Colin Powell reflects on endorsing Obama in 2008

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This is a rush transcript from "Hannity," May 22, 2012. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: He is the personification of the American dream. Colin Powell, who join the army as a young man and went on to serve in four presidential administrations, will join me right here tonight in studio.

Now, Colin Powell's impressive resume includes being the 65th secretary of state under President George W. Bush, national security adviser under President Reagan, rising to the rank of four-star general. He was the chairman of the Joint Chiefs of Staff, overseeing the first Gulf War.

And in his brand new book, "It Worked for Me: In Life and Leadership," which hit stores today, Secretary Powell shares the experiences that he encountered throughout his life that shaped his incredible, remarkable career.

And it's good to see you again, Secretary Powell. How are you?

COLIN POWELL, FORMER SECRETARY OF STATE: Good to see you, Sean. It's been a long time.

HANNITY: It's been a long time.

POWELL: Yes.

HANNITY: You know, I was just, you are doing great. You look terrific.

POWELL: I am hanging in.

HANNITY: You're hanging in.

POWERLL: Just hit my 75th birthday, I'm feeling great.

HANNITY: I said this to you. You know, I know you have had a long career, but you know, you are looking really young. So, congratulations.

POWELL: Thank you.

HANNITY: All right. So, you talk about one story -- you spent a lot of time before coming on air, talking about President Reagan. I loved President Reagan.

POWELL: As did I.

HANNITY: All right. You worked for him. And you tell the story about, you came to him with a problem.

POWELL: Yes.

HANNITY: And then he is looking at the squirrel that he put some nuts out for earlier in the day.

POWELL: Yes. Well, I went in to tell him about this problem that we had. And just the two of us in the Oval Office, he's sitting in front of the fireplace, I'm off in the couch. And so, I'm telling him and he seems to pay no attention to me, so I talk louder. Still not paying attention to me. And then finally, he stops and he says, "Colin, Colin!" "Yes?" The squirrels just came and got the nuts I put out for them this morning. And so, "Yes, Mr. President." And so, I left. Went back to my office and I thought about it. And I said, "I know what he was saying to me," he was saying to me, "Colin, I really, really like you, I love you, I will sit here as long as you want me to, but it's your problem. I hire you to solve problems. You let me know when I have a problem."

And so, I learned that lesson. And when he did have a problem that only he could solve, Sean, he was like that, he was on top of it, asked the right question and made decisive judgments. And so, I learned a lot from him and I tried to apply it later in my life, to always have people that you can trust to get things done for you and let them do the things they can do and you try to stay a little bit above it. As I said to you, President Reagan was sort of a level of aggregation above the rest of us. I don't know if that's the right word.

HANNITY: Didn't you use the ground level?

POWELL: We were at ground level. And the leader, any leader should always be a little bit above the lead, not away from them, but thinking about risk and opportunity outside the immediate confines of the organization. And that's what Reagan was good at. And that's the message he communicated to not only all Americans, but all the foreigners he dealt with.

HANNITY: Yes, you know, it was interesting. Because at the time, the threat economically was not the decline of Europe or China, it was Japan.

POWELL: Japan.

HANNITY: Yes, you have a great story in the book about that.

POWELL: I end that chapter by telling the story of the whole Cabinet marching in one day to complain about the Japanese buying everything in 1988. And Reagan is sitting there, listening to them and they are saying, you know, "They bought Rockefeller Center, they bought Pebble Beach. We're to be spared nothing. And Mr. President, what are we going to do about it? Congress is mad. The people are mad." And Reagan just looks back and calmly said, "Well, I'm glad they think America's a good investment." That was it. It was -- the meeting was over.

HANNITY: Yes.

POWELL: He was over here. And of course, they didn't know if it wasn't a good investment at the time. They lost all their money and we got it all back.

HANNITY: Well, hopefully -- look, I have never been more worried than I am today about the economy, about the world situation. You know, this is -- I have known you for a long time. You were gracious enough as secretary of state, you would grant me interviews. And I spent time with you. I have watched your military career, where you grew up in New York. You didn't grow up with a silver spoon in your mouth by any stretch. And you've achieved the highest levels of power. And you work for Ronald Reagan. And what I didn't understand -- and hopefully, you can explain this -- is I look at President Reagan and where he stood on socialized medicine, on lower taxes, on limited government, government is the problem, not the answer. And then I watched as you endorsed President Obama -- I didn't understand it. And a lot of conservatives didn't understand it.

