This is a rush transcript from "On the Record," December 14, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Democratic United States senator Evan Bayh is not the most popular guy with his fellow Democrats, at least not tonight. Yesterday Senator Bayh crossed over, went against his fellow Democrats. He voted against a $447 billion omnibus spending bill that passed the Senate. Now, Senator Bayh is calling for President Obama to veto that bill. Is he getting dirty looks in the hall of the Senate? Well, we went to Capitol Hill, and Senator Evan Bayh went On the Record."

(BEGIN VIDEOTAPE)

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

SEN. EVAN BAYH, D - IN.: Good to see you, Greta.

VAN SUSTEREN: Senator, it sounds like you're taking on your party. You've urged the president to veto at least the current spending bill.

BAYH: Well, I'm taking on overspending in Washington, Greta. That's true. But when I was governor of my state, I had to veto a bill one year that I thought was going to bust the budget, and we just can't afford to keep doing this economically. It's going to damage the country. And more than that, it gives people a reason to be so cynical about Washington. They're making economies and cutback in their daily lives, and here we have 5,000 earmarked pork barrel projects in this bill. It makes Congress look like it's just immune from the struggles that most Americans have, and that's just not right.

VAN SUSTEREN: Well, it doesn't seem like you've got a lot of support in your party. You certainly have some, like Senator Feingold from the great state of Wisconsin, I might add, my state, and a few others. But why aren't many of the other sort of Democratic senators saying, Look, we can't raise this -- this deficit ceiling?

BAYH: Well, it's hard for me to answer that. I think for some of them, it's they don't pay as much attention to the deficit. They just don't focus on economics. For some others, there are projects in the bill that the like, they think will help their home states and their home districts.

But for me, I just feel profoundly that this is bad for the country. It's irresponsible for our children. And it feeds into the cynicism about Washington that, regrettably, is justified when we do pass bills like this. So that's why I voted no.

VAN SUSTEREN: Well, see, the interesting thing, at least from my perspective -- it seems like there's sort of a gun to many of your heads because it might be attached, like, to a defense spending bill. So if you vote against raising the deficit, which is attached to this defense spending bill, it looks like you don't want to help our troops. Looks like you're a bad person.

BAYH: Well, they do confront you with this sort of devil's choice of either voting for a lot of this overspending or looking as if you're irresponsible for not voting for the, you know, amount of spending that is justified, like supporting the troops. But you know, my approach is vote to get the bad stuff out. Vote to get the spending levels down. It's four times the rate of inflation, for God's sake! I mean, you could cut it in half and still be providing generous increases for the government. So don't let them play those games. Do what you think is right. Hold the line on spending. Believe me, Greta, they'll come back.

VAN SUSTEREN: All right, you would like at least -- from what I've pieced together, you'd like some sort of fiscal commission to sort of put the lid on it, that you'd be willing to sort of do a 60-day raise the deficit level, but you want a fiscal commission to police this.

BAYH: Well, unfortunately, when it comes to spending, Congress is just broken. And...

VAN SUSTEREN: Broken or ignorant or unwilling or self-serving, or what's the word?

BAYH: Well, you know, maybe some of all of the above. But for whatever reason, we can't keep going on like this. And so the same old thing, the same people doing the same thing isn't going to work. So we've got to create a new structure, take it out of the hands of Congress, have them make recommendations to get the deficit down, to get spending under control, and then force Congress to have an up-or-down vote -- no filibusters, no amendment. Are you for a fiscally responsible path or not? And then let the American people decide.

VAN SUSTEREN: Well, the interesting thing about your commission is what you're saying (INAUDIBLE) Congress won't do it. The Senate won't do it. They won't do their jobs to be fiscally responsible, so now let's create another commission to do it. And you're getting resistance within your own -- I assume within the leadership here, and I guess the president doesn't want this commission.

BAYH: Well, the president actually is open-minded. But we're getting resistance from people who feel that their jurisdictional prerogatives are being, you know, infringed, committee chairmen, people like that. And then there are some people, Greta, who it just doesn't matter, philosophy or what have you, you know, support this kind of spending.

But eventually, the credit marks will react. Eventually, our dollar will go down. Interest rates will go up. The economy will be badly hurt. And at that point, the remedial action that will be required will be much, much more difficult.

I'll just give you an example of what can happen. Look at Greece. They elected a new socialist government, wanting to come in and expand spending dramatically. Their credit markets rebelled because their deficit is so large. And now even the socialists in Greece are being forced to put into place dramatic cuts. You can't keep going on like this forever, and the American people deserve something better than just allowing that kind of calamity to take place.

VAN SUSTEREN: All right, the deficits (INAUDIBLE) we're talking about is for fiscal year beginning two months ago, October 1st, right?

BAYH: Correct.

VAN SUSTEREN: So you really can't say this a Republican Senate issue, right, or a Republican House issue? This is -- this is now your party's issue.

BAYH: Well, you know, all of us who are in charge bear some Republicans. I will say -- and even thoughtful Republicans will say -- that when they were in charge, they didn't do a good enough job...

VAN SUSTEREN: I...

BAYH: ... keeping...

VAN SUSTEREN: I agree! I mean, we wouldn't be in this mess if everybody did (INAUDIBLE)

BAYH: If you look at the bill that passed the other night, there were three Democrats who voted no -- myself, Senator Feingold and Senator McCaskill. The only way it passed was they were able to convince three Republicans to go along. So there are only three of them. My point is, this is a bipartisan problem. Both parties bear Republican. We got to get away from that and focus on getting this under control. I don't think business as usual will get that done. That's why I'm for this approach.

VAN SUSTEREN: If the Republicans were in power, I'd be posing the same questions to Republicans, but you got a Democratic Senate, a Democratic House and a Democratic Senate (SIC). And we've got -- you know, we're talking about increasing the deficit level, so you know -- and you can't get a bipartisan commission together to police it. The Senate won't do it itself. The president seems unwilling to veto a spending bill, so it looks rather bleak in terms of our financial -- I mean, that's not the way you can run a household.

BAYH: Well, no, it's not, and I'm frankly kind of disappointed by how all this has happened. But I do think the president is going to be taking this up next year. I personally think we ought to, you know, draw the line right now. But I think there is some hope for a little bit different approach next year.

VAN SUSTEREN: So do you get bad-vibed in the halls as you walk down as being one of the three who's, like, you know, bucking the party on this?

BAYH: Well, there's some peer pressure and that kind of thing. You know, I asked for no earmarks this year because I knew that doing what I thought was right and voting against these spending bills would mean that I wasn't going to get anything like that. And they do tend to look at you, like, What's wrong with you? Why won't you go along? Aren't you sort of a team player? But you know, we all like to be liked. That's human nature. But we took an oath to do what we think is right, regardless of whether that makes us popular with our colleagues or not. So that's what I'm trying to do.

VAN SUSTEREN: Senator, thank you, sir.

BAYH: Thank you, Greta.

(END VIDEOTAPE)

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