This is a rush transcript from "On the Record ," March 9, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight: Down to the wire. We are just hours away from the Senate's vote on the massive $410 billion omnibus spending bill, the bill that is supposed to fund your government from right now until September 30. Now, at this hour, Senate majority leader Harry Reid is working hard to find 60 votes to shut off debate about the bill, but opponents of the bill are not going down quietly. Two Democratic senators plan to vote against the bill. Yes, two Democratic senators who are opposing their Democratic colleagues and their Democratic president. Senator Russ Feingold from the great state of Wisconsin and Senator Evan Bayh of Indiana both plan to vote against their party and the president.

Moments ago, Senator Bayh went "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Senator, in its current form, the $410 billion spending bill is not one you're going to vote yes for, is that right?

SEN. EVAN BAYH (D), IN: Well, I'm not going to support it Greta, no. I think there are substantive problems and definitely perception problems. We're running more than a trillion-dollar deficit. Our national debt is going up more than a million dollars every minute. And this bill over the next 10 years will add $250 billion on top of that.

I mean, think about this. If we just held the line for the next seven months in this fiscal year, we'd save seven months -- we'd save $250 billion. That's more than a third of all the money we're being asked for to reform the entire health care system in the country. So that's the substantive problem.

The perceptional (SIC) problem is that so many Americans are tightening their belts, trying to get through these difficult times, I think it's important for Washington and the federal government to show solidarity and do the same, to give up some of our projects to show that we can tighten our belts. I mean, even for seven months, that's not asking for too much.

VAN SUSTEREN: Well, you are one of the few Democrats -- Senator Feingold -- and I might add, from the great state of Wisconsin, which I always add -- he's also a Democrat who at least in the current form is going to vote no. Why is it that the two of you seem to be the only ones who have that thought and the rest of the people in your party think, It's fine, we'll vote for it and fund the government until September 30 at this number?

BAYH: Well, maybe it's just good Midwestern common sense, Greta. But in my case, it's the fact that I was a governor. I had to balance budgets even during difficult times, and sometimes you have to defer thing you want to do. Sometimes you have to make tough decisions to hold the line on spending. And in this particular case, this is just general government spending. It's not targeted at creating jobs. It's not designed to try and keep the financial system from going down. It's just across-the-board spending, many times the rate of inflation, many times the rate of inflation. And with the deficits that we have, all the money we have to borrow from abroad, which weakens our country, this is not something we should be doing now.

VAN SUSTEREN: Yes, I can see, you know, maybe sort of selfishly wanting your own sort of pork project to go through, but the problem is that there are so many. I mean, the numbers are extraordinary, how many of these -- over 8,000 earmarks in this. So you would think that while you might support -- really want yours, if you see 7,999 others, you might have a different view. They don't?

BAYH: Well, for some, it's the projects, and not all of them are bad. They're not all bridges to nowhere. But at this moment in time, I think it's just something we can't afford. Some of them like just the higher levels of spending for all the programs, the 8 percent across-the-board increase. They resented some of the lines that were drawn during the Bush years, and they want to make up for that, in their minds. And I think some others would prefer maybe to not, you know, buck the leadership, that kind of thing. So you put all that together and that generates support for the bill. But again, Greta, the day of reckoning is coming. We can't run deficits like this forever. The markets will react and punish us if we don't and...

VAN SUSTEREN: They are! Went down another almost 80 points today.

BAYH: Well, they are, but you know, that may be the result of many things. I'm talking about something truly cataclysmic -- our currency collapsing, interest rates skyrocketing because of our unsustainable deficits. It's now at an unprecedented level -- well, except during the Second World War, perhaps, or the Civil War -- of 12 percent of GDP, and this is just not sustainable.

I was with Ben Bernanke last week. He said, Look, you really need to get it down to 2 percent of GDP to avoid long-term problems. So for me, (INAUDIBLE) small stuff in the bill, either the projects or the annual appropriation increases for all the stuff -- that wasn't nearly as significant as doing what was in the long-term interests for the country and trying to reconnect with ordinary people and say, Look, we're with you on this. We're willing to tighten our belts, too, to get through this difficult time.

VAN SUSTEREN: But you have been quoted as saying that you want -- if the bill -- I assume the bill is going to get to the president's desk, but that he should veto it. Have you told him that?

BAYH: No, but I know they're aware of my views on the subject. And look, it's...

VAN SUSTEREN: How do you know that they know -- that they're aware of it?

BAYH: Well...

Watch Greta's interview with Sen. Bayh

VAN SUSTEREN: Because they watch TV or because you've...

(CROSSTALK)

BAYH: I know an opinion piece I wrote for one of (INAUDIBLE) publications, The Wall Street Journal, was given to some of the high-ranking people in the White House by some other folks, not by me. But I -- look, it's a tough spot for him. I was governor of my state, as you know. I actually had to veto our state budget one year, even though my own party had passed it in my House of Representatives. That was a hard thing to do.

