This is a rush transcript from "On the Record," April 9, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight: The Tea Party claims victory. They say they knocked Congressman Bart Stupak out of politics. Now, he denies it. Karl Rove goes "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Karl, nice to see you.

KARL ROVE, FORMER BUSH ADVISER, FOX CONTRIBUTOR: Great to see you, Greta. How are you?

VAN SUSTEREN: I'm very well. And I understand in the upper peninsula of Michigan tonight, the Tea Party is declaring victory over Congressman Bart Stupak. Do you think that he decided not to run again in November because of the Tea Party movement, or has he completed all that he intended to as a member of Congress?

ROVE: Well, I think it's obviously the former. It's not latter. I mean, he's been there for 18 years, but I'm sure, as most members of Congress, he's got more things he'd like to do. But I think it became apparent to him after his behavior during the battle over health care that he had lost the support of pro-lifers in his district. It's a socially conservative district. And at the same time, he had inspired a challenge to him from the left on the issue of abortion, a very popular county commissioner had been endorsed by the National Abortion Rights Action League, and he was facing the prospect of a very difficult and probably deadly primary with his friends deserting him and his enemies not -- not -- no -- not rushing to his aid.

VAN SUSTEREN: Well, the Tea Party movement has said that he is their -- he was their number two person to dethrone come November. The number one person, of course, is Senate Majority Leader Harry Reid, in the state where you are tonight. Does this now send a warning to the Democratic Party that the Tea Party movement -- you know, that it does have teeth, essentially?

ROVE: I think that's part of it. I think the other part of it is, is that it's clear that the whole concept that the Obama and White House is trying to sell that now having passed the bill, there's plenty of time to heal the wounds and plenty of time to explain this bill and plenty of time to put in it a positive light is just so much bunk.

Bart Stupak took an accurate reading of the polls in his district and the sentiment in his district and came to the conclusion he was going to get beat if not in the primary, then certainly in the general election. And as a result, rather than face defeat, he pulled the rip cord. But you know, this is -- this is -- this is -- the Tea Party movement is playing an important role in this, but public sentiment even outside the Tea Party movement is a powerfully -- is posed to be powerfully against the Democrats in the fall election.

VAN SUSTEREN: You know, it's interesting, though, is that the Democratic Party seems to be quite tone-deaf. (INAUDIBLE) whether you are in favor of the Tea Party movement or not, if you even look back, the polls have been overwhelmingly that the American people were interested in jobs and the economy, and then the White House went forward with health care. Then when they went forward with health care, the American people were saying, Not that health care, we want something else done, but they still went forward. Then they had the election in Massachusetts, in a state that no one felt would ever have a Republican senator, and again they missed that. And now -- now you see this. It really does -- it's sort of stunning that people -- that the -- the Democrats aren't taking more of a grip with the impact of the tea party movement.

ROVE: Right. Well, you know, I didn't know if you saw it, last week there was an e-mail fund-raising pitch from the national Democrats for their campaign effort, in which they referred to the tea party movement as right-wing nutjobs and slimy thugs, among other things. I wrote -- I wrote -- I included some of these in my column in The Wall Street Journal. I was really taken aback with the viciousness of the language, disparaging something the Democrats ought to, frankly, be welcoming, which is a group of people who've heretofore largely been spectators, not participants, who decided to get involved in American politics.

And rather than, you know, treat them with some respect, even if they don't agree with them, instead when this -- this e-mail fund-raising pitch asking for money before the -- before the deadline for contributions, with a vicious, vicious depiction of the tea party movement and pretty vile -- in fact, they called them vile right-wing slugs or something or other. It was pretty vicious stuff.

VAN SUSTEREN: Well, you know, it seems, though, that the Tea Party movement's sort of equal opportunity. They are putting some targets on the backs of some Democratic candidates, but they are not particularly happy, it doesn't seem, with the Republican Party or they wouldn't have peeled off and created this Tea Party movement. And if you look at even, like, what's going on in New Orleans now, with the Southern Republican Leadership Conference, you know, they -- they are now paying some homage to the Tea Party movement.

