This is a rush transcript from "On the Record," July 13, 2011. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: First, Republican presidential contender, Representative Michele Bachmann. Nice to see you.
REP. MICHELE BACHMANN, R-MINN., PRESIDENTIAL CANDIDATE: Good to see you, Greta.
VAN SUSTEREN: All right, breaking news. Just down the street, the White House tonight, talks -- not only did they break down, but apparently, the president got mad and left the room. And there's one Democratic congressional aide told us that the meeting ended with Majority Leader Cantor being dressed down by the president while sitting in silence. Things are getting very heated up.
BACHMANN: They are. I think the president has been used to getting his way, Greta, in Washington, D.C. Remember, one party controlled all levers of power so -- during the entire of the presidency for President Obama. This is new for him. Now he's finally getting some of the first pushback, and he's not used to it.
VAN SUSTEREN: Well, it's sort of interesting. Senator McConnell, Senator Kyl, both Republicans, said earlier today that President Obama needs to decide between his goal of higher taxes or a bipartisan plan to address our deficit. He can't have both. So it seems to me that these talks really are at a total stop. If the Republicans will not move, will not move on the tax issue, that's the end of it.
BACHMANN: I think, actually, it's more about what the people are saying because 69 percent of the American people right now are saying, "Don't raise the debt ceiling." Sixty-three percent are saying the country is on the wrong track. There's no appetite for continual government spending. There's no appetite for the direction the economy is moving in.
So I think it's the president who's out of step because, I mean, Greta, I'm on the ground. I'm in Iowa, North -- South Carolina, New Hampshire. There is no appetite for this, and I think it's the president who's out of step. And so I think that my fellow colleagues in the House are hearing what the people are saying from back home.
VAN SUSTEREN: All right, you said something to me before the show started, which I regrettably didn't know, didn't understand, or whatever. I hate admit it. But explain to me because one of the things I asked you was about the Social Security checks...
VAN SUSTEREN: ... because we all care that people get their Social Security...
VAN SUSTEREN: ... military gets their pay.
VAN SUSTEREN: The president has sort of saber-rattled, saying the checks won't go out on August 2nd or 3rd. You told me that this comes out of a different fund.
BACHMANN: Right. There's a lot of pushback on the president's comments because the checks come out of the Social Security trust fund. That fund writes the checks for these -- for these checks for senior citizens. Those checks will continue to go out. And I think that it was irresponsible, frankly, for the president to suggest that they won't be going out. They will be going out.
VAN SUSTEREN: So that I understand, they are separately funded by our -- our payments, our FICA payments.
BACHMANN: You're right. That's correct.
VAN SUSTEREN: So no matter what, they're going to -- the revenue's still going to roll in for that. If the government shuts down on the deficit issue...
BACHMANN: Remember how this calculus works. You and I have jobs. And so out of our paychecks, there's FICA money that's taken out. That goes into the Social Security trust fund. It's a general fund. It doesn't just go into Greta account or a Michele account. It goes into a general account. Out of that account, the checks are written for our senior citizens in current real time.
The only problem would be if there's not enough money taken out of our checks to go into the general fund and we're short, then the federal government dips into the general treasury to make up the difference so that senior citizens get their checks. So the bulk of the money comes out of the Social Security trust fund.
It's always been sufficient to cover. Last year, there wasn't enough money, so they had to dip into the general fund. That may be the case this year, as well. But the bulk of the money is there to pay those checks.
VAN SUSTEREN: One thing I don't understand is that -- I mean, I understand the -- the Democrats don't want to do more cuts and the Republicans don't want any more tax increases. I understand that. The one thing I don't hear in any of these discussions is about waste and fraud. And I mean, I know that...
BACHMANN: ... everywhere! It's in every department!
VAN SUSTEREN: I know it's not going to solve our economic crisis. But there's an awful lot of waste, and I would think that it'd be so politically attractive to both sides. Why aren't they both talking that and looking for it?
BACHMANN: You've got your finger exactly on what people are saying to me across the country, too. They know there's waste everywhere. And they see the fraud. They see people that are milking the system. And they think, wouldn't you at least start there? Isn't that easy, Republicans, Democrats, independents, apolitical people? We all agree on that. Let's get rid of it.
