Inside GOP House leadership's meeting with Obama

House Majority Whip Kevin McCarthy on GOP leaders' short-term debt ceiling increase pitch to President Obama in crucial White House meeting

This is a rush transcript from "On the Record," October 10, 2013. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: To the White House, a short time ago, House Republican leaders meeting with President Obama so what happened? House Majority Whip Kevin McCarthy was at the White House and he joins us. It's nice to see you.

KEVIN MCCARTHY, HOUSE MAJORITY WHIP: Thanks for having me.

SUSTEREN: So what can you tell me?

MCCARTHY: Well, we had a very frank discussion. We had a difference of opinion, but actually believe the discussion was positive and we're continuing and we're not done. We're going to continue to work through the night, trying to solve these problems. We offered to the president. We said we would do a temporary debt ceiling to move, to get us into discussions for the next five weeks. We can talk about the big crisis inside our economy. We go to conference with the budget, try to move in a stronger place to take care of those drivers that keep rising the debt inside America.

SUSTEREN: So there are really two issues on the table, debt ceiling. That was really sort of the main issue here today, right?

MCCARTHY: Because the 17th is the deadline, right.

SUSTEREN: And the budget has to do with the shutdown.

MCCARTHY: No, no. The shutdown is a continuing resolution.

SUSTEREN: But the continuing resolution is because we don't have a budget.

MCCARTHY: True.

SUSTEREN: That's why we have a C.R.

MCCARTHY: We finally got the Senate to write a budget --

SUSTEREN: But they said you wouldn't go to conference on the budget that they wrote --

MCCARTHY: Everybody points back and forth.

SUSTEREN: Lots of that.

MCCARTHY: So Paul Ryan, our budget chair, will sit down. Patty Murray will put conferees together. Remember, in the Senate, their budget never balances. Ours balances in ten years. They raise a trillion dollars in new taxes. So we're going to have a lot of arguments as we go through there, but we want to move it through. Now, when it comes to the continuing resolution, that's still there, that's what we'll continue to discuss with the president to try to move forward on.

SUSTEREN: From what I understand, the debt ceiling is to keep the debt raised until November 22nd, is that the deal? Is that wrong?

MCCARTHY: November 20th.

SUSTEREN: Sorry. Two days off.

MCCARTHY: Well, that's important. Deadlines are important.

SUSTEREN: All right, that's worse. Isn't that worse?

MCCARTHY: No, no.

SUSTEREN: Mine -- at least my mistake had it open two more days.

MCCARTHY: No, no, no. What you want to have happen here, you want to take that time period so you don't have to come back to this again, that you solved this problem. We you think about the amount of debt we have accumulated, $17 trillion, you can't keep ignoring the problem.

SUSTEREN: I guess the problem is we had this same discussion was it August 2011? Didn't we have the same -- you know, they never do get solved. It's a little bit hard -- I mean can you understand why I might be a little cynical?

MCCARTHY: you can say that, but you know what else has happened with those?

SUSTEREN: OK.

MCCARTHY: We are the only congress since the Korean War to actually lower what we spend year over year. So even though we only have one house, by going through that, we have lowered what we spend. We have taken our discretionary money downward. That means we're improving in that way. Now we've got to talk about mandatory and that's the discussion we want to have for the next five weeks.

SUSTEREN: We're going to have Congressman Van Hollen here. What do you think they think in the House about your proposal?

MCCARTHY: Look. Van Hollen is a very smart guy and he used to run the political operation. He'll have some very keen things to say about it.

SUSTEREN: Does he think it's a very good idea?

MCCARTHY: No. He'll want something clean like the president and keep raising it. I think at the end of the day, though, he'll like what we have to offer because it moves in a different direction and he'll be a conferee into the budget. He can get in the discussions so I would hope he would like that.

SUSTEREN: I guess the big issue then is if the president wants a clean one, he's not getting one under your deal, right?

MCCARTHY: No, no, right.

SUSTEREN: So he's got to give or you've got to give, right? Somebody's got to give.

MCCARTHY: The president always says nobody gets 100 percent. What we walked out with is a good movement.

SUSTEREN: Did you give anything today?

MCCARTHY: We said we would do a short-term debt increase, go into budget negotiations, and for that time period work on all those cost drivers that keep rising the cost of America and get us -- we're talking about tax reforms. When it came to the resolution, we'll continue to talk to you about it.

SUSTEREN: Did he have the attitude, like wow, this is great idea or was he sort of like --

MCCARTHY: You know what he said?

SUSTEREN: What?

MCCARTHY: He didn't say yes and he didn't say no.

SUSTEREN: What was the mood like in the room?

MCCARTHY: You know, the mood was very frank. I mean, we were very honest with one another, which is healthy. The most important part I thought was instead of talking through TV to one another, we're talking with one another. And I thought that was very good. There were times we had a fundamental disagreement, but at least we were working toward something.

SUSTEREN: I think that's good too. It's like talking together is so important.

MCCARTHY: You know, probably the best thing that happened? I know the president wanted to invite everyone down. We went down there with our leadership team and committee chairs and was really a place where it wasn't a place for any theatrics. It was an honest discussion and I thought it was very healthy and a sign that we'll continue the discussion to me was very positive. He didn't say yes, he didn't say no, but we're moving in a different direction.

SUSTEREN: Congressman, thank you.

MCCARTHY: Thanks for having me.