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

GRETA VAN SUSTEREN, FOX NEWS HOST: But first -- now, let's get this straight. This is what President Obama thinks should be done about government spending? It's the "pay as you go" proposal.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Congress can only spend a dollar if it saves a dollar elsewhere. Entitlement increases and tax cuts need to be paid for. They're not free, and borrowing to finance them is not a sustainable long-term policy. Paying for what you spend is basic common sense.

(END VIDEO CLIP)

VAN SUSTEREN: Wait a second. Did I hear that right? Can we hear that again?

(BEGIN VIDEO CLIP)

OBAMA: Paying for what you spend is a basic common sense.

(END VIDEO CLIP)

VAN SUSTEREN: Wow! That certainly sounds like a good plan, but isn't President Obama the spender-in-chief? Hasn't he been spending more than anyone else in Washington? We report, you decide. Joining us live is Steve Moore, senior economic writer for The Wall Street Journal. Is this the same president who...

(LAUGHTER)

VAN SUSTEREN: ... who -- who pushed that stimulus bill where we don't have the $800 billion, and now he -- what's going on here?

STEPHEN MOORE, WALL STREET JOURNAL, "THE END OF PROSPERITY" CO- AUTHOR: Yes, when the president made this announcement today, it almost was a laugh out loud moment. And when the president said we're going to start, you know, raising the money that we spend and we're not going to spend the money we don't have -- I mean, that's all we've been doing...

VAN SUSTEREN: I mean, am I...

MOORE: ... for six months!

VAN SUSTEREN: Am I missing something? I mean, I don't want to be sarcastic and be flip with the president, but when I heard this, I thought to myself, I must be missing something.

MOORE: Well, you're not missing something. I mean -- and by the way, this idea, "pay as you go" budgeting -- this actually dates back to when the Democrats took over Congress in 2007. And the Democrats had run for Congress saying, We're going to rebalance the budget. We're going to reinstall fiscal discipline in Washington. At that time, the federal budget deficit was $150 billion. Now we have a $1.80 trillion deficit. So the deficit's 15 times larger.

VAN SUSTEREN: Well, there's even a -- there's even (INAUDIBLE) ask you about that because there already exists a rule. Now, it isn't -- it isn't enforced in Congress, you pay as you go.

MOORE: Pay as you go.

VAN SUSTEREN: That already exists. So what was the point of coming out and saying, you know, We're -- we're going to now make this a law?

MOORE: Well, I'll tell you what the point of this is, that President Obama can read the opinion polls, and he is seeing what we've been talking about every night, which is the American people are absolutely incensed about the debt that's going on in this country. And so now President Obama is trying to sound like a born-again deficit hawk. I don't think he's going to be able to carry it off. He's got that -- he still has $600 billion he hasn't spent that he didn't pay for out of the stimulus bill. And while he's talking about being fiscally responsible on the budget, Greta, what's going on in Congress right now? What is he pushing? A trillion-dollar health care plan that he doesn't know how to pay for!

VAN SUSTEREN: All right, let's go back to this stimulus bill because I'm trying to understand what -- in all fairness to the president, I'm trying to understand this. When he pushed Congress to come up with the stimulus bill, this $800 billion...

MOORE: Right.

VAN SUSTEREN: ... did we have a...

(CROSSTALK)

VAN SUSTEREN: Did we have it in the bank, that money?

MOORE: No.

(LAUGHTER)

VAN SUSTEREN: OK, so...

(CROSSTALK)

MOORE: ... all debt.

VAN SUSTEREN: So that clearly was spending what we didn't have.

MOORE: That was a violation of...

(CROSSTALK)

(LAUGHTER)

VAN SUSTEREN: OK, so that was in February. Now we are into June...

MOORE: That's right.

VAN SUSTEREN: ... and he suddenly sees the light and says it's going to be pay as you go.

MOORE: That's right. And by the way, in the meantime, we also passed a budget for the 10-year period that increases the debt by $9 trillion. That's $9 trillion we're not going to pay for. And as I just mentioned, there's also another trillion dollars of health care reform legislation over the next 10 years. That's not paid for. So where is the "pay as you go"? What are we going to -- we're not paying for anything in Washington!

