This is a rush transcript from "On the Record," March 5, 2013. This copy may not be in its final form and may be updated.  GRETA VAN SUSTEREN, FOX NEWS HOST: Texas Governor Rick Perry also blasting ICE over the release of illegal immigrants. He calls it a federally sponsored jailbreak. Governor Perry joins us. Good evening, Governor.  TEXAS GOV. RICK PERRY: Hi, Greta. Good evening.  VAN SUSTEREN: All right, Governor, do you want to tell us what federally sponsored jailbreak means?  PERRY: Well, when you start turning people out, not coordinating with the local governments at all -- you know, we've got fusion centers and these joint operations centers along the border with federal, state and local law enforcement. And we've been working together throughout the years, and now it's silence out of our federal counterparts.  Michael McCaul, the chairman of the House Homeland Security Committee, has tried to get this information, as well. And there is no information forthcoming from DHS about who these people are, what kind of crimes they've committed, where they're being turned out, and that is very troubling not only for our law enforcement, for the citizens across this country. So I don't know how you would describe it as anything other than a federally sponsored jail break.  VAN SUSTEREN: Well, if this is such an urgent crisis, what I don't get is that someone who has the authority, like a House committee, a -- now with the majority is Republican, as we now -- if they want to find out -- they just have to demand someone come from ICE and tell them. If the person won't show up, you subpoena them. There's all -- lot of sort of exchange of letters and exchange of insults, but when is Congress, if it wants to learn something, simply going to demand it?  PERRY: Good question. And I think, you know, Michael McCaul, who's one of the most knowledgeable about border security and the issues dealing with law enforcement that we have, a Texan and someone who I greatly admire -- when he makes those types of inquiries and the President of the United States, through his secretary of Homeland Security, basically flips him off, I don't get that. I think it shows such a lack of respect not only for Congress, but a lack of respect for the states.  And again, you know, whether it's Medicaid expansion or whether it's this law enforcement issue, the administration does not trust the states, and that's a huge problem.  VAN SUSTEREN: Well, who has custody of these people who are suspected of being illegal immigrants? Is it the federal government? And are they there pursuant to some sort of judicial process? Because if they are, I would think it would have to be a judge that lets the person go, and it would be upon application by ICE or by someone.  PERRY: These are ICE detention centers. And you're absolutely correct. I don't know how you just turn people out upon the streets without some type of judicial intervention.  So again, a lot of questions here. But the most important one is that we don't know who these people are, Greta. We've made the request. We've asked ICE and all the way up to DHS. Now, we did get a response back from Secretary Napolitano, and she gave us kind of the carpet-bombing approach, if you will, that there's going to be huge discombobulation and lots of problems. And you know, we've heard and saw all of that, and the fact of the matter is, a lot of that's just been hyped up.  But when you start talking about turning loose individuals who could be quite criminal in their nature, that's a big problem. And this administration needs to be thoughtful about how you deal with the sequester issue and cutting and prioritizing. We do it in the states every day.  This seems to be a plan to try to scare as many Americans as we can, to try to put as much pain onto people, whether they're individuals who are being furloughed from some fairly important jobs. I think this president's got a political agenda that he's driving, not one that's looking to solve problems in this country.  VAN SUSTEREN: Well, John Morton is the head of ICE. He is a former federal prosecutor, not known to be soft on crime. This is not a guy who's soft on crime. He doesn't sort of let people go. Obviously, there's something going on, some sort of communication problem, some sort of finances problem, or there's some problem. But it's deeply disturbing to the American people as the two political parties fight over it, and we don't get the straight story.  PERRY: Absolutely. And it's a big problem for people out here who are trying to make ends meet and they're seeing Washington with this absolute out-of-control spending habit, and they're the ones that are paying the price for it, not to mention people who are highly concerned about their family's safety when they see these stories about individuals who are detained. And when you're talking about people who are detained, you're talking about individuals who have some criminal element to them.  