PHILLIPS: Well, you can still feel the shock waves here in Washington. It was our top story today, longtime Republican Senator Arlen Specter turning his back on his Republican Party, a party he had been part of for decades, and going Democrat. Reaction within the Republican Party, our Dana Bash said "shell shocked" was the feeling.

I can imagine what RNC Chair Michael Steele is feeling. He's joining me by phone in Irving, Texas.

Chairman, let me ask you, are you surprised? Are you shocked?

MICHAEL STEELE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE (via telephone): No, I'm not, to be honest with you. No, I'm not. I had a feeling. I mean, he had very -- Senator Specter had very few options at this point. He had stepped on the toes of a lot of Republicans with his vote to on the stimulus bill, which was a core principle for us in terms of our views on economics.

And you know, admittedly, a lot of Republicans weren't happy about the end of the Bush administration in terms of putting in motion this bailout process. But to have the senator confirm that, really, you know, made it tough. And so, I think he saw that tough primary challenges coming ahead for him. I think he also saw a tough re- election in a general election.

And to me, this was not a question of, oh, gee, all of a sudden I found principles as a Democrat. This is about political survival, and this is about, you know, taking advantage of an opportunity and, you know, moving a little bit closer to where he's ideologically planted. That's perfectly fine. But, you know, from our perspective, I think this is less about, you know, some philosophical issue as it is more of a political survivor issue.

PHILLIPS: Well, speaking of political survival, I mean, how is this going to impact the Republican Party?

STEELE: Well, It has a big impact. There's no doubt about it. I mean, certainly in the Senate, this puts the Democrats one step closer to 60 votes, which is a huge problem, not for the party per se but for the country. To give one party control absolutely without the appropriate checks and balance in the Senate is problematic.

So, I think the senator contributing to that speaks volumes for me. You know, and the fact that he would say that, you know, President Obama's spending package, you know, the $780 billion in the stimulus and the budget made him realize he's a Democrat. Well, if spending the hard-earned dollars of the American people and redistributing their wealth and moving towards a collectivist socialist approach to government, if that helps you realize you're a Democrat, then, you know, good riddance.

PHILLIPS: Chairman, if you don't mind, Gloria Borger has been her talking with me throughout the afternoon about this story. I'd love to bring her in on this interview.

STEELE: Sure.

PHILLIPS: Gloria, I know you've got questions.

STEELE: Hey, Gloria.

BORGER: How are you?

STEELE: I'm good.

BORGER: Mr. Chairman, I guess the question the question is, could you have stopped Arlen Specter from leaving the party if you had said to him, for example, we're not going have a Republican primary challenger to you. You're well known in the state. You might have a shot of getting elected in a state that's become more Democratic. Why didn't you clear the field for him to keep him from switching parties if you say he's doing it out of political survival?

STEELE: Well, I think that, you know, this -- the party doesn't operate that way. And as I said when this issue first arose -- and I was a former state chairman -- the national party doesn't stick its nose in and help direct outcomes. The state party ultimately working with the candidate, in this case, Senator Specter, would work through whatever challenges they may face in the primary. The state chairman had made it very clear that they were going to let that process unfold.

And Senator Specter, if he's challenged, would respond accordingly and have to address and account, you know, to the Republican base in the state for his votes. Look, you can tweak my nose and you can step on my toes and you can pull my hair. At some point, enough is going to be enough. And I think for a lot of Republicans, particularly the core base of the party in Pennsylvania, they had reached that threshold. So, it would ultimately be for them to decide.

So, the idea of clearing the decks -- and I know the Senatorial committee made it very clear that they were going to support Arlen Specter and endorse him. Senator Cornyn went out on the line for this man. And for the senator to effectively flip the bird back to Senator Cornyn and the Republican Senate leadership, the team that stood by him, who went to the bat for him in 2004 to save his hide, to me is not only disrespectful. It's just downright rude. I'm sure his mama didn't raise him this way. And it's a shame that he's behaving this way today.

BORGER: Did he give you a heads up on this?

STEELE: No, not at all, which is another form of disrespect that I don't countenance. I mean, you know, at least give me a call or give the party leadership a call and let us know, this is what I'm thinking, this is where I'm going, so that, you know, it can be repaired.

Now, you know, I'm not one to be caught flat-footed about these things. You know, you get on your toes, and you respond as quickly as you can. But, again, I think it shows a lack of respect for a party that he has pushed to the edge in terms of his votes and in terms of the arguments he's made in support of this administration. And I think that right now, he is where he belongs, and if the Democrats don't beat him in the primary, we'll take care of him from the general.

PHILLIPS: And, Chairman, as we're talking to you, I just want to mention to our viewers that we're watching live coverage now of Arlen Specter. He's actually talking about the swine flu. It's an emergency hearing that Tom Harkin called for. That's what he's talking about right now.

Obviously, if this somehow comes up, which I doubt, within this hearing, we will take it live because he's -- we're told that he's going to hold a news conference up at 2:15 Eastern time. But let me ask you, Chairman, while I have you, are you concerned that there could be more Arlen Specters? That he's not the first one that's going to jump ship right now in a really tough time for the Republican Party and, quite frankly, a time where President Barack Obama and the Democratic administration is really on a roll with constituents.