POWELL: I know that. I looked at it very carefully back in 2008. And I saw the economy going into a free fall. I saw a situation where we were in two wars that really weren't sorting themselves out as cleanly as they should.

HANNITY: Right.

POWELL: I felt that the Republican Party at that time was conveying an impression of harshness, there was a certain ugliness of some of the things that were being said about President Obama, and some of the things that you see at the campaign events. But it was the economy more than anything else that I thought he might be better able to handle than somebody who I have the highest regard for and have known for 30 years, and that's John McCain.

HANNITY: You know, I watched and I remembered -- and maybe this is just a point of disagreement we wouldn't be able to resolve. You know, when you didn't like in particular, you felt it was a character assassination to bring up, like, Bill Ayers. Let me go back and this is what you said at the time. And let me play it for and you ask you a question out of this.

(BEGIN VIDEO CLIPS)

POWELL, OCT. 19, 2008: I was troubled a couple of weeks ago when in the middle of the crisis, the campaign said, we are going on go negative. And they announced it, "We are going to negative and attack his character through Bill Ayers." And now I guess, the message this week is, "We are going to call him a socialist." Mr. Obama is now a socialist because he dares to suggest that maybe we ought to look at the tax structure that we have.

POWELL, "MEET THE PRESS"/NBC, OCT. 19, 2008: Because of his ability to inspire, because of the inclusive nature of his campaign, because he is reaching out all across America, because of who he is and his rhetorical abilities -- and we have to take that into account -- as well as he has substance, he has both style and substance. He has met the standard of being a successful president, being an exceptional president. I think he is a transformational figure. He is a new generation coming in to the world, onto the world stage, on the American stage, and for that reason, I will be voting for Senator Barack Obama.

(END VIDEO CLIPS)

HANNITY: That's when you made the endorsement. You said because of the inclusive nature of his campaign, reaching out across America. The president himself has now said the Republican plan for this country is for dirty air and dirty water. You are still a Republican, right? That Republicans want kids with autism and Down's syndrome, the elderly to fend for themselves. We have the Democratic ads, Paul Ryan look-alikes throwing granny over the cliff.

Does that sound inclusive? Seriously, because I find him one of the most divisive figures that I've witnessed in politics today.

POWELL: Well, that's a term that's being used rather freely. I don't think it's that divisive of an issue. I think we have right now, we have dueling points of view strongly held by both sides. And the president is starting to go to the mattresses, just as the Republicans are going to go to the mattresses to try to win the election.

What could have been more divisive than when President Obama was inaugurated for a number of Republicans, friends of mine and a number of commentators to say, we are going to destroy him. We are going to destroy him.

HANNITY: Who said that?

POWELL: A lot of people saying, I can get you a list, but I don't want to just take it off --

HANNITY: I was one of the harshest critics. I wasn't out to destroy him.

POWELL: I don't ever remember you saying it.

HANNITY: Well, I was critical about Bill Ayers and Reverend Wright.

POWELL: I don't know Bill Ayers from the man in the moon. Bill Ayers and Reverend Wright are just passing things through his life.

HANNITY: Twenty years in his church? Twenty years?

POWELL: Well, so?

HANNITY: Unrepentant terrorist giving speeches, starting your political career in his house, that didn't impress you at all?

POWELL: At the time it was a guy who is living in Chicago and happened to have a friend by the name of Bill Ayers. But I don't see Bill Ayers as having that kind of long-standing terrorist influence on the President. I mean, it is ancient history now. Why are we fooling with this?

HANNITY: Well, I don't think it's the issue. I think the economy and the president's record -- I couldn't see you and Reverend Wright's church for 20 years.

POWELL: I wasn't in Reverend Wright -- I didn't know anything about Reverend Wright or his church.

HANNITY: I know but that's my point.

POWELL: This thing explodes and it becomes a big -- everybody tries to make it the defining issue of the 2008 campaign. And guess what, the American people heard it, they heard all the attacks, they heard all the things that were said about the Reverend Wright issue, then-Senator Obama gave a speech on it and the American people took it in stride and they elected him president.

