'Leadership by fear-mongering and intimidation'? Did the White House intentionally mislead the public on the sequester?

This is a rush transcript from "On the Record," April 2, 2013. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight: The O.K. Corral, a showdown in the White House briefing room. It's Fox's Ed Henry versus press secretary Jay Carney!


ED HENRY, FOX NEWS WHITE HOUSE CORRESPONDENT: Can you give us an update on the sequester because yesterday, the Customs and border protection (INAUDIBLE) said that they're actually postponing furloughs and overtime cuts for border patrol agents. I thought in February, when Secretary Napolitano came out here with you, she told us it was dire, these border patrol agents were going to be furloughed and that we were going to be less safe because of that.

JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: Look, I don't think we can maintain the same level of security at all places around the country with sequester as without sequester.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Well, I think both are true. What is -- what is a fact is that when you're dealing with these kinds of across-the-board forced budget cuts in the middle of the fiscal year and you're having to make all sorts of adjustments to account for them and to reduce your expenditures accordingly, you know, it's a moving picture. And you know, what -- and that can be on the plus side where furloughs may take place a little later or on the minus side, where things may be more immediate.

NAPOLITANO: Yes, it'll be like a rolling ball. It'll keep growing.

CARNEY: Feel free to convey to your readers and viewers that the sequester doesn't matter and then -- and then explain...


CARNEY: ... then explain...


CARNEY: ... said it wasn't dire.

HENRY: The secretary came in here and said that we were going to be less safe!

NAPOLITANO: Put simply, the automatic budget reduction mandated by sequestration would be disruptive and destructive to our nation's security and economy.

CARNEY: People were going to be crossing the border because there were less border patrol agents. And then they announced yesterday, Actually, we're not doing that. So I'm not saying it's not important. I'm saying -- I'm saying...

HENRY: (INAUDIBLE) mislead the public.

CARNEY: Absolutely not. And I'm saying that this is -- I mean, you're editorializing enormously in that, but the...

HENRY: How so?


HENRY: February 25th, she said...

NAPOLITANO: If you have 5,000 fewer border patrol hours or agents, you have 5,000 fewer border patrol agents. That has a real impact.

HENRY: Those are her words.

CARNEY: Right.

HENRY: It's not politicized. And how is that not the case? They announced yesterday they're not doing that!

CARNEY: Well, but there are reductions, and whether it's those border patrol...


CARNEY: Go ahead and report that, Ed. We've make clear -- listen...


NAPOLITANO: If you have 5,000 fewer border patrol hours or agents, you have 5,000 fewer border patrol agents. That has a real impact.

HENRY: And we're not doing that.

CARNEY: Talk to the -- talk to those who have been laid off in the defense industries. Talk to those who have been furloughed in the...


CARNEY: Look, you can obviously go to DHS and...

HENRY: Yes, she said we're going to be less safe.

CARNEY: Right.


VAN SUSTEREN: Well, it certainly seems like a simple question! Did Homeland Security Secretary Janet Napolitano and the Obama administration intentionally mislead us or not?

Former congressman Allen West joins us. Nice to see you, sir.

ALLEN WEST, FORMER CONGRESSMAN: It's always a pleasure, Greta. How are you doing tonight?

VAN SUSTEREN: I'm very well. And I guess it's a two-part question. Number one is, did they mislead us, and number two, whether you think, if, in fact, you think they misled us, that it was intentional rather than accidental or even uninformed.

WEST: Well, I think that what you witnessed was a very horrible kabuki dance being done by Jay Carney. And without a doubt, they did mislead the American people and they continue to attempt to try to mislead the American people through a leadership by fear-mongering and intimidation, when we know that this whole thing about sequestration is just about a 3 percent cut on the actual growth of government.

But Janet Napolitano and Jay Carney should listen to this. Climate change musical expenditure, $697,177, funding for robotic squirrel studies, $325,000, $947,000 for funding of a Mars menu out of NASA, $1.6 million spent on NASA video games. And we also know about this study of obese lesbian alcoholism.

