This is a rush transcript from "On the Record," January 21, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: The Massachusetts stunner changed everything. Democrats are scrambling, trying to figure out what to do. And the big question is, Now what? Democratic senator Bob Casey went "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Senator, nice to see you

SEN. BOB CASEY, D - PENN.: Greta, great to be with you. Thank you.

VAN SUSTEREN: You want to tell us what that is?

CASEY: It's a great Capitol.

VAN SUSTEREN: Isn't it -- beautiful, isn't it.

CASEY: It really is.

VAN SUSTEREN: I start most of my interviews up here because I'm always in awe because it's so gorgeous up here.

CASEY: It's a wonderful view. We're grateful that we're here.

VAN SUSTEREN: You have a new member in the club -- on the other side of the aisle, but nonetheless, U.S. Senate.

CASEY: Yes.

VAN SUSTEREN: Shocker?

CASEY: It was surprising. I don't think there's anyone even in Washington with all the politics of Washington that could have predicted it. But there's a message in an election like that, and I think the main message dealt with the economy and both the frustration about the pace of job growth, not nearly fast enough for most Americans, and also the perception that Washington isn't listening. And we've got to be responsive to that, and I think we will be.

VAN SUSTEREN: Well, why did it take that because, you know, there has been a lot of dissension? I mean, we see people who aren't necessarily -- I don't know if there's such a thing as a typical protester, but you've seen people in these town hall meetings being very upset. So it's -- it's not like -- you know, for those who say it's a wake-up call now, it's sort of, like, I'm thinking to myself, Well, this has been coming.

CASEY: Well, part of it -- I think part of it is when you're concentrated, as we were, and I know I was in the Senate, and many others, on health care for an extended period of time, the way this place tends to work is it's hard to get other -- other important priorities into the conversation. And if we're not talking about an issue, I think it leads to the impression -- I think it's inaccurate often, but the impression that we're not moving fast enough on job creation.

So we -- I think we have to both focus on it substantively, and I would argue we've got to pass very strategic short-term policies that will have an impact, a positive impact on jobs, like a job creation tax credit. That's my idea, and some others'.

But we also have to speak to the issues, speak to what I think a lot of Americans are living through, which is a horrific recession. In our state for example, we've got over 8 percent unemployed, not nearly as high a rate as some states, but that means over half a million people are out of work. And we've got to be responsive to the real insecurity that that brings to people in terms of their own family, their own lives, their own incomes.

VAN SUSTEREN: Would you say that the stimulus bill of last February has had its effect in your state, its intended effect, or are you disappointed in it?

CASEY: Well, disappointed it's not moving fast enough. So part of the strategy, I think, has to be not just having new job creation policies on the table and get them enacted into law, but also push the recovery bill faster.

We've seen a lot of very positive results, but sometimes, if the perception doesn't match the reality, it doesn't really matter what the reality is. We have to convince Americans that we're serious about job creation strategies even as we're pushing the recovery bill to be fully implemented. A lot of the spending, a lot of the jump-starting effect, will take place in the latter half of 2010. So we got a ways to go on it.

VAN SUSTEREN: Did I hear you say in the beginning, before we started to talk, that you thought we'd have to have some tax cut for businesses? Did I...

CASEY: Well, a tax credit.

VAN SUSTEREN: Tax credit.

CASEY: Here's my idea how it would work. If you're -- we the dividing line we made are 100 employees or less, so -- even though that's not usually thought of as a small business. But if you've got 100 employees or less, under my bill, you would be eligible for a 20 percent tax credit, comparing one quarter in, say, 2010 with the corresponding quarter in 2009. It's a one-year bill meant to start job creation very quickly. I think it's one of a series of things we should do to create jobs.

VAN SUSTEREN: Do -- would you like -- do you wish you could have sort of a do-over on the stimulus bill and do more of the tax credit-type process than do the stimulus bill-type?

CASEY: Well...

VAN SUSTEREN: Would you like a do-over a little bit?

CASEY: Parts of it. Parts of it. The recovery bill had features that were both tied to recovery, getting the economy out of the ditch, but also, the second word of the bill was reinvestment, investing in longer- term strategies. Infrastructure spending, in my judgment, wasn't enough. We wanted more and we didn't get it.

There was a huge tax cut in that -- in that legislation. Ninety-five percent of the American people a tax cut. I'm not sure they remember that, and that's relevant because when people don't have a sense that there's enough, that leads to a confidence deficit.

But sure, there's a lot of things about the recovery bill we would do differently. But I think, overall, it was the right bill at the right time. It's had a jump-starting effect, but not enough to get the unemployment rate below 10, and that really becomes the marker. If we can get the unemployment rate below 10 and moving in the other direction, it'll help a lot.

VAN SUSTEREN: One of the problems with the stimulus bill, one of the risks, is that you -- you use it to pay payroll, and that when the money is spent, you haven't necessarily created more jobs, and so your -- the unemployment rate is not going to decline. In fact, it may even go up. Are you satisfied that that has not happened, or do you see that as a continued risk, that you're going to -- we're going to run out of stimulus money, and all we've done is make payroll and not created jobs?

CASEY: Well, there is a risk that at the end, it won't have the effect that we had hoped it would. I really believe, though, based upon what I've seen in Pennsylvania, as well as other places, but in particular in our state, the spending that will take place in 2010 will have a tremendously positive effect, in addition to what's already happened. But in addition to that, I think we need strategies that are more short-term and more focused, more like a rifle shot, in a sense, to create jobs, to give small businesses a chance to have the benefit of a tax credit.

VAN SUSTEREN: Senator, thank you, sir.

CASEY: Greta, great to be with you.

VAN SUSTEREN: Nice to see you.

CASEY: Thank you.

(END VIDEOTAPE)

Content and Programming Copyright 2010 Fox News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2010 CQ Transcriptions, LLC, which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, LLC'S and CQ Transcriptions, LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.