VAN SUSTEREN: I keep coming back to the same thing. I don't get it.

MOORE: Well, this...

VAN SUSTEREN: I mean, I...

(CROSSTALK)

VAN SUSTEREN: Honestly...

MOORE: Right.

VAN SUSTEREN: ... of all the things he could have done, for him to come out and do this -- there's got to -- I must be missing something because it seems so preposterous. I mean, it seems so -- so unbelievable. I mean -- I mean, he didn't have to come out and say this today.

MOORE: No, I think that they're getting very nervous at the White House about the backlash against the budget...

VAN SUSTEREN: Well, you don't want to look silly!

MOORE: ... and the deficit -- he does look silly.

(CROSSTALK)

VAN SUSTEREN: I can understand being nervous, but do you want to look silly, to come out and say, Look, I think it's about time that you only spend what you have...

MOORE: Right.

VAN SUSTEREN: ... after -- after he pushed the other.

MOORE: That's right.

VAN SUSTEREN: Now, it may be smart...

(CROSSTALK)

MOORE: There is a big credibility problem here, and I think the problem is, you really have to wonder, does the president really mean what he says? I mean, this is one of those moments where (INAUDIBLE) wait a minute, he's saying one thing, at the same time, everything that's going on in terms of the budget is violating -- over the last -- now, this -- again, this pre-dates President Obama. Since Nancy Pelosi became Speaker, they have had this pay-as-you-go rule that you were talking about, and they have violated it...

VAN SUSTEREN: But even...

MOORE: ... to the tune of over a trillion dollars!

VAN SUSTEREN: But even if they didn't have it, Steve, the fact that he said in February, We're going to borrow $800 billion to stimulate the economy -- whether it's a good idea or a bad idea, whatever it is, we didn't have the $800 billion...

MOORE: That's right.

VAN SUSTEREN: ... and for him now to come out today and say, We're only going to spend what we have, makes him look silly. At least -- unless -- unless...

MOORE: I couldn't agree more.

VAN SUSTEREN: ... I'm totally -- unless I'm totally missing something. And the last thing I would think he would want to do is look silly on that.

MOORE: Well, he looks...

(LAUGHTER)

MOORE: You couldn't -- you know, I completely agree. He looks silly. And he also looks insincere, in my opinion. I think most people who follow what's going on every day in the halls of Congress and with this budget, they understand that all we've been doing for the last six months is violating the very principle that you pay for what you spend. We're not -- we haven't cut a single program. We have not -- not one program in the entire federal budget, and there are thousands of them, have been cut to pay for the spending we're doing!

VAN SUSTEREN: All right, how much of that $800 billion -- what's the latest number? How much...

MOORE: There's being spent about $50 billion of it. So there's still...

VAN SUSTEREN: What's -- how much -- what percentage, then?

MOORE: So that's about 5 percent of the money that's been spent.

VAN SUSTEREN: Well, here's the thing that slays me, is if we've only spent 5 percent, these were supposedly shovel-ready projects...

(LAUGHTER)

VAN SUSTEREN: ... in February, and it was such a huge rush that it be -- that it be passed...

MOORE: Right.

VAN SUSTEREN: ... before anyone had time to read it, and we even dragged a congressman back from his mother's funeral...

MOORE: That's right.

VAN SUSTEREN: ... to vote -- I mean, if there was a such a huge rush, why has only 5 percent been dispensed?

MOORE: That is another question that the Obama administration cannot answer. After all, this was supposed to be a huge rush. We had to pass it in 24 hours. Most congressmen (INAUDIBLE) today -- Mark Kirk, who actually did read that budget, but he was about the only one in the entire Congress who read it. And I think -- you know, I think they should have a rule that you can't pass a law until you've actually read what the law says.

VAN SUSTEREN: I don't know. I mean, I figure there's got to be some explanation. I must just not be -- I must be...

MOORE: There is no explanation!

(LAUGHTER)

VAN SUSTEREN: I figure I got to be missing this one! Anyway, Steve, thank you very much.

MOORE: Thank you.




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