ROVE: Yes. Well, look, I have a slight disagreement. I think the Tea Party movement arose not in opposition to parties but in opposition to policies. And as a result, tea party members have evolved into a movement much like the Civil Rights movement or the pro-life movement or the 2nd Amendment rights movement, which is -- which grew out of opposition to certain policies and then found itself in a place where it wanted to influence people in both political parties.

I don't think this is a third -- you know, sort of, like, We don't like the Republicans, we don't like the Democrats, therefore we're going to become a third force. What it was, was, We don't like the policies being discussed in front of Congress today, and we're going to organize ourselves in opposition to those policies. And now it's is trying to find a way -- I think the movement's trying to find a way to say, How do we without become an adjunct to the Republican Party become a movement that influences people in both parties at the election time?

And we've seen that successfully done before, and I think the Tea Party movement is going to find (ph) this (ph). As I go around the country, I find no enthusiasm among Tea Party leaders for creating a Tea Party party. In fact, in this state, you know, the Tea Party leaders are, in essence, suing the Democrat operatives who have tried to create a Tea Party party on the ballot in order to siphon off enough votes from the opposition to Harry Reid to reelect Harry Reid, albeit by, you know, maybe a couple of hundred votes. And it's the -- they're doing it because they don't want their name to be taken as a political organization. They want to be a movement that forces both parties to pay attention to these big ideas about which they're talking.

VAN SUSTEREN: I wonder to what extent, though, as you look at the Tea Party movement, the people who are most involved -- to what extent most of them are not formally known as independents and it isn't now the independents instead of just sitting on the sideline and deciding each election, Should I go Republican, should I go Democrat, aren't sort of, you know, this -- just becoming more active. I'm sort of curious whether the tea party movement doesn't have an enormous amount of independents who are saying, You know, what? Now I'm getting involved.

ROVE: Oh, absolutely. Absolutely. In fact, I think -- look, there are a bunch of Democrats. There are a big slug of independents. And there are a lot of Republicans. If there's something that draws all of the people in the Tea Party movement together it is, I think, by and large, many of them have never been really active in politics before.

I happened to be in San Francisco last year and I sat next to the woman who organized the tea party movement. I saw her last week in Contra Costa County. Sally (ph) came out to see me on my book tour and I had a nice visit with her, a woman who was completely apolitical. Well, I happened to be telling this story at another stop along the road, and woman came up to me and said, That's me. I'm exactly the same way. And in fact, it was in Albany, New York, yesterday. She said, I'm the same way. I was not involved in politics before, and now I'm in the tea party. I came to your event in order to figure out -- you know, get a better sense of where the Republicans are.

So I think a lot of people -- the one thing that ties all those people together is they may be Republican, they may be Democrat and a bunch of them are independents, it's that heretofore, they really haven't been politically active at all. They may have voted, but they certainly weren't, you know, going to conventions and going to precinct meetings and going to rallies and showing up at town hall meetings. But now they are, particularly trying to figure out, you know, where their member is on this issue and then to persuade them to change their mind or to come down on their side of the aisle when it comes to deficits, debt, the health care bill, the power of the government, the spending that's going on in Washington.

VAN SUSTEREN: The Southern Republican Leadership Conference that's going on right now in New Orleans, what is that? Is that sort of a beauty pageant in terms of so the Republicans can identify who are the sort of the leaders of the party and who might be the challengers in November, or am I being too flip about it?

ROVE: Yes, I think you're being -- you're ahead of yourself a little bit. I think it's -- these things happen all the time. There's a Midwestern Leadership Conference, a Southern Leadership Conference. It's not a beauty contest because Republicans are thinking -- at least the ones I'm talking to are focused mainly on 2010 and only peripherally on 2012.

I think the utility for prospective candidates is this is a way for them to go out and sort of hone their skills, if you will, make themselves a little bit better known, but mostly to hone their skills in front of a big crowd and to perfect a message. But most Republicans that I've talked to -- and I was with a bunch of Southern Republicans this week in Mississippi who were getting ready to go to the conference in New Orleans - - their focus is on 2010. What can we do this fall? And it's only peripherally on, you know, who's interested in 2012 and how are they going to -- going to develop.

