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

GRETA VAN SUSTEREN, FOX NEWS HOST: Former Speaker of the House Newt Gingrich goes "On the Record" from Mount Vernon, Virginia. Now, Speaker Gingrich and his wife, Callista, were in Virginia today, working on a new documentary, part two of their series "Rediscovering God in America." Moments ago, Speaker Gingrich went "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Mr. Speaker, Justice Souter has announced the -- or at least he hasn't announced, the president has confirmed that he's going to retire at the end of June. Your thought on that retirement?

FORMER SPEAKER OF THE HOUSE NEWT GINGRICH, R-GA: Well, I think he has been the greatest disappointment of any appointee by a Republican president in my lifetime. He clearly was nominated by President George H.W. Bush in the belief that he'd be a conservative, and he turned out consistently to vote with the liberal wing of the Court. So I suspect it'll be an interesting choice to see who President Obama picks, but I doubt if very many conservatives will mind him leaving.

VAN SUSTEREN: Well, there are a number of conservatives that have been added to the court since his appointment by President Bush 41, so it's not like the Court has been liberal. The conservatives must be happy with the way the Court's been the last...

(CROSSTALK)

NEWT GINGRICH: ... gradually been moving in the right direction. And of course, we now are going to have President Obama (INAUDIBLE) move back. But I agree with you that Souter actually is in the liberal wing of the Court, and therefore doesn't represent any ideological change if he departs.

VAN SUSTEREN: When he was appointed, though, before the Court went farther to the right, he didn't seem so liberal.

NEWT GINGRICH: Well...

VAN SUSTEREN: I mean, it's actually -- the Court has moved a little bit to the -- the Court has moved to the right. So suddenly, his position has -- he's -- he's been repositioned.

NEWT GINGRICH: But I think he was always more liberal than people claimed he would be. I think there was a sense when he was first nominated that Governor Sununu and others felt that he would be a solid conservative. And there was -- from the very opening weeks, it was clear that he, in fact, was not in any sense part of a reliable conservative vote.

VAN SUSTEREN: In light of the fact that the Senate is Democrat, and 59, 60-ish -- - it's hard to really tell these days with the Minnesota race still undetermined -- can President Obama essentially choose whoever he wants?

NEWT GINGRICH: Oh, I -- yes, within reason, he can. I think if he picks somebody who's, you know, totally incompetent or totally nuts, probably they wouldn't get through. But he -- he will have as wide latitude as any president in modern times to pick the person he wants to have on the Court.

Truth is, you know, Senator -- I mean, President Clinton basically got the people he wanted, too. And so I think the Court -- there's not been enormous resistance to an incumbent president, as long as they're not conservative. When they're conservative, it's much harder to get them approved.

VAN SUSTEREN: Unless you have a Republican conservative Senate.

NEWT GINGRICH: Well, but even then, it's more difficult to get a conservative approved than it is to get a liberal.

VAN SUSTEREN: Think that this is going to go to a woman? Should -- should we add another woman or add another minority? Got any thought on that?

NEWT GINGRICH: Look, I think President Obama is extraordinarily smart politically. I think he will intuit what would most consolidate his position, and I think that he may surprise all of us. In fact, I suspect he would like to surprise all of us.

VAN SUSTEREN: All right, Gitmo. There's news about Gitmo.

NEWT GINGRICH: Well, there's a report out that the administration's actually going to release people who've had terrorist training into the United States and then charge the American taxpayer to take care of those people so that they could have a transition into becoming American.

I think this is bizarre. If you have people who we decide to release, they ought to go back to their home country. Now, the problem with that is these particular folks I believe are from western China, and the Chinese will immediately arrest them because the Chinese think they're terrorists. And -- but the proposal that you and I and all the taxpayers of America should be paying to maintain folks we arrested as a terrorist to be out in the civilian population I think is, frankly, weird.

VAN SUSTEREN: So what can we do? I mean, in light of the fact that the president's made a decision that Gitmo is going to be shut down, I mean, what are our options?

NEWT GINGRICH: Well, first of all, we'll begin to learn, as everybody around the world says to the United States, Why would I take these people from you? They're dangerous. I mean, you know, the Germans and others have said, We don't want these people.

VAN SUSTEREN: Which is sort of interesting because I think there was one clip a short time ago when I think it was said that they aren't dangerous, that the ones we were going to send are safe, and they said, If they're safe, you keep them.

NEWT GINGRICH: Right. And I -- I just think -- I think we're suddenly learning the difference between campaigning, when you can have a great speech and great rhetoric and a great quip, and the reality of governing, where suddenly, it turns out most of the people at Guantanamo are really bad people.

VAN SUSTEREN: Michael Steele, head of the RNC -- how's he doing?

NEWT GINGRICH: I think he's doing all right. I think he's made a lot of waves. He's made some public relations mistakes. But I also think he's in the middle of a real power struggle over the Republican National Committee.

VAN SUSTEREN: Between who or among who?

