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Blagojevich: Obama Missed Key Opportunity for Agenda

This is a rush transcript from "On the Record," March 12, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Rod Blagojevich he is a former governor, facing corruption charges and did we mention a reality star? Earlier former Governor Rod Blagojevich went "On the Record" about his new role on Donald Trump's "Celebrity Apprentice", and much more.

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Nice to see you, sir.

ROD BLAGOJEVICH, FORMER GOVERNOR OF ILLINOIS: Hi, Greta, how are you?

VAN SUSTEREN: I'm doing very well. Before I get to the new TV presentation with Donald Trump on "Celebrity Apprentice", I must ask you, I saw the clip from David Letterman, the Top 10. And I have to ask you about the governor of New York. Governor of New York still the governor of New York, you're not still the governor of Illinois, what's the difference?

BLAGOJEVICH: I don't really know the details of what Governor [David] Paterson's situation is. I know mine, obviously, and I've done nothing wrong. I've been hijacked from office when the truth comes out you will, I think, part of what I think will be a historic story.

My only advice to Governor Paterson is that if you didn't do anything wrong then you should keep fighting and you shouldn't quit. Again, I don't know the details of what he's been alleged to have done. I do know he's not running again. And he's succumbed to the pressure which is a decision he made.

But in my particular case, I continue to keep fighting on, because I have done absolutely nothing wrong. When the people have hired you and placed a trust in you they expect to you fight and not quit. In my particular case, that's precisely what I am doing.

VAN SUSTEREN: Governor, the other issue that I saw you weighing in on, is the one that has us sort of chattering here in Washington, about whether or not Rahm Emanuel is down at the gym, at the sort of shower curtain-less gym, where the guys take showers and everything. You had some thought about that?

BLAGOJEVICH: Well, you know, I chose Rahm Emanuel. He was my first choice to help us pick a United States senator. I wanted him to make a deal with the Democratic house speaker in Illinois in exchange for me appointing his daughter, he would stop blocking a public works bill that would create jobs. He would stop blocking health care expansion for 50,000 to 300,000 people, and a written promise not to raise taxes on people.

Rahm was the guy I chose to make that deal happen. He was about to do it. Then everything changed when they came and arrested me. I wanted Rahm precisely because he's that kind of guy. He will lobby you for a vote even if he's naked in a locker room. He's very intense that that's the thing, frankly, that makes him effective. And that's why I wanted him to be the one to make the deal on the Senate seat. If it meant he had to take his clothes off to do it, and if it worked for the people, I suppose, that serves the public, it is probably better than not doing it at all.

VAN SUSTEREN: So, let me get this straight. You wanted him to help you offer up some job to somebody?

BLAGOJEVICH: Yeah the deal on senate seat with me was, I was not selling a senate seat for financial gain, or money that's a lie. I wanted to make a political deal. The attorney general of Illinois, Lisa Madigan, her father is the Democratic house speaker, he was blocking a public works bill, he was blocking expanding health care, and he was pushing a tax increase.

I wanted Rahm and sought Rahm out to be the middleman to make the deal happen. I would appoint her senator in exchange for the jobs bill, health care expansion, and written promise not to raise taxes on people. Rahm was prepared to do it and then everything changed when I was arrested 6:00 in the morning. In fact, the day before my arrest, I directed my chief of staff to work out the tactics, and that meant working with Rahm. I wanted Rahm, not Senator Durbin, who also offered to help because he's a lot tougher. And he's the kind of guy, if he sees a guy who if he sees a congressman in the locker room, whether clothed or not he's going to press you for what he thinks he wants to try to get done.

And that story about him and the other congressman, is the reason why I wanted Rahm to make the deal on senate seat, because this is a guy who knows how to get it done.

VAN SUSTEREN: I guess there has been a little bit of chatter about whether it happened or not happened, but never dull here in Washington.

Let me ask you one other question. The president who was your former senator, and of course now is our president, is having a little struggle with his health care bill. What's your view of this? Why is this so hung up as it is?

BLAGOJEVICH: I think President Obama missed a golden opportunity during the honeymoon period that every president gets. What he should have done was what Ronald Reagan in 1981, what President Roosevelt did in 1933, and that is take advantage of that honeymoon right after you have been elected, and on a wave of change, and push your agenda through. And not wait, or delay, or ask the leaders of your party to come up with a health care bill. He should have had one. They should have pushed it through in the very beginning.

Now that he hasn't done it, my fear is the Democrats are watering down the health care bill. They stripped out the public option, which is not what they promised the American people. And basically, now, they are going to end up with a product, a health care bill, that requires people to get insurance, but takes away the public option where they can have a place in the marketplace where they can afford health care.