Remember, think about it this way. In 2006 at this point, who in the Democratic Party was getting settled on Barack Obama as the nominee of the Democratic Party in 2008? He was barely -- you know, he was the asterisk in the polls. I mean, nobody was paying attention. The presidential race is going to get started in earnest a lot later than now, after -- and it will be after the 2010 election.

VAN SUSTEREN: But isn't there a lot of behind the scenes sort of collecting your chits, seeing who's going to be out there willing to support you two years from now, if you're going to run? I mean, you make speeches. You make deals. You say, Look, I'll come campaign for you, and you know, I'll come do this for you in anticipation of down the road? Isn't there some of that?

ROVE: Well, there is some of that, but I'll tell you, there's an interesting spirit going on this year. I think a lot of Republicans are saying, You know what? I'm going to judge you by how selfless you are. If you spend all of your time going from Iowa to New Hampshire to South Carolina to Iowa to New Hampshire to South Carolina, then I'm not particularly interested in you. What is it you're going to do to help elect people that you may -- you know, all across the country that may not be in early primary states?

I think it's interesting that Palin and Romney and Pawlenty all have started Web sites and activities where they're trying to put money into -- raise money and encourage people to give money in target races. And many of them have the same people on their list. And that's good. I mean, we want the candidates competing with each other to build up their chits not by doing things that benefit themselves directly but by demonstrating that they're going to act selflessly and -- and campaign aggressively around the country for candidates in competitive and vulnerable races regardless of whether they're just in Iowa, New Hampshire and South Carolina.

Now, we got important races in those states -- New Hampshire Senate and congressional races, we have an Iowa governor's race, we have South Carolina governor's race and some congressional races all around those areas. But you know, what's going to happen is, I think Republicans are saying, I'm going to judge you a little bit differently. How selfless are you this year, as opposed to how self-concerned and self-interested are you?

VAN SUSTEREN: I mean, that sounds good, Karl, but the truth is, is if you are not selfless but selfish and focus on Iowa, New Hampshire and South Carolina and forget the rest of them, you're going to get the nomination. I mean, so you can be...

ROVE: No. No.

VAN SUSTEREN: ... selfish -- no? OK.

ROVE: No. No.

VAN SUSTEREN: Tell me why not.

ROVE: Here's the deal. Here's the deal. In those states, particularly Iowa and New Hampshire, they want you to come and romance them. They don't fall in love early. They want to see everybody and they want to see everybody several times, particularly in those first two states. So it is -- you know, if you -- if you're in there today and pressing people in Iowa and New Hampshire hard, say, I want you aboard, you're going to get whacked. People are going to say, That is early. You ought to be focused on your (INAUDIBLE) I want you to come around and make the case to me, but don't be asking me on the first date, you know, to start holding hands, you know, and you...

VAN SUSTEREN: But that's what...

ROVE: I want to see you a couple...

VAN SUSTEREN: Let me go back to...

ROVE: ... more times.

VAN SUSTEREN: Let me go back to my point, that you go to these events so you can gather your chips and you begin hustling everything and you say, Look, I'm going to come to your state and I'm going to help, and you begin building your case. And I -- you know, I guess that's why...

ROVE: Sure.

VAN SUSTEREN: I mean, that's why...

ROVE: Sure.

VAN SUSTEREN: ... I look at...

(CROSSTALK)

ROVE: No, no. I think that's right. I think that's right. But again, I think if they simply go to Iowa, New Hampshire and South Carolina, it's going to be widely known. And people in Iowa are going to say, You know what? He only came here and spent his time here. He should have been out there helping us in states like Ohio and Indiana and Missouri and Colorado.

