According to a NY1 transcript, Grimm and Scotto said the following during the confrontation:
"So Congressman Michael Grimm does not want to talk about some of the allegations concerning his campaign finances," Scotto said before tossing back to the station. Then as the shot ended, Grimm reapproached Scotto and began speaking to him directly.
"What?" Scotto responded. "I just wanted to ask you..."
Grimm: "Let me be clear to you, you ever do that to me again I'll throw you off this f-----g balcony."
Scotto: "Why? I just wanted to ask you..."
[[cross talk]]
Grimm: "If you ever do that to me again..."
Scotto: "Why? Why? It's a valid question."
[[cross talk]]
Grimm: "No, no, you're not man enough, you're not man enough. I'll break you in half. Like a boy."
Update: Grimm made the following statement about the incident:
NEW: Statement from @repmichaelgrimm:
Update (Jan. 29): Grimm apologized to the reporter Wednesday morning.
buzzfeed.com
"The bottom line is it shouldn’t have happened," Grimm told reporters.