This is a rush transcript from "On the Record," February 25, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Republican Senator Lamar Alexander is crystal clear about reconciliation.


SEN. LAMAR ALEXANDER, R - TENN.: My request is this, is before we go further today, that the Democratic congressional leaders and you, Mr. President, renounce this idea of going back to the Congress and jamming through on a bipartisan -- I mean, on a partisan vote through a little-used process we call reconciliation, your version of the bill. You can say that this process has been used before, and that would be right. But it's never been used for anything like this.


VAN SUSTEREN: Senate Majority Leader Harry Reid today.


SEN. HARRY REID, D - NEV., MAJORITY LEADER: No one has said -- I read what the president has on line -- no one has talked about reconciliation, but that's what you folks have talked about ever since that came out, as if it's something that has never been done before. Now, we as leaders here, the Speaker and I, have not talked about doing reconciliation as the only way out of all this. Of course, it's not the only way out. But remember, since 1981, reconciliation has been used 21 times, and most of it's been used by Republicans.


VAN SUSTEREN: We went to Capitol Hill and Senator Lamar Alexander went "On the Record."


VAN SUSTEREN: Senator, nice to see you, sir.

ALEXANDER: Nice to see you, Greta.

VAN SUSTEREN: And I appreciate you've just rushed from the Blair House summit to right here to your office.

ALEXANDER: I'm still stretching.

VAN SUSTEREN: You're still stretching. Sum it up for me. How'd it go?

ALEXANDER: Well, I enjoyed it. And I'm glad the president had it. Somebody told me after I got here that he and the Democrats did most of the talking. But on the other hand, it gave us, the Republicans, a chance to say we want to cut health care costs and how we want to do it. And that's -- that's a bigger forum, a bigger megaphone than we usually get.

VAN SUSTEREN: Do you think you impinged upon him? Is he convinced that some of the thoughts the Republicans put forward, that he's going to take them and rework the legislation?

ALEXANDER: We'll see. I think on the ideas for cutting costs, about going across state lines, letting small businesses pool their resources, those ideas, I think we could sit down in a day or two and write a bipartisan bill that would really begin to make a difference in running down costs. What I didn't hear in the whole seven hours was that they still think they can afford -- that we can afford to spend 2-and-a-half trillion more dollars on health care. And I didn't hear anybody say we're not going to cut Medicare, we're not going to raise taxes, we're not going to send these big costs to states, we're not going to raise premiums.

VAN SUSTEREN: One thing that I thought was interesting was the discussion about reconciliation. You (INAUDIBLE) you spoke first, was to get that off the table. That's not off the table, from what I heard today.

ALEXANDER: No, it's not. I mean, I said to the president, you know, If you want a bipartisan bill, just renounce the idea of jamming it through. You know, Senator Byrd, who's our senior Democrat, has said it would be an outrage to jam the health care bill through like a freight train. And I never heard that.

VAN SUSTEREN: Were you surprised that he didn't say, You know, you're right, Senator Alexander, we're going to take that off the table, we're going to -- we're going to do this the other way, we're not going to use reconciliation, or, quote, the "nuclear option," depending on how you want to describe it? Were you -- were you surprised he didn't go with you on that?

ALEXANDER: No, I'm disappointed. I'm disappointed. You know, I don't think the president's figured out how to work with the Senate, just to be frank, in a bipartisan way. I mean, Lyndon Johnson called Everett Dirksen, the Republican leader 40 years ago, every afternoon at 5:00 o'clock. And I said in my little remarks that Harry Truman, who was living in the Blair House, where we were today, had the Senate Foreign Relations chairman, Arthur Vandenberg, down once a week to meet with General Marshall to write the Marshall plan. When you want a bipartisan effort, I mean, you form a private relationship and you put it together and -- and -- and the president hasn't figured that out yet with the Senate.

VAN SUSTEREN: Are you saying he's inexperienced?

