This is a rush transcript from "On the Record," September 17, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Has Congress been cornered? Can Congress no longer look the other way and pretend nothing is happening? You've seen the videos, undercover tape of ACORN workers giving advice about tax evasion and child prostitution to a filmmaker and his associates posing as a pimp and a prostitute.

Well, today, by a vote of 345 to 75, the House voted to withhold all funding to ACORN. Meanwhile, by a vote of 85 to 11, the Senate approved an amendment that blocks funding to ACORN connected to the Interior Department. A Republican senator has also offered a bill to permanently ban ACORN from receiving federal funds. Sixteen Republican senators co- sponsored that bill.

And also today, Republican senator John Cornyn sent a letter signed by 27 other Republicans senators to Senate majority leader Harry Reid. What's in the letter? The Republican senators are asking Senate Majority Leader Reid to hold hearings and investigate ACORN. Yes, the heat is on.

Senator Lindsey Graham joins us live to talk about that and much more. Senator Graham, ACORN -- are there going to be hearings?

SEN. LINDSEY GRAHAM, R - S.C.: Well, I hope there are hearings and I hope we'll stop the funding. How do you look the average American taxpayer in the eye and say, This is a good use of your money?

VAN SUSTEREN: Good question. How do you do that? I mean, and -- and what -- and here's the other question. What took you so long? Why did it take, essentially, two kids with a handicam?

GRAHAM: Well, I think a lot of us have been pushing regulating ACORN since the election. You know, I was all over the country helping John McCain, and one state after another was investigating ACORN for voter registration fraud. Now you have these latest videos, and I think it's sort of the straw that broke the camel's back, the videos that we've seen.

And 85 votes are hard to come by in the Senate. It takes an unusual event to get 85 senators to agree, but ACORN's been able to bring the Senate together. Congratulations.

VAN SUSTEREN: But the other -- the other vote earlier in the week had seven Democratic senators voting on the side of ACORN on another issue, seven, including Senator Durbin, who's in the Democratic leadership!

GRAHAM: Well, I never question senators' motives. Senator Durbin (ph) and Bayh (ph) both told me that. They voted. They're going to own their vote. I own mine. There -- I'm sure ACORN has probably done some good things. But how in the world can you look the American taxpayer in the eye and say -- we're in a recession. A lot of people lost their jobs. We've got deficits as far as the eye can see. There are a lot of needs out there. How could you put ACORN ahead of a lot of things that are really needed in America? And that's why you got 85 senators saying cut off the money.

VAN SUSTEREN: And so does that mean -- with the 85 senators who say cut off the money, does that mean that Senator Reid really has no choice but to order hearings? I mean, he has the power not to, but...

GRAHAM: I think it's unsustainable for any member of Congress to justify the continued funding of this organization. And if the president were wise, he would jump in and say to the American people, This is not the change I had in mind. This organization doesn't represent the best values of the country.

Even they may do some good things, clearly, their practices are corrupt. They are being investigated criminally throughout the country. Now you have this video. So I think it'd be smart for the president to stand up and say, This needs to stop. Cut off their money.

VAN SUSTEREN: How fast can hearings be ordered?

GRAHAM: Well, I think as fast -- you know, the politicians react to headlines. they react to what FOX has been doing. And what you've been able to do is confirm that what we saw in the election, that this organization has lost its way. It's not connected to any real value system that the American people'd want their taxpayers (SIC) used to support. And not only is it signing up people like Mickey Mouse to register to vote, now you've really got counseling going on for some of the worst behavior in the world. So the end of ACORN is near.

VAN SUSTEREN: Yes, but the -- but the oldest trick in the book is postpone, postpone, postpone...

(CROSSTALK)

VAN SUSTEREN: Can Senator Reid just keep postponing it, saying, yes, I want hearings, but...

GRAHAM: If he can knock FOX off of the air maybe!

(LAUGHTER)

VAN SUSTEREN: All right. Well, that's not happening.

GRAHAM: No, I don't think so, either.

VAN SUSTEREN: All right, health care. What's the -- what's the latest on health care?

GRAHAM: This is the second bill to come out. Bipartisanship does exist. People bipartisanly hate it! I mean, you've got Democrats saying they can't support the bill because it taxes union health care plans, 35 percent tax on the health care plan.

It's called a Cadillac plan. It has $500 billion cuts in Medicare, taking money from seniors to pay for people who don't have insurance. It's just not going to go anywhere.

And I appreciate Senator Baucus for trying to, you know, bring a solution to the table, but the way he's done it, the $800 billion-plus price tag and the way they try to pay for it by $340 billion of new taxes when we're in a recession. And cutting money out of Medicare to give it to people who don't have insurance, who could get insurance some other way, is not going to sell. So I don't see it going anywhere.

VAN SUSTEREN: All right. The latest -- the news today about the missile defense shield. You had some rather salty words about that decision.

GRAHAM: Well, you know, I'm trying to -- you know, I really do want to help the president where I can. But we live in dangerous times. I don't know about the AP report, but I know this. The Iranians are trying to get a nuclear weapon, not a commercial reactor to produce power. But they want a nuclear bomb and they want to be able to deliver that weapon to intimidate their neighbors and the world at large.

This missile defense program that was going to be based in Poland and the Czech Republic would be able to knock down, in theory, a rogue attack from the Mideast against Europe and our troops stationed in Europe. The Russians have been demagoguing this. It's not aimed at the Russians. And the Russians have really been trying to intimidate their neighbors, like Poland, the Czech Republic, Ukraine and Georgia.

Putin's up to no good. And giving in to his demagoguery and backing out of a promise you made to the Poles and the Czech Republic is not only going to empower Putin, it's going to make people in that region think you can't count on America anymore. This is the worst thing the president could have done regarding future Russian relationships and it's the worst thing he could have done to our allies. Poland and the Czech Republic have soldiers in Afghanistan and Iraq, and we left them hanging today.

VAN SUSTEREN: Senator, thank you, sir. Always nice to see you.

GRAHAM: Thank you. God bless.


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