This is a rush transcript from "On the Record ," April 1, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Remember Senator Judd Gregg, the Republican senator nominated by President Obama to be his Commerce secretary? Well, that blew up. Senator Gregg pulled out. And now Senator Gregg is speaking out. He says President Obama is moving our country, quote, "sharply to the left."

Moments ago, Senator Judd Gregg went "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Let me ask you a couple of quick questions. You wrote that President Obama is taking the country sharply to the left.

SEN. JUDD GREGG (R), NEW HAMPSHIRE: There's no question about that. He has admitted to that. He basically says that the way you create prosperity is by significantly expanding the size of government. He's proposed to do exactly that, taking the size of government as a percentage of our national product from 20 percent up to 23, 24, 25 percent, which is a really huge expansion in the size of the government.

VAN SUSTEREN: I guess I'm surprised that anybody's surprised. I mean, I sort of thought that is what he -- you know, in all that he said in the run-up to the election, if you look at his philosophy when he was campaigning, you know, that he believed that, you know, that this was, you know, the way we resolve problems, that the government takes care of people. And we have this horrible economic crisis. So while people may disagree, I don't understand the surprise.

GREGG: I think in the short term, nobody's arguing about the need to spend money to get the -- float the economy. But it's this long-term issue, the fact that he's basically saying that you create prosperity by really growing the government. Well, you don't do it that way. You create prosperity by having an affordable government that our children can afford and it doesn't put so much debt on their back that they can't afford the interest and the cost of that debt.

And I think most people presumed that when he was going to expand the government, yes, that's what he was going to do. And I think they also, also presumed he was going to do it in a responsible way, not by creating this massive debt.

VAN SUSTEREN: Irresponsible?

GREGG: I don't think it's responsible. I think it ends up throwing our kids in to a position where their chances of having a better life is very much limited by the cost of the government that they'll have to bear.

VAN SUSTEREN: So irresponsible.

GREGG: That's a good word.

VAN SUSTEREN: All right. You had agreed to be his secretary of Commerce, and then that didn't quite -- you pulled out. Why did you agree, if you saw this sort of on the horizon that you have such a difference in policy?

GREGG: Well, that's a question I've been asking myself. I mean, it was my fault. I should have seen it coming. And you know, I've been my own person for 30 years. I should have recognized it would have been very difficult for me to be in a cabinet, be 100 percent -- 100 percent (INAUDIBLE) with the president, which is what I needed to be if I was going to be in his cabinet, recognized that I had these deep philosophical differences on the issue of spending.

VAN SUSTEREN: All right, if you're sitting back at home in New Hampshire tonight, watching this, and you hear all these numbers -- and these numbers are grand -- you hear deficit, you hear debt, I mean, trillions (INAUDIBLE) how does this -- as a practical matter, does it any way affect someone's day-to-day life right now in New Hampshire, your constituents?

GREGG: Of course, it affects everybody's life because...

VAN SUSTEREN: But how?

Watch Greta's interview with Sen. Judd Gregg

GREGG: Well, because the government has to borrow money to fund itself. And when it borrows money, somebody has to pay for it. This isn't a free lunch exercise, you know? Every household in America, after the Obama budget has run out its term, will have $132,000 of debt on it. That's more than a lot of people's mortgage, and they'll have a $6,000 annual interest payment on that house, on themselves, to pay for the debt. And that's more than a lot of people's mortgage payments. So it's big money. It's big money and it's going to affect every American.

VAN SUSTEREN: If you have a private little conversation with the president, you have just a minute with him, what are you going to -- what would you like to say to him?

GREGG: What happened to the fiscal discipline in the out years, you know? I think he's aware of this problem, but I think what they've decided down there is that they want to get all of this done quickly, while they've got the political capital. And they're really not looking past the five- year window or the four-year window. They're looking at tomorrow and the next day and putting these programs in place.

And my question -- and it has been -- would be very simply, you know, What about five years from now, eight, ten, fifteen years from now, when these programs come back to roost and we really don't have any way to pay for them?

VAN SUSTEREN: GM. What's should happen to GM?

GREGG: It should be reorganized aggressively. The debt holders should take a huge haircut.

VAN SUSTEREN: By the government, though, or by a bankruptcy court?

GREGG: The government could help force it, but I don't think you can do it in anything other than bankruptcy court because the unions aren't willing to come to the table in any other format.

VAN SUSTEREN: So if we were talking about GM a month from now, or it's actually 60 days from now, do you think it'll be in bankruptcy?

GREGG: I don't know. I don't know. I'm not sure this administration will allow it to go into bankruptcy because they've got a commitment there to some of the interests stakeholders that is pretty deep.

VAN SUSTEREN: Meaning the unions.

GREGG: Right.

VAN SUSTEREN: Well, but that -- if they don't do that, if it doesn't get pushed into bankruptcy and there's no market improvement -- and there wasn't any at least so far, the $17.4 billion that they already got, we haven't seen improvement, maybe it's too early -- but that means we're going to have to finance it.

GREGG: Yes.

VAN SUSTEREN: Where are we going to get that?

GREGG: Going to borrow it from our kids.

VAN SUSTEREN: So that's going to add on top of the other...

GREGG: Of course. Yes.

(END VIDEOTAPE)





Content and Programming Copyright 2009 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2009 CQ Transcriptions, LLC, 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 CQ Transcriptions, LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.