I mean, we now have a national vision of this. I mean, it's no longer parochial. People are paying attention to these people as they go around the country. And yes, it'll -- if somebody camps out in Iowa, New Hampshire and South Carolina, it will give them, in my opinion, this much of an advantage going into next year because those people in Iowa, New Hampshire and South Carolina are going to be saying, You know what? I'm not going to make up my mind until I get to see all of them.

In fact, they run the danger of making themselves yesterday's news when people finally get around to saying, Well, let's start thinking about 2012. I mean, look, people in those states want to be focused on the races in their state. They don't want to be focused in on making a decision about 2012, and they won't make one until they see all the candidates.

So maybe if somebody gets in this face prematurely and tries to say, Well, I'm coming here to help you in your state because I want you to be for me in 2012, that they say, Wait a minute, buddy. That's not how we do things here. Come back and see me in March, April or May in 2011. Don't be bugging me right now to be making a decision on the presidential contest.

(END VIDEOTAPE)

VAN SUSTEREN: In two minutes, more with Karl Rove. Does Karl think former Speaker of the House Newt Gingrich is running for president? And what about former governor Palin? Find out next.

(COMMERCIAL BREAK)

VAN SUSTEREN: Continuing with Karl Rove on the future of former governor Sarah Palin.

(BEGIN VIDEOTAPE)

VAN SUSTEREN: (INAUDIBLE) attention on former governor Sarah Palin. She certainly has been criticized by many in the mainstream media. Now they seem to be thinking that maybe, you know, she might have a little more oomph with the voters. She drew 10,000 people with Michele Bachmann the other day in Minnesota. Is she really a contender, or is she still just someone who for whatever reason attracts a lot of people to listen to her?

ROVE: Yes, look, right now, she's a phenomenon. She -- you know, she has enormous popularity in some elements of the party from her performance in the 2008 general election, but she, in my opinion, has not made the step, the transition from, you know, successful vice presidential candidate, political phenom, to candidate, potential candidate for the presidency. She's going to have to start framing out a message that is in depth and substantive.

And more important than any message that is campaign-oriented, she's going to have to begin to show a side of her that is getting ready to be a significant, serious candidate and take over this, you know, very important job. You've got to begin to demonstrate that you are presidential in background and nature. And you know, that means for her -- look, I think it was a cheap shot by President Obama that when he said she doesn't have a particular expertise as a nuclear theorist.

But it's the kind of thing that she has to be able to combat by demonstrating that she's meeting with smart people and she's talking to people and she's making thoughtful speeches, writing thoughtful columns, demonstrating an expertise and a confidence on these issues that would make people say, You know what? She's up to being in the Oval Office.

VAN SUSTEREN: We only have a minute left, but former Speaker of the House Newt Gingrich has been on this program for the past two years. He keeps saying solutions, solutions, so he is putting out ideas. Is he...

ROVE: Right. Very smart. He's...

VAN SUSTEREN: He's been doing that...

ROVE: ... an idea machine, as you know.

VAN SUSTEREN: So he seems to be doing exactly that, am I right?

ROVE: Yes. Now, look, I don't know whether he's going to become a candidate or not. He is a, you know, agent provocateur in the House and then he was an agent provocateur in the run-up to the 2008 elections by provoking people to be thinking about what we're for, as well as what we're against.

I thought he had a very tough and a very strong speech against President Obama. I'm not yet certain that he in his own mind has made a decision to be a candidate, but he's clearly, as I said earlier, using this year not to become a candidate but to hone his skills and make himself better if he were to become a candidate at a later time.

VAN SUSTEREN: It -- it's so -- it's fun to watch both parties as they gear up for these (INAUDIBLE)

ROVE: It sure is.

VAN SUSTEREN: Karl, nice to see you. Thank you. And enjoy Vegas.

ROVE: You bet. Well, I'm leaving tonight on a red-eye to get to Kansas City to go to a tea party rally tomorrow.

VAN SUSTEREN: All right. Well, I had a red-eye the other night from Vegas, so I'm still feeling weary, so good luck.

ROVE: There we go.

VAN SUSTEREN: All right. Thanks, Karl.

ROVE: Thank you. You bet.

(END VIDEOTAPE)

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