ALEXANDER: I don't know what it is. You know, all year, I thought either he doesn't want to do it or he doesn't know how to do it. I think he's a very able person. He showed today he knows a lot about health care. But I don't think he knows a lot about how to -- how to -- how to create a bipartisan piece of legislation in the Senate. We do it all the time. Ted Kennedy did it all the time. I mean, he and Mike Enzi, who was there today, the senator from Wyoming, have written 38 bills together.

VAN SUSTEREN: What about Senate Majority Leader Harry Reid? (INAUDIBLE) even get a little testy with you.

ALEXANDER: Well, it did seem like he was a little irritated, but he shouldn't be...


ALEXANDER: Well -- yes, well, it's because I said what he doesn't like to hear. I mean, their bill does cut Medicare by a half trillion dollars and it spends it on a new program. And their bill does raise taxes a half trillion dollars, and their bill does send to states big costs that are going to raise college tuitions and taxes, and it does raise premiums. Now, they have to do all that in order to expand coverage and spend another $2.5 trillion, but they don't like for me to say it.

VAN SUSTEREN: All right, the one thing I'm always curious about is what happens after the cameras go off. We were very much -- we were delighted to have the transparency and see the cameras on this discussion. When you left, did any Democrats come up to you and say, You know, look, we could really work together on this, or did you guys just go your own way? What happened after the cameras went off?

ALEXANDER: Well, not much. Each side went out and held a press conference. Ron Wyden said while we were still there he was going to try to do that, and he's tried to do that from the beginning. I even signed onto a bill he had a couple of years ago. I didn't agree with all of it, but at least it was trying to bipartisan and it tried to rely on the private sector and I wanted to encourage that. So there are ways we could move ahead.

VAN SUSTEREN: One of my colleagues suggested it would have been good, perhaps, if you went on, you know, through the night and sort of basically held all of you in the same room so that the Republicans and Democrats did come together on this.

ALEXANDER: Well, that's not really the way to write a bill. I mean, the way -- the way you do that is you -- is you sit down and -- you know, what Vandenberg and General Marshall said about each other -- General Marshall said, Arthur Vandenberg, one day he was my right-hand man, the next day I was his right-hand man. So you have to have an equal partnership. We haven't seen any of that.

VAN SUSTEREN: So now what? I mean, after -- after today, are you -- are you sort of feeling like, All right, now we're going to move forward, we're going to have health care reform, or are we going to see this reconciliation, basically, a war between the roses, between the two parties?

ALEXANDER: Well, we could have that. What I'd like to see...

VAN SUSTEREN: Well, what are you going to see?

ALEXANDER: Well, what today proved we could see was if the president would put it aside, this big bill, and say, OK, we've identified five, six, seven, eight things we can do to cut costs, let's get that done -- that could happen quickly.

VAN SUSTEREN: Betting man. What's going to happen?

ALEXANDER: I'm not going to try to predict. It all depends on the president. If he wants a bipartisan bill, he can have one. If he doesn't, we'll continue to argue.

VAN SUSTEREN: Senator, thank you, sir.

ALEXANDER: Thank you, Greta.


VAN SUSTEREN: Democratic congressman Rob Andrews at the summit today.


REP. ROB ANDREWS, D - N.J.: The president asked a question about whether we can find agreement on pooling the purchasing power of small businesses and individuals so they can get the same deal that big companies and members of Congress get. And my friend, John Kline, talked about the association health plan proposal. Respectfully, John, I think that what you're talking about with association health plans and what we're talking about with exchanges is a semantic difference. It's a matter of pooling the purchasing power of small businesses and individuals to get a better deal.


VAN SUSTEREN: Congressman Andrews joins us live. I loved the transparency today. I thought that was fabulous.

ANDREWS: I did, too. I think that this is the way government ought to work. It was in the open. People had honest differences. They treated each other civilly. I thought it was a great thing.

