This is a rush transcript from "Hannity," October 9, 2012. This copy may not be in its final form and may be updated.
SEAN HANNITY, HOST OF "HANNITY": But first, there is another very clear indicator telling us exactly where this election stands. Now, that being the latest campaign ads. Now, they tell us what each of the candidates are focusing on. At this stage of the game, the contrast is staggering. Now, on the one side, you have you a desperate incumbent who wants to distract, you the voters and make this election about anything and everything except his failed record. Like for example, Big Bird, Big Bird and then Big Bird.
(BEGIN VIDEO CLIP)
ANNOUNCER: Bernie Madoff, Ken Lay, Dennis Kozlowski, criminals, gluttons of greed, and the evil genius who towered over them? One man has the guts to speak his name.
ROMNEY: Big Bird.
BIG BIRD: It's me Big Bird.
ANNOUNCER: Big, yellow, a menace to our economy, Mitt Romney knows it's not Wall Street, you have to worry about, it's Sesame Street.
ROMNEY: I'm going to stop the subsidies to PBS.
ANNOUNCER: Mitt Romney taking on our enemies, no matter where they nest.
(END VIDEO CLIP)
HANNITY: All right. So, that's the hard-hitting message coming from team Obama. Maybe we will hear from Seamus the dog coming up later in the campaign. Now, as the RNC points out, the president has relentlessly talked about Big Bird and Elmo now in the campaign trail for days, mentioning those characters at least 13 times. However, he's not uttered single word about the Libyan terror attack or how he plans to fix the economy. Now, Big Bird must be this week's version of the Republicans dirty air, dirty water and throwing granny over the cliff. Now, meanwhile, conservatives are focused on the real issues of the day, issues like putting Americans back to work. Bringing justice to those terrorists that killed Ambassador Stevens and three other Americans last month. And that is the task that the White House has only made more difficult because of its campaign of disinformation, propaganda and distortion.
(BEGIN VIDEO CLIP)
ANNOUNCER: September 11, 2012, an American ambassador was brutally murdered, three other Americans killed. An organized assault with automatic weapons and rocket-propelled grenades. A security request submitted four months earlier, denied. Even after two bombings preceding the anniversary of 9/11. And fears of being killed, expressed by Ambassador Stevens himself. Yet President Obama's officials insisted they had no actionable intelligence requiring increased security. Then, the attack. And Obama and his administration wouldn't call it terrorism for 14 days. But the evidence is piling up on Barack Obama. Within hours of the attacks, Obama officials received numerous intelligence reports indicating the attacks were organized and Al Qaeda was involved. Communications intercepted between Al Qaeda and Libyan militants, bragging about the attack. Every sign pointed to terrorism. But for two long weeks, Obama and his team blamed a video. Why? For political reasons. It was in Obama's interest to not portray the attack as terrorism on the anniversary of 9/11. The intelligence was there. Clear signs of terrorism, but a campaign politics came first. The evidence is mounting as more questions arise, what did this president know? And when did he know it?
(END VIDEO CLIP)
HANNITY: Pretty serious. What's more important, Big Bird or let's see, security requests that were denied, lies that this was a spontaneous attack on our consulate that murdered four people, protecting Al Qaeda in the process because they were the ones responsible. And then, of course, telling you, the American people, this was spontaneous. This was due to an internet movie trailer that was released in July, had nothing to do with America or the anniversary of 9/11. And joining me now with the reaction to the very latest ads as well as rumors of a major staff shake-up in Chicago, Fox News political analyst Juan Williams and the author of the "The Great Destroyer," David Limbaugh. So, let me, you know, I want to play the president here. This is back in the last campaign, Juan. I want -- think about this while you're listening to this. Big Bird, Big Bird, Elmo, Big Bird, Sesame Street, the dog on top of the car. You're laughing. Bain Capital, war on women, contraception. Anything but the important stuff. But Obama predicts this happens to campaigns that are in trouble. This is what he said.
(BEGIN VIDEO CLIP)
PRESIDENT OBAMA: Because if you don't have any fresh ideas, then you use stale tactics to scare voters.
(CHEERS AND APPLAUSE)
If you don't have a record to run on, then you paint your opponent as someone people should run from. You make a big election about small things.
(END VIDEO CLIP)
HANNITY: That's Obama -- no fresh ideas, scare tactics and he's running on small things because he's failed and doesn't want to talk about his record. It fits him perfectly.
JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST: Well, Sean, first of all, let me say, I happened to agree with Governor Romney about PBS, NPR, I don't think the taxpayers, the government should subsidize that. I think Big Bird is sufficiently successful and in fact, Masterpiece Theater, Jim Lehrer that you talked the other night, those folks are successful. The marketplace will support them. I think viewers though shows will support them, as much as they support this show. So, I think they should go out and take --
HANNITY: Big Bird's a gold mine. I'd love to have Big Bird.
WILLIAMS: OK. Hey, wait a second. Hey, hey, hey, remember, you are on that side of the fence. And you are saying that Obama's using Big Bird -- but we all love Big Bird. You are right. But I must tell you --
(TALKING OVER EACH OTHER)
HANNITY: This is a president that is dealing with small things.
WILLIAMS: The problem here is, that if you -- when Governor Romney introduced the idea of cutting off Big Bird's neck, he was talking about --
HANNITY: Cutting off his neck.
WILLIAMS: He was talking about one 100th of one percent of the federal budget, one, 100th of one percent, Sean. He was making excuses --
HANNITY: Wait a minute. That's not what he's saying.
WILLIAMS: He wants to cut taxes for the rich, raise the military --
HANNITY: Stop with the talking points. Wait a minute. He was say, we are going to borrow money in the name of our children and grandchildren from the Bank of China to fund something that, doesn't meet his standard. He will cut it. David Limbaugh.
WILLIAMS: Yes, OK, go ahead. I'm going to let David speak.
DAVID LIMBAUGH, AUTHOR, "THE GREAT DESTROYER": I agree with Juan. This could be a rare moment. I met him at Tampa and we agreed once that the lunch table. Now we're agreeing again. Obama has to make a big deal out of these non-issues and direct contradiction to what he has been talking about. I mean, this is pure projection. He's making this into a big issue because he can't talk about his record. And really, Sean, what we're seeing is a wholesale failure in his foreign policy, as revealed by this emerging scandal on Libya.
We're finding out that the Obama administration was warned, they were requested aid by Ambassador Stevens. They refused to put up a barbed wire fence because it might look bad just like it might look bad to investigate leads at the Fort Hood terrorist and as a result, 12 or 13 people killed there, four people killed here. And then they lie about it being a video when they knew immediately afterwards, they had direct evidence that this was a planned attack, not as a result of a video, but to admit otherwise, would show the wholesale breakdown of his policy which is do say, if you are nice to Al Qaeda and woo them, they will like us and we won't have any more war with them. The truth is, Lara Logan has even pointed out how fallacious that was, there is no such thing as a kinder and gentler Taliban. There is no such thing as an Al Qaeda that doesn't want to kill us, even if we remove ourselves from the Middle East.
HANNITY: Listen, I actually hope Obama brings up Seamus the dog again. Because that's how small -- you know why? So, then I get to play the tape of Obama admitting that he ate a dog. If that's how small they want to go -- let him play small ball here because --
WILLIAMS: But, Sean, here's why it's not small ball. This was a dodge; remember, Big Bird is introduced to the conversation by Governor Romney --