STEELE: Well, I'm sure the grass looks greener to a lot of folks like Arlen Specter out there, but my responsibility and my core belief still remains that the party -- the Republican Party has something to offer the American people. Part of the rebuilding that I'm helping us grow through now with our state parties, which is why I'm here in Texas on a regional conversation with state parties here, is to talk about how we communicate more effectively and take this message of ownership, empowerment and opportunity, not wealth redistribution and the growth of government, directly to the American people to give them that choice. I doubt that there are more Arlen Specters out there who are willing to, you know, in elected office are willing to jump parties. For what? They're jumping parties for what? You've got to tell me, honestly, that part of your core belief system, if you move from Republican to Democrat, is that you're now buying into this idea that the government knows best. And I just don't see that in the rank-and- file elected officials of our party.

BORGER: But Mr. Chairman, just bottom line, given the fact of the change in registrations in Pennsylvania, doesn't this make it more likely -- Arlen Specter is personally popular in Pennsylvania. He runs as a Democrat. Doesn't this make it a lot more likely that you will lose that Senate seat?

STEELE: Well, not necessarily. You're making a lot of assumptions there. Number one is that he's going to survive a Democrat primary. Now, let me get this straight. Arlen Specter, the former Republican, decides today, oh, magically, now I'm a Democrat. And every Democrat in the state is going to go, oh, my gosh, thank you, hallelujah, our savior has come?

I don't think so. And I think the reality of it is, he's now got to go to that Democrat base, just as he would have to go in a Republican base, and explain himself and to make his case and to fend off any challenges in a Democrat primary. I seriously doubt that he's going to have a scot-free ride to the nomination on the Democratic side, no matter what kind of deal the trial lawyers and the Democratic Party have made.

Governor Rendell may not now run for the U.S. Senate, but I know of a number of congressman who will look at that seat now. This is an open primary seat for the Democrats. I love it. And we're going to have a strong Republican candidate on our side, and I love that even more. And if Senator Specter survives into the fall, get ready to go to the mat, baby, because we're coming after you and we're taking you out.

PHILLIPS: All right, you know, you're always full of those interesting ways of words. Michael Steele, RNC chair, I'm going to take advantage of this if you don't mind.

STEELE: Sure.

PHILLIPS: One more question...

STEELE: Sure.

PHILLIPS: Because Arlen Specter just left the emergency meeting that Tom Harkin called for on this swine flu. And I want to ask you this: You know, here we are in this situation. I'm going to switch gears just for a minute, talking about the swine flu. You know, it was Republicans that voted against the stimulus money for a flu pandemic. We're talking $870 million for pandemic flu preparedness. You guys voted it out of the package. Are you regretting that?

STEELE: Oh, please. Stop it with that. Did we know this at the time of the vote? Now, again, as yourself, when these bills, when this package of spending was presented to the Congress and the American people, what was the presentation that was given by this administration? This was to create jobs. This was to restore our economy. It had nothing to do with pandemic flus. It had nothing to do with how pigs, why pigs stink. It had nothing to do with any of the stuff that we spent money on.

So now, don't come back and make this link, you know, six months after the fact, that, oh, see, you guys voted against this, and this is what the money was going to be spent for. No one knew what that was.

PHILLIPS: Well, Republicans are saying, hey, look at the Democrats. They have all these vacant positions right now in HHS, DHS, CDC...

STEELE: Yes. That's a priority.

PHILLIPS: ... there's no surgeon general. It's their fault that we don't have money and we don't know how to react to this flu pandemic. So, I think it's Democrats and Republicans pointing the finger at each other, sir.

STEELE: And that's what the American people don't want. We don't want to get into a situation where we're pointing fingers back and forth at each other on, well, you don't have people in place or, well, you voted against the money. What we want to say is, what is the administration going to do about it now?

And again, you cannot, in my view, make this link, you know, after the fact, that, oh, see, gee, good thing we voted for this money. But that's not why -- it has nothing to do with creating a job six months ago when this whole crisis situation was really kicking off. This bill was supposed to be towards giving the person, the small business owner who's about to go out of business, a fighting chance to survive. It had nothing to do with some of the other things that we're now looking at.

So, I'm not going to sit here and accept that connection. Is the money there? Yes, the money would have been there whether the Congress voted for it six months ago or not, because we have an emergency situation, and as in all cases, Congress will find a way to fund the needs of the people at the time we're in a crisis situation.

PHILLIPS: Well, I think that's the bottom line, Chairman, is that, you know, why is it that voters always have to wait for when it becomes a crisis? I think voters just want to know whether it's a pandemic, whether it's flooding in New Orleans, whether...

STEELE: Absolutely. But it's the priorities. It's priorities. And at the time, the priority was stabilizing the economy and creating jobs. Now the priority is dealing with what is potentially a very serious health issue. And the government, elected officials have a responsibility to step up and help the state work through this thing. So, it's a matter of priorities. And tomorrow, next week, three weeks from now, three months from now, the priority may be something different because we don't know what tomorrow holds. We can only deal with the here and now. And that's what we were dealing with at the time these spending bills were put before the Congress. And Republicans made a legitimate argument that the money that was being allocated, the trillions of dollars that were being spent, had very little to do with job creation and wealth preservation and everything to do with a checklist of spending that the Democrats wanted to work their way through.

PHILLIPS: RNC Chairman Michael Steele, appreciate your time today.

STEELE: You got it.