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Sen. Blanche Lincoln 'On the Record'

This is a rush transcript from "On the Record," April 22, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Right now, Democratic senator Blanche Lincoln goes "On the Record." She says she knows how to clean up Wall Street, and for starters, she wants transparency. Her bill, Wall Street Transparency and Accountability Act, just passed the Agriculture Committee and has the bipartisan support of Republican Senator Chuck Grassley. Here is Senator Lincoln.

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Senator, nice to see you.

SEN. BLANCHE LINCOLN, D - ARK.: Thank you. It's great to be with you.

VAN SUSTEREN: All right, there's been a new bill coming out of your committee, the Agriculture Committee, having to do with transparency and derivatives. So let's start first. What is a derivative?

LINCOLN: Well, a derivative is, in this instance, a financial tool. But it's something that derives its value from something else. You look at what -- and because of that, it is a futures contract, in this instance, and that's what gives it the jurisdiction in the Senate Agriculture Committee. But deriving its value from something else is what creates a derivative.

VAN SUSTEREN: Would a derivative be, for instance, not in an agriculture sense but otherwise, like, a collection of mortgages that you bundle together and then you might sell as one instrument? Would that be a derivative because it drives its value from all these mortgages?

LINCOLN: It could. Yes. Absolutely. That could be a derivative. There's multiple other examples. Some of them are far riskier than others. Some of those mortgages, there were lots of mortgages, different mortgages that were all bundled up, and then just like they were made into a piece of sausage and cut into pieces and distributed in other places. So when that derivative was created, then it was distributed and virtually impossible to put back together. But yes, there's that instance.

VAN SUSTEREN: All right. In the bill derivative -- the bill that's just come out your committee has to do with transparency because people didn't know how, at least I assume -- or didn't know how the sausage was being made, the derivative, what composed it, and so necessarily what the risk was in what they were buying. Is that a fair description?

LINCOLN: That's exactly right. There are dark markets. They have not been regulated. The over-the-counter markets have not been regulated. And what we do here is definitely take them out of the dark. We shine the light of day on them both through mandatory exchange trading, as well as clearing, but also making sure that the transparency is there, real-time reporting to both the regulators and the public, so that that knowledge which Wall Street has had individually -- I mean, Wall Street has had it exclusively.

Now that information is out there so that when Wall Street wants to create a derivative or a swap between two entities, they have all the information and nobody else does. Now putting it on an exchange would actually create more of that real-time information to other individuals.

VAN SUSTEREN: So you know what you buy. So for instance, if there's something shady about it, you know how to hedge your bets either way, whether you want to buy it or not buy it.

LINCOLN: That's right.

VAN SUSTEREN: All right. Now, until this time, we didn't have that transparency? I mean, how can that be?

LINCOLN: Well, it's a relatively new market. Quite frankly, it went from just in the last 10 years -- it's a market that started probably 20 years ago, but in the last 10 years, you've seen it go from $90 trillion to $600 trillion. I mean, that's an enormous expansion of notional value in just 10 years. And what's happened is Wall Street's been able to, again, have the corner on the market of information and grow that marketplace themselves.

VAN SUSTEREN: All right, now, it's being -- it's come out as a bipartisan bill. I understand you have Senator Grassley -- you have one Republican, on it. What is -- and I don't mean to make you argue your opposition's point, but what has been the Republican opposition to putting the spotlight -- minus Senator Grassley -- on what -- how these derivatives are composed and created? What has been the impediment you've run into?

LINCOLN: Well, we have worked very hard in a bipartisan way. And Saxby Chambliss, who is the ranking member on Agriculture, is a wonderful person to work with. He and his staff, we've been working constantly along this pathway to come up with the common ground. I mean, there's a couple of still places that we, you know, definitely have some...

VAN SUSTEREN: Well, why didn't they want the transparency? I mean, why -- why didn't it -- why weren't you -- why didn't you get more Republicans on the whole idea of putting the spotlight on it?

LINCOLN: Well, I think we will, to be honest. I think that -- you know, that we will see more of those. One of the concerns, I think, has been the mandatory trading on the exchange and the mandatory clearing. Now, we had some exemptions on clearing, but it was very, very narrow. It was the most narrow of definitions in terms of...

VAN SUSTEREN: So they don't like exemptions.

LINCOLN: Well, they may have wanted some more exemptions. I don't know. I mean, but I think what we've been doing is trying to find that common ground and figure out how we can provide the toughest reform possible in a bipartisan way. And I think Democrats and Republicans want to make sure that these financial markets are more accountable and more transparent.

(END VIDEOTAPE)

VAN SUSTEREN: OK, as you know, back home in Arkansas, Senator Lincoln is in the fight of her political life. She is down in the polls and getting hammered from the Republicans, the tea party and even her fellow Democrats. So does she want President Obama to come down and campaign for her in Arkansas, or is President Obama the kiss of political death for her in Arkansas? We're going to ask her. There is more with our interview with Senator Blanche Lincoln coming up.

