This is a rush transcript from "On the Record," October 4, 2013. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight, Texas Governor Rick Perry is in California. He joins us. Nice to see you, sir.

TEXAS GOV. RICK PERRY: Good to be with you, Greta. Thank you.

VAN SUSTEREN: Governor, so what's the message? You're off to give a speech in California, but are you trying to rip off the business in California?

PERRY: Not at all. Actually Americans for Economic Freedom 501-C-4 that was created about 60 days ago asked me to participate and talk about blue state versus red state policy. So we are out doing just that. Dr. Art Laffer, one of the most renowned economists in the country, has joined with us as we talk about policies that really drive the economy of the country, and that the states are the laboratories of innovation. Don't look to Washington, D.C. for the issues that are challenging this country. Look to the capitals of the states and those governors and legislators, particularly red state governors. They are the ones coming up with solutions, particularly on job creation and the economy.

VAN SUSTEREN: Play a hypothetical with me. Assume that you are tonight the president of the United States and we have all the discord in Washington and all the problems. What would you do? How do you fix this?

PERRY: You negotiate. You sit down. I have been the governor for coming on 15 years. And the idea that I would have stood up in the legislature and say it's my way or the highway is just beyond me. I understand politics and I understand not giving up your position. But we have a country to run here. The President of the United States is the leader. And for him to basically be so bullheaded as to say I'm not dealing with you. And that's what he said. He and Harry Reid said they are not going to negotiate. That's not leadership. I beg to differ with them. Find some middle ground here. As far as I can tell Boehner and his crew had come forward with pieces of legislation to keep government working as we go forward.

VAN SUSTEREN: Let me ask you this.

PERRY: I don't understand what's going on.

VAN SUSTEREN: We only have a few minutes. But what are the Republicans willing to negotiate? What are they will to throw on the table? They want to defund ObamaCare or oh alternatively delay the mandate. Where did they negotiate beyond that?

PERRY: Well, again, the details are there on the table with Speaker Boehner and the Republicans. I think the idea -- when you have the unions as much against this implementation of ObamaCare as it is, when the teamsters talk about it being the demise of the 40-hour work week, when you have Joe Machin, who was a governor and understands the art of negotiating, when he says it makes sense to push this off for a year, there is room for negotiation here.

The President of the United States is more interested in playing politics, shutting down World War II Memorials, not paying for the Air Force to play in the Air Force/Navy game this weekend. USAA had to pick up the cost of that. That's the type of political gimmicks I think the American people will see through in a hurry. Trying to hurt Americans purposely to make a political statement, that's not leadership, Mr. President.

VAN SUSTEREN: Do you have a problem with this being pushed up beyond September 30th? I'm hard on members of both sides not anticipating this and starting this fight a little bit earlier. Do you share my criticism? Or does it take a crisis to get people to act?

PERRY: Absolutely. There is plenty of blame to go around on both sides of this. I think it's one of the reasons -- when I talked about a part-time Congress back in the 2011, 2012 time period, some people may have thought it was a joke. It wasn't. You look at the states that have part time legislatures, they come in, they get their work done, and they go back and live under the laws they pass. I think it's time for us to seriously start having that conversation in Washington, D.C.

VAN SUSTEREN: Well, governor, always nice to see you. We are moving to an earlier --

PERRY: Anita sends her best.

VAN SUSTEREN: Thank you. And we are moving to an earlier time slot, and I hope you will join us when we move to 7:00 p.m. beginning Monday. Hope you will join us, sir.

PERRY: Count on it. So long.

VAN SUSTEREN: Thank you, sir. Enjoy California. Thank you.