This is a rush transcript from "On the Record ," February 26, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Bipartisan? Are you kidding? Neither side is playing particularly nice. Democrats are rolling over the Republicans. The leaders of the GOP are skewing President Obama and the Democrats over that stimulus bill, the budget and this latest news, new spending bill that passed the House yesterday. So what next? Republican National Committee chairman Michael Steele joins us live.

Nice to see you, and congratulations on your new job, a little late.

MICHAEL STEELE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: Thank you very much. Thank you.

VAN SUSTEREN: I have a question. The other night Governor Jindal was the one who did the speech. How is that chosen? Who does that?

STEELE: That process is done by the leadership of the House and the Senate. They figure out who is in the best position to reflect where the party wants to go, who can express the opinions and the views of the party.

Governor Jindal is someone everybody is excited about. He represents the cutting edge of the GOP now, and one of our new, young governors.

And it was great opportunity for him to be in the spotlight, to show a new branch of the party, but also to say some serious things about our economy as he is a governor of a very big state that is having a lot of problems.

VAN SUSTEREN: So it is not necessarily an anointing on any sort?

STEELE: No, it is not an anointing of that particular kind. It's nice when you get the honor. But the reality of it is you bring a little substance to the table, and you can actually stand toe to toe with the president, but you are quite there, because, after all, it's the president who is giving the ultimate speech.

But you can present the other views, the other opinions that are out there, and it is a good platform.

VAN SUSTEREN: All right, the news all over this country is this spending. I imagine that the CPAC is have a field day with this.

STEELE: Yes, it is. Conservatives around the country are doing two things right now. One is acknowledging with a big mea culpa that we actually had a hand in creating this mess, because we went down the road in which we grew the size government. We then went on a spending spree, not vetoing many budgets at all that were loaded with a lot of pork.

And then we get into this tough period where we are leading the charge on bailouts and so forth at the end of the Bush administration.

Watch Greta's interview with Michael Steele

So there is this sense that we know we are talking about when we know that bad things come from a lot of uncontrolled spending.

And then we are trying now to say, look, we get that, and we are focused on those core things that we think are going to be important to make our economy strong again, focusing on small businesses, relying more on their ingenuity and expertise to go out and create a job and create wealth, and the government.

VAN SUSTEREN: You raise an interesting point, that the Republicans had a big hand in building a big government, spending a lot of money, the spending weren't vetoed by the president.

So how do you tell the American people, now that you have both done it - the Republicans and the Democrats? Where the independents? Where is something?

STEELE: I think how we can go back and tell the public that there is a better way is because it was always there for us. We have always been the party that has talked very clearly about a smaller government that is more efficient, a government that doesn't pick winners and losers.

VAN SUSTEREN: So this time we should believe you?

STEELE: As long as I am chairman, you better, because we are not going down that road again, trust me. We're not going to get into this habit of trying to outspend the Democrats and outdo them on these big ticket items. What is the point? That's not the core of what we're about.

VAN SUSTEREN: There are some Republican earmarks in this latest budget. Is there a way you can coral your Republicans --

STEELE: Absolutely. I'm on the phone first thing in the morning and having a conversation. I do not how we can in good conscience look at the other side and go "Bad Democrat, spending pork, creating more debt and deficit. And, by the way, slip that on page 40."

VAN SUSTEREN: So suppose someone says to you "Michael, thanks a lot for the call, but I need to do it for back home for my constituents." Then what do you do? Let's say it is swine odor study--research?

STEELE: Let me ask you this--what is swine odor, spending a million and a half or $2 million to test whether a pig stinks if someone has just lost a job?

Can we put that $2 million into creating a training program in your district that will empower someone to get back on their feet and find maybe in another field or another industry, but they are not sitting at home, which, under this administration, they are now going to pay the state's 80 percent of the cost if the increase their welfare caseloads.

VAN SUSTEREN: And the answer is "Michael, gee that's a good point. Maybe in the next spending bill."

STEELE: And my answer is this--when we get to a $1 trillion surplus, then we can talk about pork and spending money for how much a pig stinks. But until that time, I think the American people right now are looking at the leadership of the country and going "You do not understand. My wife just lost her job. My son cannot afford college. You had better get this act together, or the bloodbath that you saw in `06 and `08 will be a toga party compared to what is going to happen when you get to 2010 and beyond."

The people of this country expect the leadership to become honest and real in spending their money.

We have spent, Greta, and you have talked about it, and I see the frustration and concern on your face, a lot of money in three weeks.

VAN SUSTEREN: I just do not know where it's coming form.

STEELE: I don't know where it's coming from.

VAN SUSTEREN: I don't know when the Chinese are finally going to say to us, "You are a bad credit risk."

STEELE: Of course they are. It's like what your previous guests have said exactly. At some point, when someone owes you money, and you are looking at them spending money with everybody else, creating additional debt for themselves, at some point you are going to say, "When am I going to get back what you owe me?"

And the American people don't have that kind of bling bling in their pockets.

VAN SUSTEREN: Indeed, they do not. Michael, it's nice to see you.

STEELE: Thank you. Take care.


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