This is a rush transcript from "Your World," February 8, 2018. This copy may not be in its final form and may be updated.

NEIL CAVUTO, "YOUR WORLD" HOST: All right, we were told, in fact, all day today when I was on Fox Business, that the real problem with this budget accord that seemed like a slam dunk in the Senate was the House.

A number of people in the Freedom Caucus, a conservative group, are saying, no, no, no, we can't vote for this. It's just wrecking everything. But we're spending like drunken sailors. And that's an insult to sailors, drunk or otherwise.

And a vote seemed to be about 100 no's, potential no's, in the House. No one figured the Senate could be a problem, until they apparently failed to check in with this next guy, Rand Paul of Kentucky, who has a very, very big problem with this accord, namely for busting some caps which were sort of like a backup, I guess, spending backbone that both parties have abandoned.

The good senator joins us right now.

Senator, thank you for coming.

SEN. RAND PAUL, R-KENTUCKY: Thanks for having me, Neil.

CAVUTO: You're against this. Why?

PAUL: Well, because it spends too much money, borrows too much money.

And, actually, we're going to bring back Obama era deficits. I was elected to combat Obama era deficits. I remember running for office and saying, we're going to have trillion-dollar annual deficits.

That's what we're going to have this year. So, now it's Republicans in charge busting all the spending caps. The Democrats are complicit. Both parties, the establishment want to spend more money.

And I think part of the reason the markets are so jittery is they worry about the long-term imbalance of government debt. We have a $20 trillion debt. And we're going to now adding a trillion dollars to it this year because of this spending deal.

This is a rotten deal and not good for the -- any of those of us who believe that you can get too much debt for a country to bear.

CAVUTO: I'm not blaming this all on you.

I will say, we were down...


PAUL: Let's hope not.

CAVUTO: We were down about 650 points, and word came out about your concern here, and we -- well, you know how we ended, down more than 1,000.

But that some accord is better than no accord, the argument being -- and I think it was advanced at the White House -- that President Trump was signing on to this because, while he had his misgivings, he had more misgivings about all these continuing resolutions that sort of kept the government limping along six weeks at a time and all.

PAUL: Right.

CAVUTO: What do you think of that?

PAUL: I think it's a misinterpretation -- misinterpretation of markets to think that they always just want something passed.

I remember when we had the debt crisis in 2010-2011, when we got the sequester, everybody was like, oh, our -- the U.S. debt has been downgraded because we couldn't come to a resolution. Hell, no. It was downgraded because we had so much debt, and there was nobody talking about fiscal responsibility.

So I think the markets actually...

CAVUTO: By the way, you're right on that.

PAUL: Yes.

CAVUTO: It was downgraded prior to any closing or shutdown.

PAUL: Yes.

CAVUTO: It was the chicanery back and forth that did that.

But continue.

PAUL: And so I'm not advocating for shutting down the government.

I'm also not advocating for keeping the damn thing open and borrowing a million dollars a minute. This is reckless spending that is out of control. And the thing is, is, we think when Democrats are in charge, that the Republicans are the conservative party.

The problem is, when the Republicans in charge, there's no conservative party. And that's kind of where we are now. Someone has to stand up and say, you should spend what comes in. We should balance our ledger.

And that used to be what it meant to be conservative. But a lot of so- called conservatives lose their mind once it becomes a partisan thing and they say, oh, we must govern now.

So they govern by giving us massive new debt. And I don't think that's good for the country. I think, ultimately, it threatens our security, not only our external security, but also the internal foundation of the country is threatened by so large a debt.

CAVUTO: You mentioned losing your mind with this.

But the president could be losing your mind listening to you say this right now, that you're getting in the way. Have you bounced this off of him?


PAUL: I talked to him this afternoon. And we had a good conversation.

And I told him to call up the majority leader, Senator McConnell, and tell him I wanted 15 minutes to have a vote to make a point that conservatives are unhappy with this deal. All they have to do -- and I told him this at 11:00 this morning -- give me 15 minutes to debate, 15 minutes to vote, and we could have been done by noon.

But nobody wants to have it pointed out what an eyesore this deal is and how obnoxious it is to conservatives just to spend good money after bad.

CAVUTO: What he for what you were saying, Senator? Was the president for what you wanted to do?

PAUL: I think the president wants a resolution. And I told him the best way to get to a resolution is, let's get Senator McConnell involved and let's say, why don't you give him a 15-minute vote?

Can we not have--


CAVUTO: Well, that hasn't happened. But that hasn't happened, which lends me to believe that it's not going to happen.

PAUL: Well, we will see.

If they want to stay up until 3:00 a.m., I'm happy to do it for something consider to be important. And that is the fiscal solvency of this country. This country is going to hell in a handbasket with people who don't care enough about the country to restrain their appetite for spending.

We have to do more. There have to be some conservatives left. What happened to the idea of being a fiscal conservative? Where are they? Have we all just given up on it because Republicans are in charge?

We promised the people who gave us money and voted for us that we were going to be the adults that we're going to try to spend less money and balance budgets. And then those people put us in charge. And I hear from them all the time, what happened? Where are the conservatives we thought we were electing?

CAVUTO: It sounds like you're angry at Mitch McConnell.

PAUL: You know the system. And it's not just one person. It really is about the system.

But if I were to call the system a person, I would call it the establishment. And it's a whole lot of people who really cannot see, cannot have enough vision to understand that we cannot continue to spend this way.