HANNITY: Yes, they didn't listen to me, that's the power and influence I have.

(CROSSTALK)

POWELL: Well, that's what makes this country great.

HANNITY: Yes.

POWELL: You know, Sean, we have a wonderful country. There has always been divisiveness within our political system because the Founding Fathers designed it that way.

HANNITY: We don't have duels anymore, not that I've seen lately.

POWELL: Not lately. It may come back, we may need to bring it back.

HANNITY: God forbid.

POWELL: But the fact is that, as I say to all of my audiences, is look, this isn't Tiddledy Winks. Politics is tough stuff. You should see what our Founding Fathers used to say to each other and in the early part of our nation. But what they were able to do, especially in Philadelphia in 1787, four months, they argued about what a House should be, what a Senate should be, the power of the president, the Congress, the Supreme Court. And they had to deal with slavery. And they compromised on slavery because they couldn't solve it.

HANNITY: Right.

POWELL: And they said, we are here to create a nation under a Constitution and they did. And so, I saw that kind.

HANNITY: That's amazing.

POWELL: It's amazing. But they did it. It took us 200 years to resolve slavery. But they knew what they were there for, to create a nation. Sometimes as I watch politics today, it seems like it's all about winning, not compromising. Let's not even think about it. We just had a gentleman who beat Mr. Lugar in Indiana and his first statement is, I am not going to compromise anything. How's is the country going to work if nobody would attempt to come to Washington and compromise?

HANNITY: You say something that is so amazing about our founders and framers that are often beaten up by people even today.

POWELL: Yes.

HANNITY: But what I always thought was amazing about them is that they put in place a system to right wrongs, correct injustices and history has, I think, proven them right. I think you are agreeing with me.

POWELL: I fully agree with you. It's a wonderful system. And it takes time sometimes. You have to ultimately to get a consensus from the people. The only way you get a consensus to move forward is for there to be compromise, so you can build a consensus.

HANNITY: Yes.

POWELL: We are not doing enough of that now. We're not doing enough -- OK, look, let's have a drink, let's play some poker together.

HANNITY: Tip O'Neill and Reagan.

POWELL: You got it!

HANNITY: What happened to that, Sean?

POWELL: It is not there anymore.

HANNITY: You know, it's funny because I get accused of this. The president is saying, do you want dirty air and water? I don't want dirty air and water. I have clean water for my kids.

(COMMERCIAL BREAK)

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HANNITY: And we continue now with former Secretary of State Colin Powell, his new book, "It Worked for Me: In Life and Leadership" is now in bookstores, Amazon.com.

All right. I know you were asked this morning with Matt Lauer whether or not you have decided about who are you going to vote for in this upcoming election. You know your endorsement is powerful. I mean, I think it had a big impact in 2008. You say you are still a Republican. Here's the question -- and I am going to go back to somebody that we both admire and respect a lot, and that's Ronald Reagan. I am going to add something -- are we better off than we were four years ago? And are we better off than we were $5 trillion in debt ago?

POWELL: Well, it depends who you ask. If you ask the financial community, they would say that the symptoms have stabilized and we are not going off a cliff the way we were five years ago. The stock markets are over 12,000 and it's been up to 13,000. So, some people would say that's good. If you ask auto workers, they would say yes, we're better off now than we were four years ago.

If you ask others, they would say -- business leaders for example, many of them and I live out in the business world -- they would say, we are not that happy with where we are, there is too much regulation, government interference in what we're trying to do, and we would like to see that end. If you talk to the people who are the lower end of the income ladder, they are waiting for the unemployment rate to go down and the economy to -- that's the most important thing facing this country. I'll give you the most important things facing this country right now.

One, we have to get the economy moving, and that's not just a problem for government. That's a problem for business, for investors, all of us who create wealth in this country. Economy's got to get moving, we've got to get the unemployment rate down. That may be the defining issue of the campaign.

HANNITY: Right.

POWELL: We have to get to the education of our kids.

HANNITY: Agree.

POWELL: I could spend an hour on that but I won't. We've got to clean up our environment. We can't keep going like this. And I think all people understand that. We just haven't found the right way to go about it without essentially, you know, putting too much of a burden on our businesses and taxpayers.

HANNITY: Yes.

