled the White House, the Senate and the House of Representatives for six straight years. I didn't see them expand drilling or have any kind of sensible energy policy during those six years.

They have done polling now, and polling shows that the American people want drilling.

(CROSSTALK)

CAVUTO: Do you — do you want drilling?

ENGEL: Well, I think we need a balanced energy policy. I don't think...

(CROSSTALK)

CAVUTO: Well, Barack Obama says part of that balance is drilling. Do you agree with that?

ENGEL: No. No. Well, I do, but it's not the only thing.

Let me tell you, we cannot drill our way out of this crisis. The fact of the matter is that in our country every time the noose was loosened a little bit, we went back to our old gas-guzzling ways. It can't be anymore.

We have got to find a way to become energy independent, and it's not by drilling for more oil.

Now, if we have to drill for more oil as part of a balanced package, so that we can pass something and help the American people, then I would be for it. But I'm not for drilling at the expense of going to renewables.

(CROSSTALK)

CAVUTO: I understand, sir. Very important distinction. Now, you just said, you would be open to more drilling. Barack Obama is open to more drilling. Nancy Pelosi is not open to more drilling. She won't even allow you guys the opportunity to vote on that.

ENGEL: Well, tell me why, when Denny Hastert was the speaker and Republicans controlled everything...

CAVUTO: I'm not here to do the blame game, Congressman.

ENGEL: Well, but you are.

(CROSSTALK)

ENGEL: But you are.

(CROSSTALK)

CAVUTO: No, no. I'm not. You can argue — on this show, I criticize both — Republicans who want to give tax credits to the oil industry — they don't need it. I criticize you guys for wanting to protect the caribou over our Caravans.

ENGEL: Well, but...

CAVUTO: I am just saying to you, Congressman, can't we drop the talking points here? You expressed a willingness, as did Barack Obama, to look at exploring for other options, to look at drilling, to look at all of the above. Yet, your leadership in Congress is cherry-picking what it wants to do.

ENGEL: Well, but, my leadership in Congress has put forward bills to increase CAFE standards to make us have more energy-efficient cars. Most Republicans voted no. My leadership has put forth a plan to get at the oil speculators that are driving up prices. The Republicans say no.

And now that we're saying, Democrats are saying...

CAVUTO: So, that's a given, oil speculators are driving up prices?

ENGEL: Well, I think they are driving up prices. I think there are a lot of things driving up prices. We are also...

CAVUTO: Well, your leadership also went after oil companies to tap their profits.

ENGEL: Well...

CAVUTO: And are you for that as well?

ENGEL: Well, I think that big oil is making unbelievable profits, and it wouldn't be so bad if they took some of those profits and pumped them back into alternatives to help the American people.

CAVUTO: How long have you been in Congress? How long have you been...

ENGEL: I have been in Congress for 20 years.

CAVUTO: OK, so you had missed the Carter years, when we had a windfall profits tax?

ENGEL: Well, when I...

CAVUTO: Because that was a beaut. That didn't turn out too well.

ENGEL: Well, you see, but it's not a matter of windfall profits tax. You know, it's interesting to hear the big oil companies now complain that they want — they want more drilling. The fact is that we have 68 million acres that have not been drilled on...

(CROSSTALK)

CAVUTO: No, no, my question, Congressman, has nothing to do with drilling. And on this 68 million canard, I could go back and forth.

(CROSSTALK)

ENGEL: That's your...

CAVUTO: I'm asking, Congressman, about the situation with a profit tax on oil companies that already pay record taxes to help Washington. Now, I'm not an apologist for them. I'm just asking you this.

You want a windfall profits tax. Barack Obama wants a windfall profits tax. Nancy Pelosi wants a windfall profit tax. You know the experience in the past with a windfall profit tax. Total disaster.

Do you think that it will be any better the second time around?

ENGEL: Well, you say the oil companies are paying the greatest taxes. They're also making the greatest profits. And I don't think there's anything wrong with taking some of that money and pumping it back into the United States, in our energy policy...

(CROSSTALK)

CAVUTO: What is too much money?

ENGEL: Let me finish.

