Sen. Rand Paul: People are tired of empty promises and saying, 'We don't believe you, Mr. President'

Obama's America on the right track? Not so fast ...

Sen. Rand Paul on President Obama's rosey State of Union that insists America's on the right path, despite income inequality. #SOTU

This is a rush transcript from "On the Record," January 21, 2015. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, 'ON THE RECORD' GUEST HOST: The state of our union is not good according to a recent poll that rejects the president's claim that his policies are putting the country on the right track.

Good evening, everybody. I'm Martha MacCallum, in for Greta Van Susteren.

59 percent of Americans new say the country is on the wrong track. This, in a new NBC/"Wall Street Journal" poll released just hours before the president walked up to that podium and gave his State of the Union. Look at these numbers. They reveal most Americans are not nearly as optimistic as the president is. Why are Americans so sour on the direction that the country is headed in and is the president taking us down the wrong path?

Let's talk about it. Senator Rand Paul joins me.

Senator, good to have you with us. Good evening.

SEN. RAND PAUL, R-KY: Thanks for having me, Martha.

MACCALLUM: Obviously, when the president goes up there for the State of the Union, he's going to try to make people feel good about how things are going. He feels good about a number of things. Isn't that part of his job to set the tone and say things like the shadow has passed?

PAUL: Yeah, maybe, but I think people are tired of just being told things and asked to believe things when is it appears as if there's a lack of sincerity on the president's part. I hear those things, I hear those promises. He's going to give free school to everybody, everything is going to be great, the world is improving, but there tends to be a lack of sincerity. I think people are just tired and saying we don't believe you, Mr. President.

MACCALLUM: So you have been discussed as a potential candidate in 2016. If you went up there with things the way they are now, unemployment numbers as they are now, what would you have said to the American people in this position?

PAUL: I would say the way we stimulate the economy and the way we make and create millions of jobs is to have a large tax cut for everyone. We don't punish one class versus another class. We just leave a ton of money in the private marketplace. We have to have government, but government is not good at doing stuff. Think of the post office. So we should minimize what government does. We should maximize the marketplace. That means having a significant tax cut. I would stimulate Detroit, which has significant problems, by leaving a billion dollars in Detroit and not having them send it to Washington. It would be much more productive left at home.

MACCALLUM: You have a bill that is a bipartisan bill that would lower corporate tax rates. And start there. The president says he wants to get rid of loopholes. Is there any common ground here? Is he going to respond to your bill? Will you be able to put together something?

PAUL: Maybe. I called the president about three months ago. In 2005, he voted for a bill that's similar to mine. I'm working with Barbara Boxer on it. What it would do is lower the tax to bring your profit home. There's $2 trillion of American profit overseas and it's just staying there because our taxes are so high. This would be an enormous private stimulus. And it also would bring some tax revenue in that we could put into the highway fund, which is short. In essence, this is a great bipartisan bill. It builds roads and bridges, it lowers the tax rate, and it brings in new tax revenue. What's not to love?

MACCALLUM: There's been no indication the president wants to lower corporate taxes. None at all.

PAUL: Except for the fact that he was for this and voted for it in 2005. I'm an optimist and keeping my fingers crossed and I will continue to try to get the president on board.

MACCALLUM: Let us know how that works out.

(LAUGHTER)

So I saw two major thrusts last night. One was the economy is doing well. It's a victorious moment for the White House in the president's opinion. He feels things are moving in their direction. The other was terrorism is not so bad, we have it under control. We're doing well. He said we're stopping the advance of ISIL. I can't find any military voice who can confirm that. In fact, what most people say is that ISIL is growing, that they are getting new recruits all the time. That people who are abandoning other al Qaeda groups thinking these guys have the money and the will and the power and they are joining forces with them. What do you make of that?

PAUL: I fundamentally disagree with the president when he says terrorism is on the run and al Qaeda is decimated. When he glosses over his foreign policy and he has all these foreign policy failures and he acts as if they don't exist. Libya is a jihadist wonderland. Hillary's war was there with a failure. The jihadists swim in our swimming pool. In Yemen today, another one of his successes, the prime minister or president has been kidnapped. It's a disaster. Yemen is on the way to becoming a failed state. Libya is a failed state. This is the result of Obama's foreign policy. So, no, I think he missed a few things last night in his speech.

MACCALLUM: So when you look at your own ranking, when you look at the polls for potential candidates for 2016, you're low on that list at the moment. What are you going to do to change that?

PAUL: You know, we will make a final decision this spring whether to do it or not. Some of that depends on whether the ideas are resonating. But I think there's a growing movement in the Republican Party that says our foreign policy should believe in a strong national defense, strong enough to deter all attacks, but it doesn't mean we should be involved in every war everywhere. And that Hillary's war in Libya was a mistake. The civil war in Syria is messy with no clear-cut good guys on other side. There are two million Christians in Syria. If you ask them do they want Assad to fall and have ISIS take over, they prefer the evil they know rather than the evil they fear, and the unknown of having ISIS. So, no, I think there is going to be a place within -- there is a place in the Republican Party for someone who believes in a strong national defense but not a reckless offense.

MACCALLUM: We'll hear more about that in the future, I hope.

Good to see you tonight, Senator. Thanks so much for being here.

PAUL: Thanks, Martha.