NEWT GINGRICH: Well, I think some of the old guard, who didn't particularly want Steele to be chairman anyway, are now making noise in a way that isn't helpful to the Republican Party and it isn't helpful to anybody except themselves. And I think it's, frankly, fairly childish.

And I think that Chairman Steele deserves the opportunity to run the committee and to do his job, and I think that we ought to get on with it. They ought to be in the business of electing future Republicans, not in the business of bickering over the spoils of the RNC.

VAN SUSTEREN: Well, it looks rather grim that the -- looks like the Republican Party's having some pretty tough times.

NEWT GINGRICH: Look, I think we're going through the normal shakeout you go after when you lose a presidency. We -- we went through the shakeout in...

VAN SUSTEREN: But you don't have the House. You don't have the Senate. You don't have the White House. You don't have much.

NEWT GINGRICH: We're exactly where we were with Lyndon Johnson in '65.

VAN SUSTEREN: That's a long time ago!

NEWT GINGRICH: We're exactly where we were with Jimmy Carter in '77.

VAN SUSTEREN: Long time ago.

NEWT GINGRICH: We're exactly where we were with Bill Clinton in '93. And every single one of those times, we came back because the Democrats couldn't contain themselves and they overreached so grotesquely, people got so mad at them that they decided they didn't like high taxes, they didn't like high inflation, they didn't like high interest rates, they didn't like huge debt and they didn't trust big government. Now, if these guys do -- these guys are doing everything -- they're a cross of Jimmy Carter's foreign policy weakness and Lyndon Johnson's big government costs wrapped into one, with a very articulate, pleasant leader.

(END VIDEOTAPE)

VAN SUSTEREN: Up next, we'll have the Speaker's wife. We'll have more also with Speaker Gingrich. Do you have $100,000 lying around? According to the Speaker, you personally could end up paying that much more because of President Obama's spending spree. The Speaker will tell you himself.

Plus: Could Miss California be stripped of her crown? Carrie Prejean is publicly campaigning against gay marriage and is making lots of enemies. Will her activism cost her the title of Miss California? We will ask the California pageant director. That's coming up.

(COMMERCIAL BREAK)

VAN SUSTEREN: We continue with former speaker of the House Newt Gingrich from Mount Vernon. Now, the Speaker and his wife, Callista, were in Mount Vernon today, working on their new documentary, part two of their series "Rediscovering God in America."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: The president the other night at the press conference says, I want to disabuse people of this notion that somehow we enjoy meddling in the private sector.

NEWT GINGRICH: Well, then he is showing great discipline at doing things he doesn't enjoy because he is certainly meddling in the private sector on every front. I just testified on a bill in the House that proposes that the Department of Energy regulate jacuzzis. Now, the idea that you need the U.S. government micromanaging jacuzzis while it while it micromanages Chrysler, while it micromanages General Motors, while it micromanages CitiBank, while it micromanages AIG -- I mean, at some point, they're going to figure out downtown (ph) President Obama may be really, really smart, but the bureaucracy isn't. And they are overloading this bureaucracy with assignments they can't possibly do.

VAN SUSTEREN: All right, let me talk about Chrysler. Chrysler declared bankruptcy yesterday. Last fall, Chrysler got a bailout of $4 billion. Between last fall and the bankruptcy yesterday, was there any sign of improvement?

NEWT GINGRICH: Well, what the United Auto Workers can claim is that by getting the $4 billion, they got a lot better deal for the United Auto Workers.

VAN SUSTEREN: So essentially, the taxpayers didn't get anything out of that $4 billion.

NEWT GINGRICH: Look, I said at that time they were better off to let Chrysler go into bankruptcy months ago. They were better off to let General Motors go into bankrupt months ago. They would have been better off to let AIG go into bankruptcy.

This process of you and me taking our money and our children and grandchildren's money, throwing it into these huge corporations as though some Treasury bureaucrat knows more than the management of this company? These companies are in deep trouble, and handing them an extra $5 billion just means that it takes three extra months to go bankrupt.

VAN SUSTEREN: So now that they've declared bankruptcy, and there's some talk, at least speculation, they might be able to pull out of it -- August -- you think that's absurd?

NEWT GINGRICH: I have no way of knowing. I mean, I...

VAN SUSTEREN: If they do pull it out, that would be a good sign.

NEWT GINGRICH: First of all, they'll be much smaller as a company.

VAN SUSTEREN: Which is not necessarily bad.

NEWT GINGRICH: And they will have written off most of their debt.

VAN SUSTEREN: Written off, meaning?

NEWT GINGRICH: Meaning the people who believed in Chrysler and loaned Chrysler money...

(CROSSTALK)

VAN SUSTEREN: They're going to eat it.

NEWT GINGRICH: They took a...

VAN SUSTEREN: They're going to eat it.

NEWT GINGRICH: ... took a terrible beating. There will be a number of people whose retirement numbers was based on that kind of an investment and who thought Chrysler bonds were good. And they will all take a terrible beating.

