This is a rush transcript from "On the Record," March 26, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Continuing with former Governor Sarah Palin. She took a break from campaigning for Senator John McCain to go "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Governor, of course, Senator McCain just raced off to talk to his constituents. But he said it was nostalgic being with you and Todd. So I'm curious. What's it like for you to be together with Senator McCain again?

PALIN: It was awesome. I've had opportunity to meet with him through these months and to talk to him over the phone quite often. But to finally be here, the four of us together again, it's -- it's wonderful. I have great, great respect and admiration for all the McCains, especially Senator McCain.

VAN SUSTEREN: Now, when you're on the campaign trail, everyone sort of agrees with everyone on the same issues. Now the campaign is over. The election is over. Are there some issues that you and Senator McCain have a respectful disagreement about?

PALIN: The point here is that Senator McCain and I agree on the big picture, where it is that the country needs to go. There are so many challenges facing America right now, and Senator McCain has been on the right track trying to get the country back on that track that will lead to more prosperity, more security for this nation. We agree on those things that have to take place in order for us to kind of undo some of the things that Obama is doing and get us back on that right track towards prosperity and security.

VAN SUSTEREN: All right, now, that's a good team. That's a good ticket. But as a practical matter, there might be some ways where you think things -- where he might think he should do something some way and you might think he should do it another way. Let's take the economy. Is there anything in particular about the economy that you might disagree with Senator McCain on and you think we should be doing? Or health care?

PALIN: No. Listen to what Senator McCain is doing today in fighting so hard against the growth of government and the earmarks and the bloat of our budget that we're seeing today. Those things I absolutely agree with. The majority of Americans agree with Senator McCain on where he wants to go with the economy, allowing for a smaller, smarter government, more prosperity for our private sector, for our families. I absolutely agree with what he's proposing to rein in the growth of government today.

And with health care, he's the one who has provided a whole lot of the solutions, along with other good folks in Congress, like Representative Paul Ryan with his road map, and others who have been adamant about getting the Obama administration and Pelosi and Reid to listen to what the other side has in terms of solutions.

I agree with what Senator McCain has proposed for reform in health care that's needed in this country. He certainly has been the fighter against "Obamacare" that has been the take over of one sixth of our economy. I agree with where he's going there.

VAN SUSTEREN: All right, the Tea Party movement, I think that it -- I think most people agree that if it's going to sliver off any votes or keep any votes at home, it's going to be taking votes from the Republican Party. Is the Tea Party movement going to have an impact, do you think, on this primary, where Senator McCain is being challenged by J.D. Hayworth?

PALIN: Absolutely. And that's why we're making a point to point out that Tea Party leaders are not opposing John McCain. They're supporting his mission, too, and that's to rein in the growth of government. Tea Party -- tea partiers, bottom line, are saying, We're taxed enough already, and that's what John McCain is saying, too.

I'm proud to be part of the Tea Party movement. I'm wearing my Tea Party necklace today, even. I was proud to get to point out Tea Party movement participants in the crowd today. They're here cheering on John McCain because they know, at the end of the day, we're all fighting for the same thing. We're fighting for the future of this great country. So he is part of the Tea Party movement. And yes, they're going to be very impacting. They're going to be impacting for John.

VAN SUSTEREN: You know, it seems to me, in looking at all the press down in Arizona about this campaign, that J.D. Hayworth, the challenger, really was hoping that he would get the Tea Party vote, that he'd get the Tea Party movement. Has he ever reached out to you and said -- at any point prior to -- obviously, until today -- asking to you campaign for him? Has he tried any -- has he tried to reach out to you?

PALIN: I haven't spoken with him, but I'm all about competition. I love contested primaries. Competition makes all of us work harder and be more efficient and produce more. That's what a contested primary is all about. So let's be thankful that there is that healthy debate that's going to go on in this primary. And the candidate, then, who best represents the people of a state -- in this case, Arizona -- will rise to the top and go on to the general. I hope that we see more contested primaries across the country.

VAN SUSTEREN: How about state attorney generals who are now seeking to go to court to declare health care unconstitutional? I mean, I assume I know your position on health care, but what's your thought about state attorney generals doing this? And it's been -- so far, I think it's been all Republican, except one Democrat in Louisiana.

PALIN: Well, everybody who opposes "Obamacare," that takeover of one sixth of our economy, needs to say kudos to these AGs who want to sue and have good standing, too, as they say. No, this is unconstitutional. Not only was a lot of the process crooked to get people to vote for "Obamacare" in Congress, but these mandates that I believe are unconstitutional on our state -- forcing constituents in each state to purchase something from the private sector? This is against the commerce clause. It's against so much of what has built this country into the greatness that it is. I'm thankful for these attorney generals, and I would hope that more attorneys general would participate in this.

(END VIDEOTAPE)

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