So you know, I don't know what they're talking about as far as this whole thing about furloughing. The only people that are really being severely affected are veterans and people in the military, which should be the number one priority for our federal government is to provide for the common defense.

VAN SUSTEREN: All right. Well, what would be the motive to intentionally do it, if, indeed, it were intentional? I mean, I've gone through the list. You've got Eric Holder said that there were going to be furloughs of Bureau of Prisons staff. That didn't happen or it's not going to happen. You've got Janet Napolitano, Secretary Napolitano, on the border. You've got Education Secretary Duncan saying things about education at least hasn't happened. Everyone doesn't think it's going to happen. You've got the -- you've got issues about airport delays and stuff.

You know, if -- what would be the point, if it's intentional, to do it intentionally because they know they would get caught. It's not going to happen. Is it that there are no consequences?

WEST: Well, first of all, let's be very clear. The only people that are reporting this and, quote, unquote, catching them at this is this new station that we're talking on right now. You're not going to hear this on any other mainstream media outlets or some of the other cable news outlets.

This is all about continuing to spend the American taxpayer dollar, and when you look at the fact that something I thought was an April Fool's joke, when the president comes out and says we're going to have national financial capability month in April -- well, this really is national take away from the American taxpayer more of their hard earned capital to give it to Washington, D.C., to wastefully spend because we know what happens on the 15th of April, and if the American taxpayer is late, you're going to hear from the federal government, but yet we still have not gotten a budget from the president and from the White House and they're late since the 4th of February.

So again, this is about responsibility. This is about continuing to want to see this out-of-control spending that's coming out of Washington, D.C., the almost $7 trillion of debt that has been incurred since January of 2009, the continuation of these trillion-dollar-plus deficits. And what do we have? We'll continue to operate on a continuing resolution, not a budget proposal and a budget plan.

VAN SUSTEREN: Well, what I don't get is this. I mean, a lot of -- I mean, we go through -- night after night, we go through a lot of waste, we go through a lot of fraud, we go through some programs I think most people think are sort of silly if we're -- you know, if we're studying the sex life of a fly or something, I think a lot of people would think that shouldn't be public funds, even if there's, you know, a scientific reason for it, we can find private funds for it.

But I don't -- what I don't understand is that at some point, we're going to -- it's going to -- we're going to implode. You can't keep spending more than you have. I mean, that -- you know, that -- that is true. And you're going to implode.

Do you believe that the president's administration just thinks that day will never come, or do you think that they're hoping that the economy gets so revved up that we're suddenly going to get flush with cash from revenue from tax receipts?

WEST: I think that they believe that the American people will not come to a realization that that day will come. Look, our monetary policy is horrible. Everyone is complaining in Washington, D.C., about $85 billion of sequestration. We're printing about that much money for a month to buy up our own Treasury and mortgage-backed security debt. So that's almost a zero sum.

Our monetary policy is horrible. And so we have an artificial economy. We have money that is circulating, and everyone keeps touting about Wall Street doing fine, but our small businesses are not. As a matter of fact, if you go to the American Action Forum, you'll find out that the federal government just instituted $218 million of new regulations just in the last week.

So the message is not getting through to the White House or through the people in Washington, D.C. We are bankrupting this country. We're bankrupting the future for the next generation, and sooner or later, the bill payer is going to come. We see what happened in Cyprus. We seen what's happened in Greece and what's happened through the euro zone.

VAN SUSTEREN: Well, I may be the only one who thinks it, but every time everyone says that the stock market is doing well, I always think to myself, yes, the stock market is great for those who actually have money who can put it in the stock market. But a lot of Americans just simply don't have that luxury. But I'm going to take the last word on that, Congressman. I've got to go. Nice to see you, sir.

WEST: Yes. Always a pleasure. Thank you, Greta.