VAN SUSTEREN: Too bad we didn't do it earlier.

ANDREWS: Yes, I think we should do it earlier and I think we should do it more often. I think if the next issue is the deficit and debt, we should do that, education. Sunlight really is the great antiseptic.

VAN SUSTEREN: All right, do you...

ANDREWS: And I think it helped.

VAN SUSTEREN: Do you think, in light of the fact it happened today, a little bit later on the sort of long continuum -- do you think that it improved the situation (INAUDIBLE) more likely that it can resolve itself with some bipartisan -- or do you think the lines truly are drawn in the sand?

ANDREWS: No, I did think it improved the situation. On substance, you know, there is very close -- there are very close views on buying policies across state lines, on letting small businesses and individuals buy through these buying pools, on some more movement on tort reform. I think that that's also very probable. These are important and substantive issues. So I think that the prospects of bipartisan agreement improved today.

VAN SUSTEREN: All right, we hear this reconciliation-slash-"nuclear option" all the time as being sort of thrown out there. It hasn't even gotten to the point, though, where the House -- the House would essentially have to agree to the Senate bill in order to have that, do you agree?

ANDREWS: Yes, I think that's right.

VAN SUSTEREN: OK. All right.

ANDREWS: That'd be part of the plan.

VAN SUSTEREN: Is -- is that...

ANDREWS: And of course, the reconciliation bill -- the next bill would then fix the Senate bill. We understand the Senate bill would be the tax. Then you'd carve a hole out of the middle of it and plug the hole with something new.

VAN SUSTEREN: Do you have the sense that within the House of Representatives, that the House of Representatives would vote in favor of the Senate bill, which is different than the one you guys voted on?

ANDREWS: Only if it was fixed. If the Nebraska deal got cut out -- I think the Louisiana thing should get cut out, as well. I have problems with the way the excise tax is done in the Senate bill. I don't think there's enough support for working people to help them buy health insurance. So I think the House would only pass the Senate bill if accompanying the Senate bill were these kind of changes.

VAN SUSTEREN: Is that likely?

ANDREWS: Yes. I think it's quite likely.

VAN SUSTEREN: And in terms of the issues like the Stupak amendment, is that -- how much of an issue is that, having to do with abortion?

ANDREWS: It's a big issue. Look, I think there's universal or nearly universal agreement that no public funds should be used for abortion. I'm a pro-choice person, but I do believe that's the result that we should have here. Now, there is a significant argument over whether the Senate language accomplishes that or not. I believe it does. But I think my friend, Mr. Stupak, would disagree. So yes, that is something we have to work out.

VAN SUSTEREN: All right. I wish I'd asked Congressman Cantor this question because I'm going to ask it of you. Is there anything -- I would have asked...

ANDREWS: I'll question him tomorrow, if you'd like.

VAN SUSTEREN: OK. Is there anything that happened today that you heard from the Republicans where you thought, You know, that makes a little sense? Maybe you sort of -- you would...


VAN SUSTEREN: What would be that issue?

ANDREWS: I thought Tom Coburn's suggestion that we use undercover patients to root out Medicare fraud was a really good idea, if I understand it correctly.

VAN SUSTEREN: Meaning what?

ANDREWS: Well, it means that you take a person who didn't have a broken leg and send him to an MRI center of X-ray center for tests for a broken leg and see what they say. And if they keep treating him as if he had a broken leg, you know, it's a fraudulent treatment. In other words, you...

VAN SUSTEREN: That would -- yes.

ANDREWS: I think it's a pretty cool thing to do, and I think we should write it into the bill.

VAN SUSTEREN: Well, it certainly was fascinating, and I'm hoping that we'll have more of this transparency.

ANDREWS: I do, too. I think this is the way government ought to operate. I think both sides acquitted themselves well. And let's do more of it.

VAN SUSTEREN: Indeed. Congressman, thank you. And good luck, sir.

ANDREWS: Thanks, Greta.

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