KING: Congressman Paul, thank you for your time.

Let's start with the state of the race.

Governor Romney wins narrowly in Iowa. He's well ahead here in New Hampshire. And we have a poll out just tonight that now shows him with a double digit lead in South Carolina.

If he goes 3-0 out of the gate, he's almost impossible to stop, no?

PAUL: It's going to be difficult, but not impossible. I mean it's still only two primaries after the two.

But history shows that if you do that you're in a pretty strong position.

But we haven't had the first primary yet. We've had a caucus. So we have to wait and see what happens on Tuesday so that...

KING: So you have two debates this weekend.

PAUL: Right.

KING: Do you view them as maybe the last opportunity to convince Republicans...

PAUL: In what?

KING: -- Romney is not your guy?

Why -- why would you...

PAUL: In New Ham... KING: -- why would...

PAUL: -- in New Hampshire...

KING: In New Hampshire and maybe beyond. People will be watching this.

Why would you say the wrong guy, Mitt Romney?

PAUL: Well, I don't think he's very Republican when you talk about being a conservative. You know, we put hats on saying he's a flip- flopper and people have called him that all along.

He's been on both sides of most of the issues. And right now, people are looking for somebody that will stick to their guns and -- and not capitulate and go along to get along.

So I don't think he stands out as somebody that will stand firm on conservative principles.

KING: Senator Santorum comes out of Iowa thinking he's the conservative alternative to Romney.

Is he?

PAUL: It depends on how you defend conservative. You know, I -- I'm a conservative. You know, I want to obey the constitution. That's the basis of conservatism. But that doesn't mean I'm a big government guy that wants to run people's personal lives.

I don't understand why conservatives think the more money you spend overseas, the more conservative you are. That doesn't make any sense. And the American people are waking up to this, because it's -- most of the time, it's money down the drain. It contributes to our debt. It hurts our economy.

So I'm a conservative across the board. I believe in small government. Republicans claim they do, but I want smaller government all the way across the board and protect personal liberties as well as getting the government out of running the economy and quit running up these debts.

That's why I proposed a trillion dollar cut in one year.

KING: Speaker Gingrich, in our South Carolina poll, has tumbled 25 points in a month. Your campaign seems to view him as a threat down there. A new mailing from the Paul campaign says this: "Newt Gingrich has a long record of liberal appeasement, flip-flopping on key issues and lobbying for insider millions. I have rarely seen a candidate who represents so much of what is wrong with Washington and what is wrong with our political system.

Is it personal between you and Newt?

You served together for a while. PAUL: You know, probably not, because I have never had a cross word with him. We've been on opposite sides of the political arguments, you know, forever. I mean he worked pretty hard against me in campaigns.

So this is nothing new. But I don't ever remember having a cross word with him.

As a matter of fact, there -- there were times when he knew exactly where I was coming from. He never bothered me when I was in Congress because he didn't think it was worth his time to twist my arm.

So, in a way, I thought that was respect.

But, you know, in -- in politics, if people think he's a real -- real conservative and hasn't engaged in flip-flopping and spending money, I think we should talk to -- think about it.

KING: As you know, you've been a target at these debates, because you're doing well.

PAUL: Right.

KING: Over 20 percent in Iowa. You're polling well here in New Hampshire. And those other guys who want to stay in the race, they need those votes. So they have come after you. And as you mentioned at the rally out here, they call you dangerous, they call you naive, especially when it comes to Iran and your views on the nuclear program. You say it's none of our business.

I want to ask you specifically about the recent events. Iran says it's going to have another round of naval exercises in the Strait of Hormuz next month. It has said it would respond, attack, we believe, if the United States sends an aircraft carrier through those oil shipping lanes to keep them open.

PAUL: Right.

KING: What would a President Paul do right now when Iran saber rattles...

PAUL: Well, I...

KING: -- like that?

PAUL: -- well, I think -- I think they are flexing their muscles, because I don't think they have anything else left. They can't defend themselves very well against America's power. So they're -- they're just hoping that we'll back off from bombing them and destroying their country and starting another war.

So -- but -- but it's not in their interests to start the war. They're trying to avert the war.

So they -- and they close the Straits or -- or attack an American vessel? No way that's -- that's going to happen. But they are verbalizing this because, as a matter of fact, even these sanctions aren't -- aren't wholeheartedly agreed to by the president. And Eastern Europe are quite worried about it. It's going to disrupt oil. Oil jumped up, you know, $4 the other day because of this -- this type of a problem.

So these sanctions are not an answer. I think that's an introduction to a real problem.

So I think they're -- we all do a lot of this talking, but I think they know what's in their best interests and for them to attack one of our vessels or close the Straits under these circumstances, I think it's utterly remote.