VAN SUSTEREN: Well, why (INAUDIBLE) stop for a second. You say it's hard. I mean, there's so many earmarks in this. And I've gone back through what the president said in the lead-up to the election, and he said, you know, "Vote for change," and he's (INAUDIBLE) you know, he doesn't like earmarks, he doesn't like pork, he likes transparency. Then he calls this bill, which has over 8,000 earmarks in it -- he calls it last year's business. Is it last year's business?

BAYH: It's this year's money, Greta.

VAN SUSTEREN: So it's not last year's business.

BAYH: And it's -- and it's...

VAN SUSTEREN: Do you agree?

BAYH: No. It's this year's money and it's our children's future. But look, to be fair to the man, Congress is putting him in this position, OK? Congress...

VAN SUSTEREN: He's president!

BAYH: Well, let me finish. Congress is sticking in the 9,000 (SIC) earmarks. Congress is increasing spending many times the rate of inflation across the board. We should not do this to him. It's not fair to him, and I'll tell you why. He's sitting there in the Oval Office and he's thinking, I've got energy security, I've got health care, I've got the economy, I've got Iraq and Afghanistan. Do I really want to start a big fight with the people I'm going to need to get those things done over this bill?

Now, my advice is to him to, you know, draw a line and veto it, but I can see why he would reasonably say, You know what? This is a hard thing. I may have to hold my nose on this because these other things are just more important. But we should not put him in that place. It is wrong for Congress to do that to him!

VAN SUSTEREN: But he's got his choice. He can either say no to Congress or he can say no to the American people. I'm going to do exactly what I said, and I'm going to tell Congress, you know, You come back with a bill that really sense. This is this year's business, that's consistent with what I ran on and told the American people, and the truth is, is that, you know, the government isn't going to shut down. You know, we'll get another sort of stopgap bill. This is not the end of the world if we don't get this voted on, right?

BAYH: No, we're talking about just for the next seven months maintaining the current level of spending, just for seven months. Saves us $250 billion over the next 10 years.

VAN SUSTEREN: Not bad.

BAYH: I think that's what we ought to do. All I'm saying is that the man has -- the Congress is putting him in a very difficult balance because this is an important issue, but he's got all these other important issues that he's going to have to work with the supporters (ph) who want this bill on. It puts him in a terrible bind. And Congress shouldn't be doing that to him.

VAN SUSTEREN: So if he says no to Congress and vetoes it, what happens? I mean, why is that such a terrible thing to Congress if he sort of exerts his authority as president?

BAYH: Well, I'm sure he will, but he's got to pick his spots. He can't fight with Congress on everything. Otherwise, nothing gets done.

VAN SUSTEREN: Congress has an approval rate of very low. He's got a high one. I mean -- I mean, he's in the -- he's in the -- he's in the catbird seat on this. I mean, he's got -- (INAUDIBLE) tell the American people, you know, When I said change, when I said transparency, when I said no earmarks, when I said, you know, no pork, I -- I -- I meant it.

BAYH: Well, I think we'll get the best indication of that in the budget he's putting together we'll consider over the next couple months. But look, you're preaching to the choir. I...

VAN SUSTEREN: I know! I'm not...

(CROSSTALK)

BAYH: I think we should defeat this bill. I'm just saying that it is Congress that is putting him in a very difficult position, and if Congress exerted the kind of self-restraint that it should, we wouldn't even have to deal with this.

VAN SUSTEREN: Well, why won't Senator Reid? Why won't Speaker Pelosi? Why don't they see it that way?

BAYH: Well, as you know, I'm kind of an outlier in this, so you'd have to talk to them, but...

VAN SUSTEREN: I don't mean to make you my straight man for this, but...

BAYH: Well, you're asking me to make the argument that...

VAN SUSTEREN: For them. I understand.

BAYH: ... (INAUDIBLE) that I don't embrace, but I would -- I think I outlined some of it for you. There are some people who want more funding for these programs because they think it was too low under the Bush years and they view this as kind of, you know, catching up. Some people like the projects for their home state, and for them, that kind of tips the balance that way. And then some others, you know, just don't want to go against the grain because it's always hard to do that. And that's human nature, but from time to time, you have to do that.

VAN SUSTEREN: What are the people back in Indiana saying that are calling in to your office?

BAYH: Well, they liked the way I governed when I was governor, a fiscal pragmatist, some of the balanced budgets. I left the state with the largest budget surplus in our history and never raised taxes. So that's the way we like to do in Indiana. It's a little harder here in Washington, but I'm trying.

VAN SUSTEREN: Senator, thank you very much. Nice to see you, sir.

BAYH: Thank you, Greta.

(END VIDEO CLIP)

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