(COMMERCIAL BREAKS)

VAN SUSTEREN: Continuing with Democratic Senator Blanche Lincoln. She is up for reelection in November. Does she want President Obama to come to Arkansas and campaign for her or does she want the commander in chief to stay way? Senator Lincoln went "On the Record"

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Now, you are up for reelection. You have a tough contest. What is going on? The tea party has been after you.

LINCOLN: I don't know. The tea party, even the left of my party has been at me.

VAN SUSTEREN: So you're getting squeezed both ways.

LINCOLN: I think if you look at the kind of legislator I am, I work hard to get results. I think it is more important instead of bickering or answering to the left and to the right and to the extreme, it's to look at what is right for the American people.

And I think the American people want to see greater transparency, they want to see greater accountability in their government and in their financial markets and financial system.

VAN SUSTEREN: I don't disagree with that. I think the transparency, a lot of people in favor of that. I don't know the opposition. Maybe in some of the nuances is where you might get some opposition.

But down in Arkansas you have a rather unhappy crowd as far as we can see. And to get elected you got to have a happy crowd down there. You've got the left putting the squeeze on you. They're mad at you because they say you are a conservative democrat. And then the right's mad at as well down there. So how do you win?

LINCOLN: I think you appeal to people's good sense. That's exactly what I do, and I think I'm making good headway. I think people want good government and the kind of transparency not just in their financial system but also in their government. I fought hard in the debate on health care to ensure there was transparency.

VAN SUSTEREN: The left got mad because were you again the public option.

LINCOLN: But then the right got mad because I believed very strongly we needed to do health care reform.

But I fought hard for transparency. I offered the unanimous consent to ensure anybody that offered an amendment had to put it up on the web so people could see what we were voting on, on the floor. And I got an objection. I did it anyway on my Internet site.

VAN SUSTEREN: Do you want President Obama to come down and campaign for you?

LINCOLN: We are always proud to have a president come to Arkansas.

VAN SUSTEREN: You know what I mean. Is that a yes you want him to campaign for you?

LINCOLN: I'd love it. If he wants to come, we are proud to have a president. I was proud George W. Bush, Bill Clinton. Michelle Obama is coming down early next month. So we are excited about that.

VAN SUSTEREN: I guess I ask you that because you ran an ad that says you don't -- I don't want to paraphrase, but you don't take directions from the Democratic Party. You are getting squeezed from the left, squeezed from the right. You have President Obama, the advocate for health care, 60 percent of your people in Arkansas complaining. These are rather tenuous waters to be in.

LINCOLN: They are. But the important thing for me to remind Arkansans is I don't answer to special interest groups. I don't answer to the left or the right, I answer to them. I answer to the people of Arkansas.

If they look at my record they will know that. They will look and see in the -- if you look at that "National Journal" article last month, I was smack-dab in the middle, which I think most Arkansans are. They are anxious to see us getting things done. They know common ground in the middle is the best place to move forward and to get things do.

And that's exactly what I try do up here is to work with everybody. I think most of my colleagues will tell you is that I don't lean to the left or to the right. I forge ahead and try and solve problems for the people of Arkansas and America.

I think that's -- that's the key in this election is to show people your record. I have fought hard for overregulation from EPA. I was one of the ones -- it was actually me and Lisa Murkowski --

VAN SUSTEREN: Why are they giving you a hard time? You have been here two terms already. As you said, this transparency thing, I'm sure a lot of people will appreciate the transparency. I don't know how you're going to oppose transparency.

LINCOLN: You are not a novice at this. You know when you run anytime during the midterm of a new administration, and it doesn't matter who it is, it is just a bad time to run. I did it in '94. I was a tough time. This time it is more difficult.

VAN SUSTEREN: Why?

LINCOLN: You got a lot of noise. Even in 2004 when I ran you didn't even have BlackBerries. You didn't have YouTube, Facebook, e-mails, and twitter and the different noise out there. And it is unfortunate. People get frustrated and consumed with a lot of different noise and a lot of different things.

And it's difficult for them, I think, to really, you know, hear from us or from me. You know, they are hearing from me now. But if you look at the amount of money that outside interest groups are spending coming into the state of Arkansas and spending against me from the left and from the right, trying to tell them, the people of Arkansas, what they should think and who should represent them.

That's not coming from, you know, the source of what my record is and what has this meant to Arkansas. I think that's important.

And it is a different environment out there. But, I feel strong about the people of Arkansas, they are great people. And they do want to know what is going on.

And that transparency whether in the financial reform and the regulations we put forward or whether it is in the debate and how we do things, I have tremendous respect for that, because I know and believe when it is transparent they will look at it and realize that I stood up for the things that are important to Arkansas, whether it is ensuring that EPA is not creating the law that the lays are being created by their elected officials, not unelected bureaucrats in an agency, or working to make sure that things like what I worked with on Jon Kyl on a state tax reform.

VAN SUSTEREN: Bottom line, it's a tough sport.

LINCOLN: It is. But it is well worth it. And for all of the criticism that comes, it is honorable to want to represent what is near and dear to you. And that's what I do. I represent my state and the people of my state who are very near and dear to me.

(END VIDEOTAPE)

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