Bill Clinton Enters the No Spin Zone

Former President and author of new book 'Back to Work' discusses class warfare, how he differs from Obama and the fate of Obamacare

This is a RUSH transcript from "The O'Reilly Factor," December 20, 2011. This copy may not be in its final form and may be updated.

Watch "The O'Reilly Factor" weeknights at 8 p.m. and 11 p.m. ET!

BILL O'REILLY, HOST: And what I want to do here tonight, Mr. President is solve the nation's problems here. You and me we can do it.

BILL CLINTON, 42nd PRESIDENT OF THE UNITED STATES: We can do it.

O'REILLY: Are you up for it?

CLINTON: I'm up.

O'REILLY: All right, what's this is class warfare business the Democrats are hoisting on the country? What is this? We didn't see that during your administration.

CLINTON: Well, you know I don't look at it as class warfare. I think if you look at what's happened over the last 30 years, the middle class has lost ground. Even before the collapse, before the financial collapse, median income was $2,000 a year lower than it was after inflation is when I left office.

So I don't mind paying more taxes but because I think I got the benefit of the tax cuts under President Bush and the benefit of being in the top one percent so my income went up. But that won't solve the problem. That will help us balance the budget when there is growth again.

But we have to change the whole job structure of America. We have got to basically reorient our economy toward the future. That's the real answer.

O'REILLY: But that's not being discussed. What's being discussed by the "Occupy Wall Street" people and by some elements on the far-left is the one percenters, me and you. We're not paying our fair share. I think I am paying my fair share. Now I didn't mind paying what you had me at.

CLINTON: But you got to... yes.

O'REILLY: I didn't mind paying you that but do you know between... among you, Obama and Bush who had the highest tax receipts of all three of you? Do you know? Bush. So under prosperity the tax cuts under Bush more money flowed into the federal government.

So Erskine Bowles comes back and says let's cut the corporate tax from 35 to 26. What does Obama say, what does the President say? No.

CLINTON: But if you look at what the Bowles-Simpson Commission recommended, I think there were a lot of great things in that report.

O'REILLY: Then why didn't the President take them?

CLINTON: Well, I don't know the answer to that but I think the... what Bowles-Simpson did is what I think should be done. Some variation of it. They said this long-term debt is going to kill us. We have to deal with it. Let's adopt some short-term strategies to get growth going and then let's have a long-term debt reduction package. That's what I think we should do and I... I think it will work.

O'REILLY: But I was surprised that the President didn't embrace it because it gave him a pathway out of the mess and that's where we are right now.

Now one more question about the class warfare, are you really convinced the Democrats aren't playing this card? Because that's all we hear is tax the rich, tax the rich, tax the rich.

I don't mind paying 40 percent and that was the high under you. All right. And Bush cut it back down to 34 percent. But I don't want $500 billion dollars going to Solyndra and its bankrupt. Am I crazy?

CLINTON: No but I think the idea of moving to a cleaner energy future and doing more energy efficiency...

O'REILLY: Love it.

CLINTON: ...makes smart sense.

And what happened to Solyndra was a unique case. With the Chinese producing more and subsidizing more and with Americans in the business of doing more, the price of the traditional (INAUDIBLE) cells dropped so much that it became an uneconomical thing. I personally prefer tax credits for people who actually produce it...

O'REILLY: Yes, tax credit.

CLINTON: ...because then if you and I have a different technology we are on even footing.

O'REILLY: In your book you say the key to getting the economy started is to get the banks to start lending money. Well, how are you going to do that? You can't force the banks to lend money.

CLINTON: No. Well, first I say that there is two big pots of money that don't run up the deficit, banks and corporate treasuries. I recommended in this book that we essentially let corporations repatriate their money with no tax if they hire more people with it. And if... if they pay the capital gains rate they can do whatever they want to and then we should take that money and seat an infrastructure bank and then take private capital... do like other countries. Most other countries let private investors in from all over the world invest in their infrastructure and just use their government funds as the base to attract a private capital.

O'REILLY: Right.

CLINTON: I think that makes a lot of sense. So you could do that.

O'REILLY: Ok. Now, 28 attorneys general don't want Obama care, suing the federal government; 28 out of 50; all right? I want you to make a prediction. Is the Supreme Court going to overturn that?

CLINTON: I doubt it. I hope not.

O'REILLY: I know you hope not. You're a nice Democrat. You're a loyal guy but the individual mandate is very troubling in the Constitution. Would you say that, is the big hinge.

CLINTON: I look at it an entirely differently. Let's look at just pure economics. The people who are defending the status quo are defending a system that is the only system in the world that charges 17.5 percent to insure... of income every year to insure 84 percent of the people. Every... no one else, no other rich country in the world spends more than 12 percent of income to ensure 100 percent of the people and we don't get better health outcomes.