But we're coming up to the brink right now, and I think one thing that politicians need to say, something that I'll commit to, is that if we come to a time of shutdown, I'm not going to take my pay. I'm putting my pay in a fund for military families because I think that the president can solve this right now by taking off the table the issue of the full faith and credit of the United States.
We have plenty of money coming in to pay off the interest on the debt. Take it off the table. And take off the military pay issue off the table. You know, if you have a spouse at home and their husband or wife are serving our military in the time of war, you take that issue off the table. The military shouldn't be pawns. And the full faith and credit of the United States shouldn't be pawns. Take it off the table and then haggle about the rest.
VAN SUSTEREN: All right, one of the other issues that developed late this afternoon is that Moody's said they may downgrade our credit rating. If that happens, it's going to be -- it's going to cost us more money to borrow, and we all know we need more money to borrow -- or we need more money because we can't pay our bills. If that happens...
BACHMANN: But of course, that's dependent upon not paying the interest on the debt. That's a very small amount of money, relatively speaking. We can easily do that. I had a press conference today with Representatives Steve King and Louie Gohmert. We have a bill that will...
VAN SUSTEREN: So you don't care if we get downgraded?
BACHMANN: No, we won't. We won't get downgraded if we pay the interest on the debt. The president knows and Secretary Geithner know that we have sufficient money to pay the interest on the debt.
VAN SUSTEREN: Well, why is Moody -- why is Moody's saying that to scare the country, then?
BACHMANN: What they're saying is that if we fail pay the interest on the debt...
VAN SUSTEREN: Then they will be downgraded
BACHMANN: ... we'll be downgraded.
VAN SUSTEREN: Then they will?
BACHMANN: But there's no reason to do that. We have plenty of money to pay the interest on the debt! That's why I think the president is...
VAN SUSTEREN: Well, if we have...
BACHMANN: ... playing politics, clearly.
VAN SUSTEREN: We have plenty of money if we don't pay other things, right? We don't have a lot of extra cash hanging around or we wouldn't have this problem!
BACHMANN: Remember, the interest on the debt is anywhere between 6 and 10 percent of all the revenues that come in. Clearly, we have plenty of money to pay off the interest on the debt. So -- but the thing is, it's more fashionable for the president to scare people and say, The sky is about to fall. We're going to lose our credit rating.
No, we won't! We have plenty of money to pay it. Just pay it, take that issue off the table. And then we -- here's the big issue. The president doesn't want to have to be confronted with priorities in spending because he has a lot of chutzpah. He spent a trillion dollars on the stimulus. It failed! He spent a trillion-and-a-half every year on deficits. They're his! And also "Obamacare" -- trillions of dollars!
VAN SUSTEREN: I think...
BACHMANN: This is -- this is his spending.
VAN SUSTEREN: I think...
BACHMANN: He's got to own it...
VAN SUSTEREN: I -- I...
BACHMANN: ... and deal with it!
VAN SUSTEREN: I think that the president (INAUDIBLE) the president (INAUDIBLE) but I think the -- I think the president genuinely wants to make sure people don't get hurt. And I believe...
BACHMANN: Well, we all do.
VAN SUSTEREN: No, and I understand that, but...
BACHMANN: We all do.
VAN SUSTEREN: But I mean, I don't -- I don't think that he's necessarily just, you know, sort of playing politics, or some would say, is that, you know, he worries that if we take some money out of this program, it's going to hurt someone. They all have costs. Every dime we spend -- every dime we take has costs.
BACHMANN: But my point was, this president has added trillions of dollars. We wouldn't be in this crisis right now if he wouldn't have spent that trillion on stimulus and a trillion-and-a-half more than he should have on the budget and now trillions more on "Obamacare." But for those trillions in spending, Greta, we wouldn't be in this mess that we're in. We'd still be in a bad spot, but nowhere near the hole. That's why -- take the shovel out of the president's hand so we don't dig any deeper. That's what will happen if we raise the debt ceiling and why I am adamant against raising the debt ceiling.
VAN SUSTEREN: Representative, nice to see you. We didn't even get a chance to talk about Iowa, but we will next week. You'll come back, right?
BACHMANN: I will.
VAN SUSTEREN: I like booking you on air, the sneaky way to do it.