CAVUTO: If they make 10 — if they make 10 cents on the dollar and compared to other industries that make more, you think...

(CROSSTALK)

ENGEL: I'm not getting...

CAVUTO: What's the level at which you say, "It becomes so obscene...

ENGEL: No.

CAVUTO: "... we think you should give more money"?

ENGEL: The level is, the bottom line, Neil, is that we cannot drill our way out of our...

(CROSSTALK)

CAVUTO: I'm not saying that.

(CROSSTALK)

CAVUTO: But is there a level at which you say, "You make too much money"?

ENGEL: You keep interrupting me. You're not letting me...

(CROSSTALK)

CAVUTO: Because you're not answering. What's a level at which you say, "You make too much money"?

ENGEL: I'm trying to answer, but I'm not giving you the answer you would like.

I'm saying that the United States of America needs to get away from our thirst for big oil. We need to make ourselves energy independent by looking for alternatives.

I think that the oil companies...

CAVUTO: Fine.

ENGEL: Let me finish — that are making...

CAVUTO: Should pay more to do that.

ENGEL: ... that are making windfall profits ought to take some of those profits and pump it back into helping Americans find alternatives to get our oil...

(CROSSTALK)

CAVUTO: No, no, Barack Obama says, give that excess profit in terms of rebate checks to American — individual Americans.

Are you for that, yes or no?

ENGEL: Neil, Neil, Neil, Neil, I am for a balanced energy policy that weans us off of oil. We cannot continue to merry — go along merry ways...

CAVUTO: Congressman, we're in agreement there. We're absolutely in agreement.

(CROSSTALK)

CAVUTO: But I'm asking you this. Barack Obama says the oil companies should take those profits and fork over some of them to Uncle Sam to help pay for rebates for American consumers.

ENGEL: No, I think...

CAVUTO: Are you for that?

ENGEL: I am for the oil profits paying their fair share — the oil companies paying their fair share when they're making obscene amounts of money, into helping the United States' average person at the pump wean ourselves off of oil.

(CROSSTALK)

CAVUTO: So, if they pay a third to the government — if they pay a third, the highest corporate tax rate, they should pay still more?

ENGEL: Are you — are you being an apologist for the record oil profits for big oil?

CAVUTO: No, I'm being a realist. I'm telling...

(CROSSTALK)

ENGEL: I care about the American consumer paying $4 a gallon for gas.

CAVUTO: Congressman, please don't play games.

Let me ask you this.

ENGEL: No, you're playing the game.

CAVUTO: If oil companies, if companies in general, who are already paying the highest tax rate, and in the last few years...

ENGEL: And making the biggest profits. And making the biggest, obscene profits.

(CROSSTALK)

CAVUTO: You can call them obscene all you want.

ENGEL: Well, they are.

CAVUTO: If they have paid $100 billion...

ENGEL: When my constituents pay $4 a gallon.

CAVUTO: Are you saying — Congressman, you are taxing my nerves.

Are you saying, yes or no, that you would be open to taking their profits that you call obscene and excessive, tapping that, and giving that in rebate form to the American people? Are you for that?

ENGEL: No. I'm for taking their profits. I'm for taking away the tax breaks that the Republican Congress gave to them and using those breaks to find out how we can get away from our thirst for oil.

CAVUTO: See you disagree with Barack Obama, who wants to fund rebates for American consumers...

ENGEL: You know, Democrats...

No, no, no, no.

CAVUTO: ... with those excess profits?

ENGEL: You're not going to get me...

(CROSSTALK)

ENGEL: Democrats don't have one mantra that we're talking about, like the stunt that...

(CROSSTALK)

CAVUTO: I don't know what your mantra is.

ENGEL: Well — well, like the stunt the Republicans are doing now on the House floor, that's theater, OK? That's what they're doing. If I was...

(CROSSTALK)

CAVUTO: No, I will tell you, Congressman — no, let me tell you something...

ENGEL: Neil...

CAVUTO: ... here's what — here's what's theater, Congressman.

ENGEL: You keep cutting me off.