And we are spotting our competitors a minimum... a minimum of $850 billion a year. It's terrible economics. Under the current system

O'REILLY: You know the solution to that. Let the insurance companies compete statewide. Let everybody get in the game, drive the price down.

CLINTON: You know let your insurance company compete across state lines.

O'REILLY: That's right.

CLINTON: In other words, create a national market for insurance.

O'REILLY: Yes.

CLINTON: While you are saying we should create a state-by-state choice.

O'REILLY: No let the states regulate... you let them regulate what happens there but let everybody compete. And again your party doesn't want that.

CLINTON: Well, I did... I... that's one place where I agree with the Republicans.

O'REILLY: Yes I think you are going to have to defect here, Mr. Clinton. That's what I'm hearing here.

CLINTON: No, no.

O'REILLY: I think you might have to defect. And I'm an independent.

CLINTON: I'm for the individual mandate. That's the conservative position. The individual mandate but I do believe that insurance companies should be able to compete.

O'REILLY: Yes the business as you know they are going crazy. They don't want this, nobody wants it in the business community.

CLINTON: But nobody wants what they have been told about it and they... we have taken long enough to get through it but I think...

O'REILLY: It's not going to happen.

CLINTON: ...there is no reason we couldn't have... the idea that we have to spend 50 percent more than any other country on health care is nuts.

O'REILLY: I'm agreeing with you. Let it go into the free marketplace, you will drive it down.

Now I've got to give you a hard time on the border. Are you ready for a hard time on the border?

You took office '93 about four and a half million people coming across the border. You left office, seven million people a year coming across the border. Why couldn't you secure it?

CLINTON: Because the economy got better. It's a long border. We had a fence, you know in San Diego.

O'REILLY: And it worked?

CLINTON: It worked pretty well.

O'REILLY: Well, why didn't you put it in Brownsville all the way through?

CLINTON: Because, for one thing, back then even the Texas Republicans didn't want it...

O'REILLY: But you could have done it by executive order. Who cares what they want?

CLINTON: I don't know if I could ever not but nobody was upset about then. People are moving back and forth across the Rio Grande.

O'REILLY: I was upset.

CLINTON: I know you are but I think it's a mistake. If you really think we ought to build a whole fence it's the only way to secure it.

O'REILLY: And I do... I do think the federal government has let us down since 1984 in the sense they have not secured the southern border and they could have and they didn't.

Ok, Guantanamo Bay, do you close it?

CLINTON: I'm not sure that I know enough to know that.

O'REILLY: Come on you have been there.

CLINTON: But I... I would... I don't believe I would have ever opened it in the first place but I would like to see it closed.

O'REILLY: Really you wouldn't have opened it in the first place? Where are you going to put all these captured terrorists overseas? Where would have you put them?

CLINTON: Well, I think there are places they could be kept in America.

O'REILLY: But then as soon as they go on American soil they have the rights of the American people under the Constitution. And these are...

O'REILLY: That's not necessarily true. I have a big difference of opinion about what the law should be. I might have tried to change the law on that.

O'REILLY: Ok.

Today Vice President Biden said, actually it was printed today but he told "Newsweek" magazine the Taliban is not an enemy of the United States. And since you had to deal with the Taliban, training Al Qaeda before 9/11. You certainly know what the Taliban is all about. And I believe that the Vice President is wrong. Am I wrong?

CLINTON: Well I think... I don't know that they trained them but they certainly gave them safe haven.

O'REILLY: No doubt.

CLINTON: And they would give them safe haven again if they were free to operate in Afghanistan.

O'REILLY: Absolutely.

CLINTON: And it's one of the reasons I've always supported our mission there. And I think what the Vice President probably was saying is Al Qaeda was our affirmative enemy. They were trying to kill us in America. They were trying to kill us in Iraq and elsewhere and Africa and lots of other places.

And the Taliban itself had not conducted out of area operations against us. That's probably true. But that doesn't mean that I think we should not be really concerned if they were to govern Afghanistan.

O'REILLY: Again.

CLINTON: One of the things that I would be concerned about and always have been with the Taliban is how miserable they made life for so many women and little girls.

O'REILLY: Absolutely.

CLINTON: And that you know... I mean this downright abusive evil. I think it's evil.

(END VIDEOTAPE)

O'REILLY: Now, one correction I misspoke it's $500 million for Solyndra, not a billion.

Now, in part two of my interview with President Clinton, we'll find out what the President thinks of Newt Gingrich and Mitt Romney.

Content and Programming Copyright 2011 Fox News Network, Inc. Copyright 2011 Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.