POWELL: And I think we have to find a way to bring the fiscal situation under control. I think that my good friend Simpson and Bowles came up with a plan, I wish both sides could have accepted that.

HANNITY: Why did the president reject that?

POWELL: I don't know why he did, I haven't discussed it with him. But for reasons that I don't know, it was not adopted. But keep in mind, Congress wouldn't create such a body, the president had to create it and then he could accept it or dismiss it. But we have to realize, in my judgment, and I am no economist or I'm not even a politician, believe it or not.

HANNITY: Thank God. You did -- spoke in your book about thinking two months about running for president.

POWELL: Yes. Two months and that went away.

HANNITY: Real quick.

POWELL: What we have to do is, you know, we can't just say, we are never going to raise taxes. Reagan used to say that, he raised them 12 times. We're never going to raise taxes.

HANNITY: Yes. He had a major tax decline, 70 to 28 percent.

POWELL: Good. You have to -- you have to be agile enough to be able -- you just don't say never, never, never, never.

HANNITY: I understand what you are saying.

POWELL: If we are not going to do that, then, we are going to cut the spending. But line up everybody and ask them, what are you really going to cut? Let's get serious. Now, what are you going to cut? And you don't get the numbers you need. We cannot keep going as a nation spending $3 trillion a year and only taking in $2.

HANNITY: We are borrowing 40 cents of every dollar. And I hear everything that you are saying and I agree with everything. You know, here's my frustration with President Obama. And this is where, again, I come back to, you know, understanding where you are because you are such a powerful voice. And I am not trying to persuade you because I think you are a man of your own mind and you are not going to listen to a talk show host. But when you endorsed President Obama, you were complaining about a $500 billion a year deficit. He has given us $5 trillion in new Obama debt. He said he would cut the deficit in half, he has given us the largest deficit in history. He said he would eliminate lobbyists, it's a revolving door as we learned this week. He said, he would eliminate earmarks, he hasn't accomplished that.

As a military guy, I think when somebody goes out and apologizes, repeatedly as he has done for this country and you have served this country with such distinction that that would bother you. And that's where, I kind of, I don't understand Colin Powell because you supported Reagan, how do you support somebody who seems the opposite?

POWELL: I have supported Reagan, I have supported Jack Kennedy, I've supported Lyndon Johnson, I've supported.

HANNITY: Kennedy was like Reagan.

POWELL: They are Democrats, though.

HANNITY: Yes.

POWELL: First of all, he is not going around the world apologizing for everything. I take exception with that. I don't think we have enough time to get into the details of that.

HANNITY: Yes.

POWELL: All sides of this government, the executive branch and the legislative branch. You know, the President doesn't pass appropriations bills. The bills are signed by the House and the Senate and then come to him for signature. And so, if the Congress doesn't want to see those kinds of expenditures taking place and the numbers going up, don't pass the bills.

HANNITY: Senate, Democrats haven't passed a bill in over a thousand days.

POWELL: Right. More than a thousand days now.

HANNITY: Eleven hundred, 12 days.

POWELL: Well then, why does it keep going up? I mean, the bills that they haven't passed aren't those that are going to cut things.

HANNITY: None.

POWELL: And here's the other challenge that both the Republicans and the Democrats are going to have. The people like what they are getting from their government. And when you say, well, let's do this to Social Security. Yes, let's do that. You don't mean me, do you? Well, we had better realize that we have to go after entitlement spending. I think we can do a heck of a job in cutting the size of government here in Washington. It has grown like top seed in the 30 years that I've been in public service at the senior level. And we could do a massive job there. You can't put the Defense Department off the table or anything off the table.

And we need some serious people who will sit and say, look, everything's on the table. And if you convince me that revenue is a way to fix this, then let's talk about that. But I have to convince you that maybe we should cut this department or that department and lower this.

Look at all the government's raised in the last 20 years. The director of National Intelligence, TSA, Homeland Security Department. These are all pre-Obama. So, there is a lot of carry-over from that. But why are they there? Because we need them. The country needed them.

HANNITY: Good to see you, Mr. Secretary.

POWELL: Good to see you, Sean.

HANNITY: Always an honor to have you.

POWELL: My pleasure.

HANNITY: Thank you very much.

POWELL: Thank you.

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