CAVUTO: No, because — because here's what's theater. When you tell the American people oil companies are the bad guys, not a reluctance to let drilling be a solution, and you say that speculators are the bad guy, not us, collectively, Congress' inability to come up with a cohesive economic plan.

When you guys blame the speculators, when you guys blame oil companies, and you never look in the freaking mirror and say, we're the reason we have got this debacle.

ENGEL: Do you think the speculators and the oil companies are not to blame for some of this problem? You don't think the large gas-guzzling...

(CROSSTALK)

CAVUTO: The speculators and the oil companies have been around as long as you've been in Congress. As long as you've been in Congress, they have been there.

ENGEL: Do you think we ought to plod merrily along...

(CROSSTALK)

CAVUTO: Congressman, did these guys just pop up out of the blue, like mushrooms, in the last few weeks?

ENGEL: No.

If I were the president of the United States, you know what I would do? I would call an oil conference. I would get the leadership in Congress to come in. I would get big oil companies to come in. I would get alternatives to come in. And I would find a bipartisan...

(CROSSTALK)

CAVUTO: You know what I would do, Congressman? I would have the same people you're calling in. And after you berate them, I would flip it around and let them question you, why you have been reluctant to allow more drilling, why you have gone scapegoating to go after speculators, why you have pontificated about how evil the oil companies are.

ENGEL: Do you think drilling is the solution to us?

(CROSSTALK)

CAVUTO: Exclusively, it's not.

ENGEL: OK. Well, thank you very much.

CAVUTO: But, by closing it off as an option entirely...

ENGEL: No, I didn't say that.

CAVUTO: ... who are you helping?

ENGEL: I didn't say that. I said that we could consider drilling more, a little bit more, if we are also looking at weaning America away from oil and looking at alternatives...

CAVUTO: Congressman, here's the deal. Do you know what...

ENGEL: ... like Brazil has done, like some of us have done.

CAVUTO: Do you know what ticks off the American people about both Republicans and Democrats on this issue? Republicans hold dear these tax credits for an industry that's making a lot of money, like you say, that doesn't need them. And Democrats hold dear to protecting caribou over people who need to drive their Caravans. And both sides just talk past each other.

Now — now — now...

ENGEL: People don't need Caravans. We ought to have more efficient cars...

CAVUTO: Fine. That's the first...

ENGEL: ... and maybe we wouldn't have so much gas guzzling.

CAVUTO: That's the first clear alternative you've proposed.

What I'm saying, Congressman — and there's a pox on both parties here — you got to get past the talking points and find the middle ground. You've got to quit vilifying speculators. You've got to quit vilifying the oil companies. You have got to start finding solutions, because you can't get them all at the table if you're pissing at them on the table.

ENGEL: Neil, I — it's the first thing you have said with which I agree. We've got to get everyone in a room and we've got to figure out a way to wean us off of oil, to make ourselves energy independent, the way Brazil has done...

CAVUTO: You just said to wean us off of oil, even though you want to now drill for more oil.

ENGEL: ... the way — the way...

CAVUTO: Which is it?

ENGEL: No, no, no, no, no. I don't — you want to drill. I don't want to drill.

CAVUTO: You said it again. You're open for more drilling.

ENGEL: I'm saying — I am saying that, if as part of a balanced energy policy to try to get an agreement from the Congress that the president could sign, if we have got to look at drilling, a little bit more drilling, then I'm willing to look at that.

CAVUTO: Include it, right? Include it?

ENGEL: But I think that we cannot drill our way out of this crisis. We have got to look for alternative...

CAVUTO: So, you're open for more drilling, but we can't drill our way out of it?

ENGEL: No. You seem to think drilling is an exclusive solution. I'm saying...

CAVUTO: I don't. I'm just saying that, actually, on that issue, I agree, that drilling should be among the issues we look at, right? Yes or no?

ENGEL: OK. Yes, it should be. But it's not the solution.

CAVUTO: All right, Congressman, I got to get you back, but oy, oy.

All right, Congressman.

ENGEL: Always a pleasure.

CAVUTO: Yes, indeed it is, sir. Thank you very much, Congressman Engel.

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