Updated

This is a rush transcript from "Your World," October 3, 2013. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: We are getting reports -- and, again, these cannot be quickly confirmed -- that, both by the White House, the woman was told repeatedly to get out of the car, get out of the car. She did not. She drove off.

When she got to Garfield Circle, it was the same drill. Get out of the car. This is by Garfield Circle, by the way, when the Capitol Hill Police were surrounding her, repeatedly telling her to leave the vehicle, leave the vehicle. I'm not sure what she said in response, but obviously she didn't get out of the vehicle.

And the more it looked like she was ignoring Capitol Hill Police, obviously, she became an even bigger target of the police that she was presumably up to no good, she wasn't listening. Her vehicle became, as a former Secret Service agent, Dan Bongino, had told me, a weapon in and of itself. And they would not tolerate her just driving aimlessly and wildly around the United States Capitol.

It is very, very weird.

KT, you're here, a former top security official in Republican administrations.

Weird. But they don't take any -- and for good reason -- any chances in the United States Capitol.

KT MCFARLAND, FORMER DEPUTY ASSISTANT SECRETARY OF DEFENSE: No. And they -- and they can't. This is within feet, inches of where senators and congressmen are walking every single day.

The thing, though, that I wanted to talk to you about, Neil, is what worries me is what the world sees now as they look at America. I was just in Egypt last week. And other parts of the world, you think of that that's terrorist incidents are, those are where the streets are unsafe, those are where banana republics, where people can't govern themselves.

Look at the world's image of America in the last couple of months. We have had the Navy Yard shooting. We have got this. We have got government dysfunction. We have got veterans in wheelchairs that aren't being allowed to go to their memorial. It seems like complete dysfunction.

We have members of Congress calling each other terrorists and jihadists and murderers. And it just looks like the entire American model doesn't work anymore.

(CROSSTALK)

CAVUTO: Well, we're generally on pins and needles, and it doesn't take much to snap.

But I'm -- obviously no connection to that and this incident.

MCFARLAND: No.

CAVUTO: But, obviously, the response is, we're not going to boop around here. We're going to be very proactive with this sort of thing.

But I -- I'm wondering -- and this is invariably going to come up -- that the security was compromised in our nation's capital because of what happened with the shutdown. There doesn't appear to be any evidence of that.

MCFARLAND: No.

CAVUTO: But a number of groups are saying, you have got to pay these Capitol Hill police while they're doing their duty, because they're doing it right now without pay. What do you think about it?

MCFARLAND: I think it's nonsense. These are not people who aren't going to say, well, I'm -- wait, I'm going to leave now because I'm not on the paycheck. I'm not going to do my duty to my people and to my country.

That's not going to be the question. But what it does do...

CAVUTO: I didn't want to introduce you there, but Brad Woodhouse, who is the president of Americans United for Change, slightly left-leaning group...

MCFARLAND: Yes.

CAVUTO: ... saying that end the shutdown, pay the Capitol Police.

Would that have made any difference?

MCFARLAND: Let me tell you, the United States military, there was a question, would they be paid? Would their health care benefits be -- would they have to pay more for their health care benefits?

You cannot find one member of the United States military who would say, look, I'm off-duty now or I'm not going to go because -- I'm not going to go do my job for my country, I'm not going to defend my country. These are people who take an oath of office. These are people who committed, yes.

CAVUTO: So, could I ask you a dumb question?

MCFARLAND: Yes.

CAVUTO: When it comes to deciding essential vs. nonessential personnel, you're not paid either way, right?

MCFARLAND: You ultimately are -- catch up. When I was at..

CAVUTO: But, for the moment, whether you're sitting at home or you're going to work like the Capitol Police...

MCFARLAND: Right.

CAVUTO: ... you're presently not getting paid?

MCFARLAND: Yes, but they have always in the past caught up.

CAVUTO: So, retroactively.

MCFARLAND: Retroactively. When I was in government in the...

(CROSSTALK)

CAVUTO: So, that argument is silly?

MCFARLAND: Yes, it's a stupid argument. Look, when I was government in the '70s and '80s, we shut down all the time. And you were terrified if you were going to get one of those little slips in the mail said you are nonessential, because you think nonessential, maybe I'm expendable. So, in fact, more went to work during those shutdowns than ever...

CAVUTO: Are Capitol Hill Police essential? I would assume they are.

MCFARLAND: They're essential. Any kind of law enforcement or protection and security is essential.

(CROSSTALK)

CAVUTO: So, they're like air traffic controllers?

(CROSSTALK)

CAVUTO: These are guys who have to go to work. There's no fooling around.

MCFARLAND: There's no fooling around. And in every case, they have been paid retroactively. Maybe they're not getting their paycheck now, but they don't get their paychecks every single. They get their paychecks every two weeks. So, this is not -- and we assume this will be solved within two weeks. I don't think it's an issue of all of a sudden there's no security.

CAVUTO: But you're worried about how this and the Navy Yard incident and the government shutdown, then everyone calling each other nasty names, it doesn't make us look good?

(CROSSTALK)

MCFARLAND: It doesn't look the American model works anymore. You have leading American commentators and columnists, Pulitzer Prize winners, saying...

(CROSSTALK)

CAVUTO: By the way, I'm sorry.

(CROSSTALK)

CAVUTO: This is the vehicle in question.

MCFARLAND: Yes.

CAVUTO: So, clearly, this woman, who is now dead, she didn't die as a result of a crash or in that vehicle ramming into something. The vehicle looks sound and in good shape, windows blown out, I'm told, but that's a close-up shot of the vehicle from behind security checkpoints.

But she is dead. She was shot. She was killed. And we're told that at both security point checking points, if you will, she was told to get out of the car repeatedly, both by the White House and again at the Capitol at Garfield Circle. She did not, sped off. And the second time, they said enough is enough, chased her, shot her, end of story.

But now to your point and the shutdown and how they're going to tie these together, not a good time.

MCFARLAND: No. The United States looks like we're kind of out of control. We're not. We're not in the least, but it looks like there's sort of a cumulative bit of evidence. We can't balance the budget. We have the Republicans and Democrats screaming at each other calling each other names.

We have -- government is -- quote -- "shut down." We're going to have a crisis in the next two weeks of whether we pay our debt and we raise the debt ceiling. We have got the Navy Yard shooting. We have got this incident today. And it's sort of an accumulated drip, drip, drip of, is the United States running out of control?

It isn't, but the image from other countries who are always looking for some reason to doubt America's position in the world can point to these things and say, see, I told you so.

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