This is a RUSH transcript from "The O'Reilly Factor," August 8, 2011. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Back of the Book" segment tonight, let's go out to Council Bluffs, Iowa, where Congresswoman Michele Bachmann is campaigning to be president. So Congresswoman, I want to get very specific tonight. In the face of all of this disaster, if you were president, what would be the first thing you would do economically? The first thing.

REP. MICHELE BACHMANN, R-MINN., PRESIDENTIAL CANDIDATE: Well, the No. 1 thing that needs to be done is, I think, the Treasury secretary has to go. You have to have some firings. You mentioned that in your "Talking Points Memo." If your economic team isn't working, you've got to get someone in who knows what to do. That needs to be done.

I think, secondly, if I were president today, I would call all the members of Congress back into Washington, D.C., and I'd say this: "Look, we are going to get this AAA credit rating back, and this is what we're going to do. First, we're going to make -- we're going to tell the markets that there will be no default on the debt. We will make sure all the interest payments are made. Second, we'll tell our military in no uncertain terms they will get their checks. And No. 3, we would make sure that all senior citizens would know they aren't going to be scared any more. Their current benefits, both on Medicare and Social Security, will be paid."

However, from there, with all the members of Congress, I would let them know the time for entitlement reform is now, not in the future. We have to have entitlement reform now, because...

O'REILLY: What's your idea about that? What's your idea about Medicare? You know, costs are exploding. What's your idea to get the costs under control so the nation can afford to pay the bills of people who have paid into Medicare for their whole working lives? I mean, it's not really an entitlement, Medicare. People always say that, and they're right. You know, we pay into this system, but then the government does what it usually does: takes money here and there, and then they don't have enough money to cover and all of that. So how do you get the Medicare costs under control? What do you do?

BACHMANN: Right. Well, it needs to be tied more to the market, right? Because it isn't now. Right now it's on a fee for service program, and President Obama himself has said this program isn't working and that has to change. There have been good suggestions that have come out there.

O'REILLY: Like what? Give me one.

BACHMANN: For instance, people who -- people who do not have sufficient income could have their health insurance subsidized. And so for those people who do have sufficient income, then they would purchase their own health insurance, so it would be means-tested as to who needs to have that subsidy or not.

O'REILLY: OK. So the wealthy people, the affluent people who declare a certain amount of income every year, if they're over a certain level, they're not going to get as much Medicare help. So people are going to be teed off about that. But OK. It's a legitimate, you know. Would you raise the age for Medicare? Would you raise the age for Social Security?

BACHMANN: Again, No. 1, everyone has to be crystal clear: No one who is a current recipient of benefits would be impacted.

O'REILLY: No, I know. You've got to grandfather it in. Absolutely.

BACHMANN: It would be subsequent people. That has to be crystal clear.

O'REILLY: Let's say under 40, you raise the rate, raise the age to 67, 68, something like that?

BACHMANN: I think you have to look at longevities. Clearly I think we need to look at that both on the Social Security side and on the Medicare side and on Medicaid. More important than all of this, Bill, is repealing Obamacare.

O'REILLY: I got that, I got that. But you're dodging the question about raising the age.

BACHMANN: No. Hear -- hear me on this. Because a couple of months ago, I was in the White House with President Obama. We asked him three times: "What's your plan to make Medicare solvent?" He mumbled around, didn't give an answer.

O'REILLY: He doesn't have a plan, Congressman (sic).

BACHMANN: You know what he finally said? Listen.

O'REILLY: If he had a plan, he would have put it out there.

BACHMANN: Let me tell you what the president said. Let me tell you what the president said.

O'REILLY: All right.

BACHMANN: He said Obamacare. And so what senior citizens don't realize is that President Obama's plan for Medicare is they will all go into Obamacare. There won't be a Medicare going forward under President Obama.