This is a RUSH transcript from "The O'Reilly Factor," December 5, 2013. This copy may not be in its final form and may be updated.
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O'REILLY: Continuing now with Governor Sarah Palin her new book "Good Tidings and Great Joy" pretty much takes up my theme that Christmas has to be defended these days in America.
So when did you first notice a change?
PALIN: Oh well you know, I noticed a change back when I was the mayor of our city. And I sanctioned and promoted and participated in our Nativity scene that I would allow --
O'REILLY: That was Wasilla. What year was that?
PALIN: Yes that was in the early 2,000s was when I started hearing from people saying you're not going to be able to keep this up, Madam Mayor. Somebody is going to sue you for allowing God to be recognized in the public square.
O'REILLY: Ok so early 2,000?
O'REILLY: It started to come in.
PALIN: In my life, yes.
O'REILLY: Right. And no that's me too. Me too.
PALIN: Ok yes.
O'REILLY: Pretty much 10 years ago. And then it reached its apex when some major corporations ordered their employees not to say "Merry Christmas", do you remember that?
O'REILLY: And I think you have some examples in your book about that.
PALIN: I do. Yes.
O'REILLY: And then we said to people hey you know maybe you don't want to shop at these places. And then all of a sudden magically, like Santa, they changed.
PALIN: Well, what I recognized in the book too, though, are those businesses that are bold enough to not allow that double standard to be applied. And their employees can say what they want to say. And they can freely express their acknowledgment of Jesus being the reason for the season at Christmas time. And I give shout outs and kudos to those businesses because customers will stick with them then.
O'REILLY: And most of them are doing that.
PALIN: Yes, they are.
O'REILLY: You don't have any beef about happy holidays. Do you?
PALIN: Absolutely not nor Santa Claus. Or maybe of no it's all wonderful.
O'REILLY: You know this woman -- this woman in the "New York Times" today I forget her name. But she writes a column there. She is you know she's mocking you and mocking me saying oh they don't like happy holiday. I don't care about happy holidays. Somebody say happy holidays to me I said ok give me a present that's my guy I don't care if their holidays you know let's -- where is my present.
But when you start to say you can't say merry Christmas.
PALIN: Yes, yes.
O'REILLY: And you can't have the karesh.
O'REILLY: And you can't have Christmas carols by choirs, school choirs, it's part of our culture.
PALIN: Well and that's the double standard that's applied. And that's what I'm not going to sit down and accept and I don't think the majority of Americans will. Because that is -- that war on Christmas is the tip of the spear that really translates into a war on religious freedom and that's a much bigger problem that we will be facing if we just were to sit back and allow the angry atheists who are armed with an attorney to tell us that we cannot say things like "Merry Christmas".
O'REILLY: After you get off the air here you might go over to Times Square there's a big atheist sign now and it's very offensive. It says "You don't need God in Christmas." Ok and it's huge, it's huge. I mean there is money behind these people.
Now do I object to that sign? Not really. I don't object to it. But it's mean-spirited. It goes back to MSNBC. It goes back -- it's just mean spirited.
PALIN: And yet, you are going to be called thin skinned and intolerant if you claim taking offense at seeing something like that.
PALIN: And yet they can sue for claiming an offense taken because we do recognize Jesus being the reason.
O'REILLY: Now let me stop you know because I spray painted over that sign I'm going to be called intolerant? No I wouldn't do something like that.
Now, in your book you have recipes.
PALIN: Yes, yes.