Rick Sanchez talks to Sen. Kay Bailey Hutchison about what's happened to the Republican party and asks if she's worried after Arlen Specter's defection.

Hutchison: Of course we're worried. I think we would have to be ostriches with our heads in the sand if we weren't worried. We need to look at ourselves thoroughly inside out and anyone who is whistling past the graveyard saying "Oh, we need to do exactly what we're doing. We're right by god" is wrong.

I hate to break it to you Senator, but you're surrounded by a whole lot of ostriches right now. I guess we'll find out shortly if she ends up next on Boss Limbaugh's list for daring to say there might be anything wrong with the way the GOP is doing business these days.

Full transcript below the fold.

SANCHEZ: All right. Got a lot of comments that have been coming in from you. And we are going to be checking them from time to time. We promise.

But there is absolutely no denying that the Republican Party was caught completely off-guard by the defection of Arlen Specter. Specter then went on to pour salt in the wound by suggesting that the party was both, A, eating its own and, B, becoming way too far right- wing.

When Specter said that, a lot of people were thinking. But is it fair? Is it true and how worried should Republicans be about their status and their relevancy as a party?

Here are some of the facts. One poll just recently showed that only 21 percent of Americans now call themselves or identify themselves as Republicans. Most of the growth for the party is regionally centered in the South. Hispanics and blacks are voting against Republicans in bigger numbers than before.

And now one of the party's few household names has defected.

Joining us from Capitol Hill is Texas Senator Kay Bailey Hutchison.

Senator, always good to see you.

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Thank you, Rick.

SANCHEZ: What's happening to the party of Abraham Lincoln and Ronald Reagan? Are you worried, and what are your plans?

HUTCHISON: Of course we're worried.

I think we would have to be ostriches with our heads in sand if we weren't worried.

(LAUGHTER)

HUTCHISON: We need to look at ourselves thoroughly inside out. And anyone who is whistling past the graveyard, saying, oh, we need to do exactly what we're doing, we're right, by God, is wrong.

You cannot do that. You have to assess either your message is wrong or the message that -- the way you're putting it is wrong. And, of course, we stand for principles. We stand for very important, unifying principles.

SANCHEZ: So, you need to be more inclusive.

Do you feel like -- I mean, I know inclusive is one of those words -- you know, I'm getting a lot of press for being hard on Senator DeMint, which I didn't mean to, when he was saying we want to become the big tent -- or we are the big tent of freedom.

And that's one of those generalistic words and people go, what? But inclusiveness is something you have kind of got to shoot for if you can come up with some kind of strategy to get those people who don't normally vote for you. What would that strategy be? HUTCHISON: Well, I think we have to determine, what are the unifying principles to be a Republican? And then what are areas where we are going to disagree because of regionalism or representing our own states or perhaps a difference in philosophy on an issue that isn't a core principle, but is something that we could agree that maybe if someone differs on that issue, they are still welcome into the Republican Party.

SANCHEZ: So, do you agree -- when Arlen Specter says the problem for me running as a Republican -- and, look, let's be honest about this. Arlen Specter looked like he was going to get his fanny handed to him. And that's the underlying real reason he left. We all get that.

But he did say some things that were interesting about purification. He said that -- and I can't wait to get your take on this -- that some people are trying to purify the party so much that the litmus test is so difficult that when the person comes out the other end, there's no way he can be accepted by the party.

Is that too stringent, do you think, Senator?

HUTCHISON: I think that it is too stringent, if we are saying that you have to agree with a Republican platform or a Republican other senator on every single issue. We can differ on issues, like, you know, a social issue, an education issue, a better-approach issue, health care access, cancer. Many of these issues, we can differ -- and maybe in a regional way, there is a different take on it -- but not on core principles.

And I think we have to establish, what are the core principles that unify us? And I think it's pretty clear. It is the economic issues. It's looking at the long term, rather than just the expediency of the moment. It is free enterprise. It is small business.

We are a party that champions small business, and we want the regulatory environment to accommodate small business to grow and create new jobs and have a healthy, thriving economy. That should be the center of our party.

Then, if there are other issues where we disagree, we ought to be able to accept people in the party and welcome them. And that's what Ronald Reagan did.

SANCHEZ: Even if -- even if there's a disagreement. Those are strong and important words that you just shared with many of our viewers.

And I guess, you know, the best news out of all this, if you are a person who is a Republican and wants to see this party come back, which to a certain extent I think all Americans should, whether Republicans or not, is that these things are generally cyclical, that you could look back in history and see times where both sides were way up and they thought the other party was doomed. And somehow they have come back, both sides. So, you know, it's just an interesting caveat to share with you as we close out the conversation.

(CROSSTALK)

HUTCHISON: It's when the parties go too far. That's when it starts turning back.

SANCHEZ: Because Americans tend to live in the middle. Even if -- even if there are news stations and radio shows who make it look like that 10 percent on the fringe is actually the middle, it's not true. And you and I know that.

Senator Kay Bailey Hutchison, thanks so much for taking time to take us through this.

HUTCHISON: Thank you, Rick.

SANCHEZ: Good conversation.

HUTCHISON: Thank you.