This is a rush transcript from "On the Record," August 31, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Former Vice President Dick Cheney slams President Obama, big-time slams! Attorney General Eric Holder's investigating the CIA, looking into whether Bush administration CIA interrogators broke the law. So what does former vice president Dick Cheney think about that? This is what he said on "FOX News Sunday."

(BEGIN VIDEOTAPE)

DICK CHENEY, FORMER VICE PRESIDENT: I think it's a terrible decision. President Obama made the announcement some weeks ago that this would not happen, that his administration would not go back and look at or try to prosecute CIA personnel. And the effort now is based upon the inspector general's report that was sent to the Justice Department five years ago. It was completely reviewed by the Justice Department in years past. Now we've got a political appointee coming back, and supposedly without the approval of the president, going to do a complete review or another complete investigation, possible prosecution of CIA personnel. We could talk the whole program about the negative consequences of that.

(END VIDEOTAPE)

VAN SUSTEREN: Joining us is Liz Cheney. She was the deputy assistant secretary of state during the Bush administration, and of course, is the daughter of the former vice president. Nice to see you, Liz.

LIZ CHENEY, DICK CHENEY'S DAUGHTER: Thanks, Greta. Great to be here.

VAN SUSTEREN: First of all, boy, your father -- he's bold! He's not afraid!

CHENEY: Well, no, he's not afraid. But he feels very strongly about this. He feels very strongly that these policies, now we've seen with the documents being released that, in fact, this program did yield intelligence that prevented attacks and helped us to save American lives, and he feels very strongly that the path the administration is now going down, threatening investigation, obviously, and potential prosecution, is a dangerous one and is wrong.

VAN SUSTEREN: Let me play devil's advocate with you. Suppose that there is another investigation. It looks like there is. And suppose that it goes through and they find that everything that was done, all of the interrogation, was within that which was directed by President Bush, and it turns out that the -- nobody stepped over that which President Bush laid out. Does that not sort of -- you know, doesn't that empower the CIA?

CHENEY: The problem is what happens in the meantime. And in the meantime, you've got a situation where these people that we really need to have focused on, you know, items like A.Q. Khan now having all restrictions lifted on him in Pakistan, the man responsible for nuclear proliferation to some of the world's worst terror-sponsoring nations, you had the United Arab Emirates just intercept a ship bound from North Korea for Iran full of munitions -- it's a dangerous world, and we need the CIA official focused on that.

Instead, we've got a war between the Department of Justice, it seems, and the CIA. And even if the investigation ends up without prosecution, in the near term, you're going to have CIA officials having to hire lawyers, having to worry about protecting themselves at a time when, you know, they kept the nation safe and they ought to be focused on their job.

VAN SUSTEREN: In terms of the current administration, is -- does -- does your father, and maybe you, too -- do you think that they just have a different strategy or that they're weak?

CHENEY: I think that they are doing everything they can to appease the left wing of their party, the base of the Democratic Party.

VAN SUSTEREN: So it's political.

CHENEY: Clearly political. And I think they also have a very different understanding about the world in which we live. And so I think that when you look at a situation in which we're a nation at war, and in addition to announcing this investigation, they've also now moved the interrogations out of the CIA, it seems into the White House, although over the last 48 hours, we've had a variety of different answers about who's really going to be running interrogations now for the United States. That's a critically important issue, and they handled it in many ways reminiscent of the way they handled the Guantanamo decision, where they make a major announcement without really being prepared for, you know, how they're going to handle the situation.

VAN SUSTEREN: Switch gears. Health care reform. What do you think?

CHENEY: Well, you know, I -- I think that the White House has got a real problem. I think that they have put the president out there, and he's got a lot of rhetoric about being able to keep your own insurance and about costs going down, and the American people are seeing that the reality doesn't match that rhetoric and you're seeing the response in the town halls. People are very concerned, and I think that they're going to have to make a tough choice here about whether they're going to ram something through that's not good for the nation, it's not good for the American people, with only Democratic votes. And if they do that, I think there'll be a pretty significant price to pay.

VAN SUSTEREN: You know, I have a different view of this, is, like you said, the reality -- I don't know how we can have a reality because this bill is just so confusing! I don't have a clue what -- I know sort of general princes (ph) but what they want, but I'm not even sure that anything that's proposed in there -- first of all, you can't figure it out -- if (INAUDIBLE) carried out to what cost. I mean, it is the most -- I mean, we're fighting about something that's -- it's strange because it's -- it's incomprehensible!

CHENEY: But the problem is, the president is trying to push this legislation through. Now, he's...

VAN SUSTEREN: Which is -- I -- I agree!

CHENEY: ... doing it by saying, Not my bill, in the same way he seems to be saying is, Not my interrogations and not my investigation. But he's the commander-in-chief. He's the president, so...

VAN SUSTEREN: And he said at a town hall meeting that he'll go line by line when Congress gets back to go through it. And I -- I hope that they go line by line through it because when they finally sit down and actually read it, maybe they'll have a different view on whether this is a bill that they want (INAUDIBLE)

CHENEY: But in the meantime, he ought to stop making assertions about what is going to happen when this reform is passed before he's actually read any of the legislation.

VAN SUSTEREN: I think they all need to do some reading (INAUDIBLE)

CHENEY: I'm with you on that!

(LAUGHTER)

VAN SUSTEREN: Anyway, Liz, thank you.

CHENEY: Thanks, Greta. Great to be with you.


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