To me it is more of a victory for the insurance companies than it is for average ordinary people. If they asked me for my advice-and I know they are not-what I would do if I was President Obama is I would take each issue individually, and I would start out with a bill that requires insurance companies to cover preexisting medical conditions. Have an up or down vote on. And I can't imagine the Democrats, I don't care where they come from, voting against the people who are sick.

VAN SUSTEREN: I think that's what the Republicans wanted to do. Is sort of take issue by issue and it was the president and the Democratic Party that wanted to do sort of a global approach. I actually think that is sort of the Republican strategy or methodology.

BLAGOJEVICH: I don't know whether it is Republican or not, I think frankly, it makes sense. I would start out with preexisting medical conditions. If you are working for a small employer who can't provide health care and you discover that you have skin cancer or a brain tumor the insurance companies aren't going to cover you. Yet, you won't be able to be treated because you can't afford health insurance. So, why not require a vote, Democrats and Republicans, be on the record, are you for or against a bill requiring insurance companies to cover preexisting medical conditions?

I can't imagine a Democratic congressman voting against that. And if he does it piecemeal and then he uses his skill as a communicator, which president Obama has, to go around the country and just push that one easy to understand issue. And do one at a time, I think he can incrementally get a health care bill that will actually help people.

The comprehensive bill they have now, after they stripped out the public option, in my judgment, is more a sell-out to the insurance industry than it is actually a bill that will help people.

VAN SUSTEREN: All right. Now, let's talk about "Celebrity Apprentice", since that is how I lured you here, is to talk about the new show. It airs Sunday night. It is with Donald Trump, who are you competing with?

BLAGOJEVICH: A lot of great celebrities and men and women successful in their own right, Sharon Osbourne, Cyndi Lauper, Darryl Strawberry, Sinbad, Michael Johnson, an Olympic gold medalist, Bret Michaels, a rock star, just any number of successful celebrities, Summer Sanders, another Olympic star, and then there is me.

So, it is kind of a strange way to make a living these days, at least for now it is an opportunity that most people don't get, and not withstanding the fact that I would much rather still be the governor of Illinois, I'm lucky and blessed to have been given an opportunity like this by Donald Trump to be able to compete on a show like that

VAN SUSTEREN: Is the show already in the can? So we are just going to see the first airing, so you have had a chance to meet everybody?

BLAGOJEVICH: There's a contractual situation. I'm obligated--

VAN SUSTEREN: I won't ask the end result. I basically wanted to know if you have you met people like Cyndi Lauper? Have you met Sharon Osbourne? Have you met Donald Trump? Have you met these people already?

BLAGOJEVICH: Yes. The first episode is on Sunday and I'm keeping my fingers crossed, I hope I don't get fired.

VAN SUSTEREN: What is the attraction to this for you, just fun?

BLAGOJEVICH: Well, No. Two-fold, it is partly you are compensated for doing it. And because of what's happened it is very hard to earn a living while I work through these false accusations. So, there is certainly that consideration. The other part is you get to fight and compete for a charity you believe in. I'm out there trying to help the Children's Cancer Center in Tampa, Florida, which raises money for children and their families who are suffering from pediatric cancer. If I could be successful on the show, then we'll be able to raise money to help that organization that helps kids who have cancer.

VAN SUSTEREN: Is Donald Trump tough?

BLAGOJEVICH: Donald Trump is a great inspiration. He's obviously someone who has known Olympian success, big real estate mogul, throughout the 1980s, his success and legend grew. Then when the economy went south in the early 1990s, it took him with them. He was $900 million in debt. He was on the top of the mountain and fell right back down. Instead of whining and complaining he picked himself up, he brushed himself off, he fought back and he's now bigger than he ever was before.

When I look at his story, look at the courage he had to fight back, it inspires me to fight back with what has happened to me in my particular situation. And I hope it is an inspiration to people across America, who are kind of down on their luck now. There are a lot of people out there who have lost their jobs, who are struggling, who are afraid they may not have a jobs that they have today, tomorrow. And so you look at a guy like Donald Trump. And yes, obviously, he's in a league of his own.

But stories like that, I think can be helpful, inspirational to people, to keep fighting and never quitting. Believe in yourself and believe, ultimately that if you have right on your side and you work hard, you can turn misfortune and adversity into success, and even greater success. Trump is an example of that.

VAN SUSTEREN: One other quick question since you are not on 10 Eastern Monday through Friday, let me just ask you so the viewers get it. What night is the first episode? I know we have already said it, but tell them again.

BLAGOJEVICH: It is Sunday night on NBC. I hope they tune in. And I hope I don't get fired.

VAN SUSTEREN: All right, Governor thank you very much. I hope you will come back.

BLAGOJEVICH: Thanks Greta, thanks for having me.

(END VIDEOTAPE)

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