Sen. Rand Paul hoping for coffee diplomacy in government standoff over budget

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

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight's meeting, which the White House has described as an important conversation, was a dud, nothing resolved, but Senator Rand Paul hoping some Capitol coffee talk will help. We spoke with Senator Rand Paul a short time ago.


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

SEN. RAND PAUL, R-KY.: Good to be with you, Greta.

VAN SUSTEREN: All right, Senator, a lot of people trying different sorts of ideas to try to get everyone to figure out a solution for this problem in Washington. And I'm curious. You have sent a "Dear Colleague" letter to your colleagues suggesting maybe getting together tomorrow. What is your letter?

PAUL: You know, I think I'd like to -- we're going to have coffee tomorrow at 11:00 AM on the steps. I think, really, people think this is one party or the other. My understanding is the American people are frustrated with both parties not talking. And I think there's some symbolism to it. But I think we could also have coffee and talk about, what is the final position that both sides would accept in order to get there?

There's already rumblings of this, that there is a position that we could all come to, but it would involve negotiating. The problem I see right now is the other side keeps saying they will not negotiate. Well, how do you find compromise if you're not going to negotiate?

VAN SUSTEREN: Why won't they negotiate? Is it that they feel that they have such a strong position, they've given up so much for so long, or do they want to bloody the nose of the Republicans?

PAUL: You know, I'm not sure, but I think it's an untenable position because I think, ultimately, Americans do want us to talk to each other. They recognize we don't agree on everything. And they do want us to find a middle ground.

But right now, we started out with us wanting no ObamaCare and them wanting 100 percent of ObamaCare. I think, really, there's going to be somewhere in the middle that we could find that fixes some of the worst parts of ObamaCare. And I really think all it takes is a little bit of discussion.

VAN SUSTEREN: Where is that middle ground do you see? If you could sort of step ahead or step outside the problem, what do you think really is sort of attractive that both parties could and should agree upon now?

PAUL: You know, I think we've already hit one of them, or we should have. We talked about a one-year delay to sort out some of the differences. The Democrats didn't accept that. We also talked about a delay just of the individual mandate. They didn't accept that, either.

I think there's also discussion of whether or not getting rid of the medical devices tax -- you know, 80 senators, including about 20 Democrat senators, voted -- maybe 30 Democrat senators voted to repeal the medical devices tax. I think that would go a long way towards getting rid of a tax we think will really hurt jobs and will really be onerous on innovation in medical technology.

VAN SUSTEREN: One of the proposals that I understand is coming out of the Democratic side of the aisle is that -- you know, vote on a clean continuing resolution, and then they are willing to figure out ways to sort of tinker with ObamaCare to make it what may be a better -- a better bill than it -- a better law than it is now, in their view and your view, as well as discussing the tax on medical devices.

I mean, it sounds like they're willing to sort of separate that discussion out. But is it that the Republicans don't trust the Democrats, or you have no leverage if you get to that point?

PAUL: Well, see, the problem is, we've had, you know, at least a year, maybe two years to fix some of these problems, and they don't bring them to Congress. They go around Congress, and the president just does what he wants to do, I think, in an extraconstitutional or illegal fashion. He just does what he wants to do by executive fiat. And so I'm not sure they will come to Congress.

And here's the other problem. We wouldn't be here with this shutdown if Harry Reid had been passing appropriation bills. If he have passed all of his appropriation bills this year, you couldn't shut down anything.

So people complain about, Oh, these terrible people shut down government. Well, if Harry Reid had done his job and passed the appropriation bills, there would be no spending to shut down or to hold hostage.

VAN SUSTEREN: Well, things have gotten rugged today. For instance, you tweeted "The president sent more security to World War II memorial than he sent to Benghazi." Senator Durbin, on the other side of the aisle, said, "Every parent knows that if you give in to a spoiled child" -- and I guess he was referring -- he's making a slap at the Republican Party. "If you give everything to a spoiled child today, it will be worse tomorrow."

So both sides are -- you know, they're taking out the knives.

PAUL: Yes, well, I don't think we've completely gotten rid of politics. We had a little fun with that tweet today. And I actually still am laughing, thinking about it.

But it's kind of serious and kind of sad. There was a time during the attack in Benghazi when there were five people there protecting four people and the ambassador. There weren't many people protecting him. And today, there were seven people trying to keep the World War II vets from seeing the monument.

And somebody did make a political decision. I promise you that someone didn't get all the employees out there putting barricades up for hundreds of yards if they didn't want to make a political statement. They're trying to blame this on Republicans. But in the end, it's just stupid to block an open monument and say, Oh, you can't go look at the monument.

We have thousands of veterans coming here, traveling across the country, actually some being flown here. And then we're going to not let them look at the monument? Absurd, whoever made that decision.

VAN SUSTEREN: Is the fight over the debt ceiling, which is our -- next on our horizon -- is that going to be more rugged than this battle?

PAUL: You know, I think all of these things should have some kind of reform associated with them. Now, the Democrats say, We won't be held hostage. We won't negotiate. Well, thing is, they won't negotiate when there is no deadline. And even with a deadline, they're not willing to negotiate.

But to put this in perspective, this isn't just about paying interest. It isn't just about slowing down a small portion of the government which is closed down now. It's about a government that spends a trillion dollars every year that we have to borrow. It's about a $17 trillion debt. It's about fiscal responsibility.

So this is not a small matter. This has been accumulating for some time. Some of us think that the very financial structure and stability of the country depends on doing something about this debt. So we don't do this lightly just because it's for, you know, partisan reasons. I do this because I'm truly worried about the fiscal stability of our country.

VAN SUSTEREN: Is there any sort of sense of friendship across the aisle right now in the Senate between Republicans and Democrats? Is it really sort of divided? What's sort of behind the scenes? I know people oftentimes think we in the media hate each other on other networks, but we're oftentimes friends, you know, in private.

Is it like that in the Senate?

PAUL: I think it's much less acrimonious than you would think. People are pitted against each other. Even sometimes the very person who might be calling you an anarchist on TV, 20 minutes earlier was saying, Well, how's your family doing, and we very friendly.

So there's actually, I think, more rapport than you would think if you just watch television. I think there could be more, though. That's why I offered a year-and-a-half ago to have a regular lunch where Republicans and Democrats came together for lunch and breakfast. I'm not, you know, Pollyanna thinking, Oh, we're all going to be singing, you know, kumbaya and be -- you know, getting everything done. But we would get more done if we had a little more interaction between the two of us.

VAN SUSTEREN: One quick last question. Any takers on your coffee for tomorrow?

PAUL: A few. I'm still hoping that it becomes a bipartisan coffee. We have invited every Democrat and every Republican. And really, it doesn't have to be any high-powered thing. It's sort of chatting, having some coffee and saying, What would it take for you to reopen government? We want to, but what would it take? What is -- what is something we could negotiate?

VAN SUSTEREN: Do you have a "maybe" from a Democrat?

PAUL: You know, some. But a few have said that they don't want to appear to be negotiating. And I think that's a problem because the thing is, is I want to appear to be negotiating because that is really what the American people want us to do. They want us to talk to each other and find a middle ground.

And so I hope people will show up tomorrow. It isn't a high-pressure thing. We're trying to make it a one-on-one, just have some coffee and see if we have any ideas that might work together.

VAN SUSTEREN: Senator, thank you. Nice to see you, sir.

PAUL: Thanks, Greta.