This is a rush transcript from "On the Record ," November 12, 2008. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Everyone seems to be talking about Governor Palin, even her former running mate. Now, last night, Senator McCain gave his first post-election interview to Jay Leno on the "Tonight" show. Senator McCain talked about why he picked Governor Palin as his running mate.


SEN. JOHN MCCAIN (R-AZ), FORMER PRESIDENTIAL CANDIDATE: I just thought -- that -- I really believe that Sarah Palin is amongst some, like Tim Pawlenty and Bobby Jindal, the governor of Louisiana. There's a group of young Republican governors and -- mainly governors, but also some in the Senate, that I think are the next generation of leadership of our party. And we're probably going to (INAUDIBLE) Our party has a lot of work to do. We just got back from the woodshed.


VAN SUSTEREN: Well, you heard Senator McCain. The senator also mentioned Governor Bobby Jindal from Louisiana as a Republican leader. Governor Jindal, also attention the Republican governors conference, joins us live from Florida. Welcome, Governor.

GOV. BOBBY JINDAL (R), LOUISIANA: Well, good evening. Thank you for having me on the air.

VAN SUSTEREN: Nice to see you, Governor. All right, Governor, Senator McCain says that you and Governor Pawlenty and Governor Palin are the next generation of the Republican Party. What do you think about that?

JINDAL: Well, I think, certainly, leadership is going to have to come from the governors. We're going to see solutions coming from the states. You know, it's really not important who the messenger is, it's the message, the substance, that's important. As a party, we've got to become a conservative party again on spending, on cutting taxes, on fighting corruption. We've got to offer real solutions to the problems that Americans care about. That's applying our conservative principles to health care, to energy, to the economy. It's not going to be enough to simply say no to the Democrats in Washington, we have to show them that conservative principles work, and I think we can do that in the states.

VAN SUSTEREN: If that is what you need to do, and if you're doing that on the state level, and you say that you have to start doing that, are you saying that the current presidential administration is not doing that?

JINDAL: I'd say, certainly, that Washington is broken. You look at voters, they tell you they trust the Democrats more to cut their taxes, to control spending. For years now, you had a Republican majority in Washington that has defended spending we would never tolerate on the other side. We've made excuses for corruption we would never accept on the other side. The week before the election, our most senior senator was convicted on federal charges.

For too long, we've not offered real solutions. I'm against a single-payer health care system. I'm against government-run health care system. But we got to do more than that. We've got to show the American people, for example, that tax credits, that medical savings accounts can make health care more affordable, more accessible. We need to show them that we're for using technology and paperless records. And that's just one example. We need to show with our actions that we're against the earmarks, the out of control spending.

You know, Republicans went to Washington to change the culture, to change the city. Instead, they became changed by Washington. Now, it doesn't do any good for us to look backwards or to fight amongst ourselves. We need to be looking forward. We've done this before. In the '90s, we offered the country Welfare reform from the state level. We showed people that if you help people go to work and get an education, we can cut poverty rates, we can cut teenage pregnancy rates. We showed them that conservative principles work. The most compassionate thing was to help people go to work, not just send them a check for sitting at home.

We need to show that conservative principles continue to work. We don't need to just copy the Democratic Party. Let's be authentic. Let's show them we have real solutions for the problems that people care about.

Watch Greta's interview with Gov. Jindal

VAN SUSTEREN: All right. So who's there? Give us the who's who?

JINDAL: Well, there are literally -- there are dozens of Republican governors here. You mentioned some of them, Governor Palin, Governor Pawlenty, Governor Barbour. Governor Crist is hosting us here. You've got governors from Vermont, from North Dakota.

The great thing is you get a chance for governors to meet with each other, to hear from each other, tell each other what's working in our own states, to learn from each other, get to meet with business folks, leaders, community activists, as well.

But I can't emphasize this enough. You know, certainly, we've got a patriotic obligation to support the president-elect, support the new Congress. They've been duly elected. They deserve our support. But we also have an obligation as conservative, as Republicans, as Americans to stand up on principle when we disagree. It's always exciting to me to hear from other governors how they're balancing their budgets, how they're cutting taxes, how they're strengthening their ethics laws. We're doing that in Louisiana. And I think as we do that, we'll earn the American people's trust and we'll start winning elections again.

VAN SUSTEREN: Have you spoken to Senator McCain since the election?

JINDAL: I've not. Certainly, we've sent word that -- you know, we certainly congratulated him on his run, thought he gave a very gracious speech on election night. I've not talked to him personally. I obviously wanted to respect his desire to spend some time with his family and decompress. Obviously, he's been through a lot in the last several months.

VAN SUSTEREN: How about Governor Palin? Because she's right down there in Miami with you. Have you had a chance to talk to her at all?