VAN SUSTEREN: All right, now, let me turn the question to you. You mentioned Medicaid expansion, and you had said, I think as long ago as July, that you were not going to accept the offer to expand Medicaid, which is the federal government pays for. Governor Rick Scott of Florida has changed his mind. Governor Chris Christie -- I don't know if he changed his mind, but accepting that Medicaid.  What do you say to -- why do you think those two governors are doing it? What's -- and why aren't you?  PERRY: Well, we looked at this rather intently. The legislature just over the course of the last 24 hours in Texas and the Republican caucus overwhelmingly support the position of not expanding Medicaid. It is a broken system.  We have asked the federal government for years to allow us the flexibility to be able to put these programs into place, but the fact is, it's a broken system. It's going to cost trillions of dollars to implement this program.  But Texans are not going to be blackmailed into expanding a program that then the federal government is telling us they're going to give us all this free money. Greta, they can't keep criminals in jail today, much less be able to have extra money to pass out to these states. So the idea that money is going to be available for expanded Medicaid is a pipe dream.  VAN SUSTEREN: All right, are you saying that Governor Rick Scott has a pipe dream, and Governor Chris Christie has a pipe dream? Both Republicans have changed their mind? I mean, why do you think that? And let me also add that your former deputy controller, Billy Hamilton, described expansion as smart, affordable and fair, and this was just about a month ago. So your former state controller thinks it's a good idea and two Republican governors do.  PERRY: Well, there are a lot of people that may think it's a good idea, but we've looked at the facts. And this is not -- this is just hard, cold facts. We know what this is going to cost. This is the same administration that said the "ObamaCare" would not cost the American people one dime more. We know now that over the next 10 years, it's going to be over $8 trillion worth of costs to the states and the federal government, and that's money we don't have, Greta. We're kidding ourselves if we think that we have that money available.  VAN SUSTEREN: Is it -- do you think that these other governors are accepting it because for the first, I think, three years, the federal government says, We're going to pay all? It's -- you know, We're going to pay all, but I think it's in the next year, all of a sudden, suddenly, that the states begin having to pick up the freight. Is that what you're worried about, not the first couple years, but when you have to start picking up the freight?  PERRY: What I worry about is a federal government that's making promises that it can't live up to. And again, I go back to, we are in a period of time here where we're turning out criminals out on our streets because we don't have the money to keep them in. Yet somehow or another, this money is going to magically show up? It's not, Greta. This money is either printed, which devalues the dollars that we have in our pocket, or it's borrowed from countries like China. Either one of those I think are bad -- bad results.  VAN SUSTEREN: So why do you think -- I'm still confused, though. Why do you think Governor Rick Scott changed his mind?  PERRY: I don't know. You'd have to ask Rick. You know, he seems to think that he's going to get some flexibility out of the federal government, which I -- you know, again, you're going to have to ask him about that.  We already are able to do that, which brings up -- if you give a waiver to one state, why couldn't another state be able to do that without going and asking, Mother, may I, to the federal government? This one size fits all or you have to come to us and beg us for your money back is one of the things that has always been a great consternation to governors as we deal with the federal government.  We know best how to run our states. That's the beauty of the 10th Amendment. And Washington is...  VAN SUSTEREN: Absolutely, no to expansion in Texas? You're not going to change your mind.  PERRY: I don't see any way in the world that we're going to take this proposition of the federal government. Medicaid program is broken. Now, if the federal government wants to sit down and talk to us -- and I've offered up options over the course of the years -- block granting back to the states to allow us to come up with solutions like health savings accounts, responsibility programs, co-pays, all of those -- we could put substantially more people under health care. But this administration and this bureaucratic mess that's at HHS in Washington, D.C., is never going to allow that to happen.  PERRY: Hope springs eternal, but I doubt it.  VAN SUSTEREN: Governor, always nice to see you. Thank you, sir.  PERRY: Thanks, Greta. God speed.
Texas Governor Rick Perry sounds off on ICE's release of illegals, protests against his refusal to expand Medicaid under ObamaCare and more.