This is a rush transcript from "On the Record," May 6, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: So are you fed up with the feds? Some states have had enough, telling the federal government, Just get out of our way. Now, the two quick samples -- Arizona taking charge of its illegal immigration problem, and now some state lawmakers in Florida are taking aim at the feds. They want a state constitutional amendment banning oil drilling near the coast. So what's up? Is this a trend? And should the feds be nervous that the states are very unhappy?

Joining us live is Dick Morris, author of the book "2010 Take Back America, a Battle Plan." Good evening, Dick. And Dick, it looks like -- am I imagining things or are the states beginning to rattle their sabers?

DICK MORRIS, DICKMORRIS.COM: Yes. And Greta, congratulations for doing a segment on this. On all of the talk shows, you're always hearing about Washington and federal policies. But as I point out in my book, the big effect of these 2010 elections, huge effect, is going to be the changes at the state level. First of all, you're right, the states are going to use the 10th Amendment that says, Any power that we don't give to the feds goes to the state. And that will be the basis for a challenge to the health care reform bill, to the GM takeover, to the insurance company regulation, to a whole spate of Obama policies.

But the other thing is state government itself is going to change so dramatically. I believe the Republicans will capture at least a dozen new governorships and many, many chambers of state legislatures around the country. And particularly when it comes to education -- I have an article on this on my website, Dickmorris.com. It is going to totally change the education debate. You are going to see school choice and charter schools and vouchers and that stuff become the commonplace method of education because the voters are saying, We're not going to fund a system that wastes money when we have to face higher taxes and a revenue shortfall to do it. And they're not going to look to the feds, they're going to do it at the state level.

VAN SUSTEREN: Well, you know, what's interesting -- what sort of caught my attention is a couple of things. One is that the SEC, a federal organization, completely, you know, blew it on the Bernie Madoff, the financial meltdown. They were asleep at the wheel. They're not paying attention. I mean, they have a job to oversee. And of course, I can be sarcastic and talk about how some are paying -- some are watching porn while (INAUDIBLE) paying our salaries.

Then you've got Congress, who -- you know, they failed in oversight of Fannie Mae, Freddie Mac. The -- you know, the Department of Interior's got the job to keep -- make sure the offshore drilling is done safely. They didn't do it. And then on top of all that, you've got Congress, who's supposed to oversee these government agencies, and when the government agencies fail, they hold hearings and create another agency. They never say to themselves, Gee, we did a lousy job at overseeing. And then I looked at the approval rates, I see that in a year -- last year, Congress's approval was 41 percent, now it's 22 percent! So I can understand the states saying, Get out of our way.

MORRIS: Well, I think it's -- I think you're completely right in everything you said. But it's more than just that. It's an antipathy to the role of government in every aspect of our society. That's why I mentioned the education changes. People are simply no longer going to be trusting government to educate their children. They're going to want competition. They're going to want choice.

And when you combine the crunching of revenues that are going on at the state level with the huge Republican gains that are likely in the election, I believe it will change every school system in this country. On my website, I have an article -- at Dickmorris.com -- where I talk about it. And it is so fundamental, and nobody is covering it. Except you.

VAN SUSTEREN: You know, it -- it -- you know, but it -- it's sort of -- I think that the reason why the states are doing it, if I can be so bold as to try to guess, is that -- is because the federal government has failed. I mean, it has let them down on so many things, whether it's jobs -- we're going to get a jobs report tomorrow -- or whatever it is. You know, if the government were really soaring and succeeding on the -- on all these different areas, education, or any of them, I don't think we'd see this. I think that the states are simply frustrated.

MORRIS: Well, we've come full circle, really, when it comes to federal regulation. The companies that are abusing consumers, like some of the banks and the insurance companies, pension funds, are anxious for federal regulation because they preempt state regulation. And it means that the feds pass a law that's weak, and then the states can't come in and pass stronger laws because the feds have preempted the fields with inadequate regulation.

And I think that's exactly what you're looking at here. And I think that a by-product of the whole antipathy to big government and to the way the feds are working is a reempowerment of the states, and then through choice and other stuff, a reempowerment of the citizens themselves.

VAN SUSTEREN: All right, well, it's going to be fascinating to watch, especially when some of these things end up in federal courts and somebody has to determine what's constitutional and what's not. It's going to be an amazing showdown.

MORRIS: Rebirth of the 10th Amendment.

VAN SUSTEREN: Well, it's going to be fascinating to watch. Dick, thank you.

MORRIS: Thank you, Greta.

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