JINDAL: Well, I look forward to seeing her here. She -- we've not been on the same panel or in the same room yet, but I know that will happen. This is obviously a lot of people in a small place. We look forward to talking -- and let me say this. You see a lot of now anonymous Republicans criticizing her. There's no room for that. Look, we need as many authentic conservative voices speaking out. So many people are trying to speculate on who the messenger's going to be. Let's focus on the substance. And what we know is we'll need our governors to lead. We need every one of their voices to be heard. We as Republicans, we as conservatives don't need to be throwing bombs at each other.

VAN SUSTEREN: How many Republican governors are there? I've sort of lost count. I should know from last week. But how big is your organization?

JINDAL: Well, you know, we just welcomed Luis Fortuno, that was elected governor in Puerto Rico down there. So this year, we actually -- you know, all of our incumbent Republican governors were re-elected. It's 20 or 21, depending on how you count that. So a good number of governors. Obviously, we need to get back to being a majority, just like we need to get back to the majority in the House and in the Senate. We still have some work to do. All of our incumbent governors were re-elected this year. It was, obviously, the exception.

But I think the reason that governors are so important -- the Founding Fathers intended the states to be laboratories of experimentation. All wisdom doesn't reside in Washington. We don't need to centralize everything. We don't need a big federal government intruding into our lives.

Governors have to work across party lines to balance their budgets. I pledged we're not going to be raising taxes in Louisiana. We've actually cut taxes six times. Governors have to deliver -- they have to improve education, improve health care. And there are great opportunities for us to show things like accountability and performance and choice work in education. The same principles work in health care.

There are real opportunities. Republican governors across the country have the responsibility for leading their states day by day. It's not just talk. It's not just rhetoric. We can actually show with our actions conservative principles work.

VAN SUSTEREN: But here's the problem, is that all the things we'd like to do -- we'd like to have health care for everybody. You know, we'd like to do these things, but it costs money. I mean, as a governor, do you have the cash to do the things that you want to do?

JINDAL: Look, there's a lot of waste in government. We cut spending in our state by 12 percent. We've cut the number of government jobs by 1,000. We've actually cut taxes six times. I think that'll help us grow our economy. We did the largest income tax cut in our state's history. We've gotten rid of or cut taxes on debt, on new equipment, utilities. We've actually created over 11,000 jobs this year, even despite the tough economic times. And I think what you're going to see as we pursue these conservative policies, we're actually going to see our economy grow. We're going to see our revenues grow. We're going to see people's need for services actually decrease as we give them better-paying jobs with benefits, with opportunities.

Same was true with welfare reform. By providing people with education and a chance to work, we saw Welfare rolls decline dramatically. We actually saw that spending was able to be reduced in many government programs because government was more effective, more efficient. We need to be accountable to the taxpayers' dollars. The problem is not the taxpayers are sending too few dollars to the state capitals or to Washington. The problem is with how those dollars are being spent in the first place.

VAN SUSTEREN: Now, this may not be a direct problem for you, but it's an indirect problem for you. You have your Katrina and had other problems to deal with in your state. But what about the auto industry? Do you have any sort of thoughts on that, any guidance? I realize it's more of a, you know, direct hit on Michigan, but it affects all of us.

JINDAL: Absolutely. You know, a couple of things. As Republicans (INAUDIBLE) as we grapple with the financial crisis and the policies coming from the President-elect, the new administration, it's important that we keep our principles in mind. Two of the issues that have caused the challenges you see in the auto industry, the rising costs of health care, the rising cost of energy, there are conservative solutions to both those fundamental challenges.

When it comes to energy, we believe, certainly, in more domestic oil and gas production but also more nuclear, more clean coal, wind, solar, conservation and biofuels. We need to diversify our energy sources so we're not as dependent on other countries for our energy. That will certainly help some of the auto industry's challenges, but many industries, like the steel industry and many other industries, the chemical industries, many other industries that could choose to invest billions of dollars overseas versus the United States.

When it comes to health care costs, again, another huge challenge for not only the auto industry, several of our employers, both small and large businesses -- you know, I'm for a market-based solution where you've got portable electronic patient records. You revamp the tax code so that insurance is truly affordable not only for the healthy but those with chronic illnesses, with expensive, acute illnesses. We also revamp and we offer medical savings accounts. We offer real outcomes and pricing data in an easy-to-understand format on line so people can choose the providers, the procedures that are right for them and their families.

So there are conservative solutions to the problems that are facing not only the auto industry but several aspects of our economy. As we confront the policies that there'll be presented by the new -- new administration, the new Congress, let's not simply spend money for the sake of spending money. Let's make sure we're advancing conservative solutions to real challenges in our economy.

VAN SUSTEREN: Governor, thank you. And I hope Governors Crist, Palin, Schwarzenegger, Pawlenty (INAUDIBLE) I hope they all don't keep you up too late tonight because I know you guys -- I don't know what -- what's it like at that conference. I can only imagine. Thank you, Governor.

JINDAL: It was great talking to you. Thank you, Greta.

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