We have a debt that is bigger than our economy. We have a lot of good stuff. The tax cut is great. And I think it's going to really stimulate the economy, but I truly believe the markets are jittery because they're worried about the long-term imbalance between what comes in and what goes out for the federal government.

They're also worried, I think, of some inflation returning. And I think also the stock market, frankly, has been overwrought for quite some time.

CAVUTO: You know, Mitch McConnell is as establishment as you can get, right? He's your establishment head of your party in the Senate.

PAUL: Yes, I think what we have to do is, we have to say, are we the conservative party, or are we just like the Democrats?

This looks like a Democrat budget to me. The Democrats are complicit in it. And, frankly, there have been loud voices saying, oh, oh, we have to dramatically increase the military budget.

We have doubled the military budget since 9/11, 2001. We have doubled it. We have had an enormous amount of spending. We just have too much war. The war in Afghanistan is costing us $50 billion a year.

CAVUTO: So, you think Defense Secretary Mattis is wrong when he was bemoaning the plight that the Defense Department is in, and those in the defense community...


PAUL: We would have a lot more money -- we would have a lot more money, and I could give a raise to every soldier out there if we just come home from Afghanistan.

It's time to come home. There is no military victory there. And I said the other day, you guys want to have a parade, let's bring them home from Afghanistan, all 14,000 of them, declare victory. We got the enemy. We killed bin Laden.

Our problem is in our foreign policy is that we don't know how to declare victory. We continue to fight and fight and fight to try to create a nation. And we're just not very good at nation-building. It's time to come home and do some nation-building in our country.

CAVUTO: I'm sure Defense Secretary Mattis will disagree with your assessment there.


CAVUTO: He says that defense is in dire need. And you hear about all the ships and everything that need repairs, et cetera.

You disagree?

PAUL: If you fight in seven different wars simultaneously, you're probably going to be short of things you wants. We have no business left in Afghanistan. There's no military mission.

We also have no dog in the fight in Yemen. The quadranting off and preventing food from going into Yemen has 17 million people on the verge of starving. They had 500,000 people in a cholera epidemic, maybe the world's worst cholera epidemic, recently, all because Saudi Arabia is trying to impose their will on a poor, impoverished neighboring country.

And so there's a lot of war we don't need to be involved with. We need to have a strong military to defend our country, but we don't need to be in involved in everybody's business everywhere around the world.

CAVUTO: On the tax cut thing, if you don't mind my veering a little bit, Senator, a lot of people have expressed concern that companies that have been sharing the wealth and their own tax cut bounty will think twice now, given what has been happening with the markets.

And this pay-it-forward thing we have been seeing, a lot of companies either offering bonuses to their workers or helping customers with utility bills or beefing up the 401(k) contributions, that will stop and that this will put a sting on that.

What do you think of that?

PAUL: Well, I do think the stock market has been overbought.

It's been inflated. I don't think the tax cut has really come into play yet. And we're talking about trillions of dollars in repatriated money. Apple is bringing $350 billion home but themselves.

So trillions of dollars in repatriation money, a trillion, trillion-and-a- half in corporate tax money, that money has yet to begun to chase goods and create jobs in our country.

CAVUTO: Right.

PAUL: There's going to be enormous growth in the next year. The stock market worries a little bit, though, that some of that could get out of control and lead to inflation. We have had low interest rates forever. They have been managed and made to be artificially low.

They're someday going to adjust one day, and there is going to be a reckoning. But that's one of the reasons why I don't want a $20 trillion debt, because 5 percent interest rates would be devastating. But I have lived through 5 percent. I have lived through 10, 11, and 12 percent interest rates.

CAVUTO: Well, you and me both.

Finally, if they don't grant you your wish, that is, they don't allow this caps vote, what are you going to do?

PAUL: Well, there's only so much I can do.

And this is the silly thing about it. I can keep them here until 3:00 in the morning, but I will make them listen to me, and they will have to have me to listen to, because I'm going to talk about government waste later on this evening. And they're going to have to listen to me talk about how William Proxmire in 1968 was talking about waste and how it hasn't gotten any better, because our budget process is broken.

We don't individual spending bells. We glom them all together, and they say, take it or leave it. Eat it or just shut up. It's a binary choice. You have got no choice in this. Just vote for it and go on your merry way.

But you know what? This is important for the country not to have a debate about it, not to ask questions about it. Who would we be if we were elected and we just say, oh, yes, here, I'm a rubber stamp, just whatever you want, and then I go on my merry way.

Somebody has got to stand up and say, enough is enough. We spend way too much money and the debt is too large.

CAVUTO: Is anybody going to be fighting that good cause with you?

PAUL: We will see. I think there will be.

I think already in the House you have seen the House Freedom Caucus vote unanimously.

CAVUTO: Right.

I was talking in the Senate.

PAUL: Those are -- those are the conservatives.

The group of conservatives in the Senate is smaller. But I think they will be, I would predict that if I get a vote on my amendment, 15 to 20 votes. Those will be maybe the same people who vote against this deal.


PAUL: So it's not a majority. But it means that there's some hope for the country that there are some people in Washington, not a majority, but there are some people in Washington who care about the debt and care about the spending.

CAVUTO: Rand Paul, thank you very, very much. Good seeing you again.

PAUL: Thanks, Neil.

CAVUTO: Senator Rand Paul.


Content and Programming Copyright 2018 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2018 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.