VAN SUSTEREN: So what do we get out of this $4 billion and maybe some more money and...

NEWT GINGRICH: I think we get $4 billion in debt. I mean, if you are 20 years old today, you're going to spend probably $114,000 in extra taxes in your lifetime to pay the interest on the Obama debt -- not to pay off the debt, to pay the interest. What we have today and what you had last year under Bush -- this is bipartisan -- is you've had a bunch of politicians spending their credit cards as though nobody was ever going to send a bill. Now, when it's a 16-year-old, it's one thing. But when you watch, you know, 60-year-old political leaders wander around, waving their credit card as though there's never going to be a reckoning, there's never going to be anything come due -- this is pretty pathetic.

VAN SUSTEREN: So what -- if I were China and I'm buying up the American debt, at some point, as I'm watching from across the ocean, I think, This doesn't look like a good credit deal for me. Is there a chance China is going to say, No more, I'm not going to buy your debt?

NEWT GINGRICH: Sure. There's a chance, but the Chinese...

VAN SUSTEREN: It is small?

NEWT GINGRICH: Well, it's...

VAN SUSTEREN: Or is it big?

NEWT GINGRICH: It's small for this reason. The Chinese are desperate to sell us products, which keep their people employed. If they were to actually sell off our debt, the value of the dollar would go down radically. They wouldn't be able to sell their goods. They would have massive increases in unemployment. Now, they are trying to figure out a way to get out of this, but at the present time, they are in this box just as much as we are.

(END VIDEOTAPE)

VAN SUSTEREN: Speaker Gingrich wasn't the only reason we were in Mount Vernon today. We also wanted to talk to his wife, Callista.

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Callista, Mr. Speaker, nice to see both of you. Callista, first of all, where are we?

CALLISTA GINGRICH, WIFE OF NEWT GINGRICH: Well, we're at Mount Vernon in Alexandria, Virginia. And this, of course, was the home of our first president, George Washington.

VAN SUSTEREN: What brings both of you to Mount Vernon?

CALLISTA GINGRICH: Well, we're working on a new project, and it's a sequel to one of our first movies called "Rediscovering God in America." And we are taking a look this time at the beginning of our country at the Jamestown settlement through the American Revolutionary War, and then we stop at the Civil War. So we're looking at that timeframe.

VAN SUSTEREN: And how does this differ from the first movie on this, Mr. Speaker?

NEWT GINGRICH: Well, the first movie, "Rediscovering God in America, Part One" is really a walking tour of Washington and shows you how each monument relates back to the Founding Fathers and the presidents and their view of God. This really takes you back to the very beginning of your country, down in Cape Henry, Virginia, where the very first settlers, the first thing they did was erect a cross to thank God for having gotten across the Atlantic.

And then it carries you all the way up through Washington's time to Lincoln and the Civil War. And it really tries to give you a history of the relationship between the American people and their leaders and their view of God's role in their history.

VAN SUSTEREN: You know, it's sort of interesting. People know you, of course, as the former Speaker of the House. But you're really a history buff.

NEWT GINGRICH: Yes, well, I used to teach history. And I think both of us have this intrigue with how you tell stories and how you use modern media to tell these stories. And doing movies, as we have now with Dave and Kevin, has been fascinating. Vince Haley (ph) has helped us with all the basic research on the books that also back these up. But it is a fascinating experience to try to think to yourself, How can I, in 60 seconds, get you to feel Gettysburg and or get you to feel Mount Vernon so that you keep the audience paying attention?

VAN SUSTEREN: I just want you to tell where we are. This is such a spectacular view, only about what, 22 miles from D.C.?

CALLISTA GINGRICH: Right. We're on the banks of the Potomac River. And what a view President Washington had.

VAN SUSTEREN: He knew how to pick the right spots, didn't he.

CALLISTA GINGRICH: He sure did.

VAN SUSTEREN: He must've been really good in real estate.

CALLISTA GINGRICH: Yes. And you know, just to put in a plug for Mount Vernon, there's a tremendous education center here that recently opened. And so if you haven't been to Mount Vernon to see the new education center, it's worth the trip.

VAN SUSTEREN: You can see -- look at all the kids up here, young people coming to...

CALLISTA GINGRICH: Yes.

VAN SUSTEREN: ... go through the house.

CALLISTA GINGRICH: Right.

VAN SUSTEREN: Well, thank you both. And we look forward to the new movie, and then, of course, on to the other new movie.

CALLISTA GINGRICH: Thank you, Greta.

VAN SUSTEREN: This new movie won't be that new so long because you have your next project.

NEWT GINGRICH: We keep working at it.

VAN SUSTEREN: All right. Thank you both.

NEWT GINGRICH: Thank you.

CALLISTA GINGRICH: Thank you.

(END VIDEOTAPE)

VAN SUSTEREN: If you want to see our full interview and learn all about their movie about -- go to -- and hear the interview with Speaker Gingrich and Callista, go to GretaWire.com.




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