This is a partial transcript from "The O'Reilly Factor," February 26, 2007, that has been edited for clarity.

BILL O'REILLY, HOST: In the "personal story" segment tonight, New York Senator Chuck Schumer has a new book out called "Positively American: Winning Back the Middle Class Majority One Family at a Time." In the book, he actually scolds his own party somewhat.

The senator joins us now. Before we get to your book, I have to ask you about the shootout been Obama and Hillary last week. How did you read that?

SEN. CHUCK SCHUMER, D-N.Y.: Well, read it that I'd rather it didn't happen on either side. I mean, I think they are both very good, strong candidates. I think that things in this election are more likely to go Democratic than Republican if we don't spend all of our time fighting with each other.

O'REILLY: But Geffen came out with some pretty strong charges against the Clintons, you know, calling them liars and this, that and the other thing. And it signaled to me a split between the far left and the moderate left in the Democratic Party.

SCHUMER: Well, let me say this about Hillary. Everyone always says oh, she puts up her finger to the wind. But here on the Iraq War, the most important issue, if she wanted to win the primaries, she should move left. And instead she's.

O'REILLY: And I gave her a compliment.

SCHUMER: Yes, she deserves respect for that.

O'REILLY: OK.

SCHUMER: ...even from people who don't like her.

O'REILLY: But the division between the far left and moderate left in the Democratic Party exists, does it not?

SCHUMER: No question. But I argue this. I'd say we are less susceptible to it this year than the Republicans. Not true in '04. Not true in '00.

O'REILLY: Well, the Republicans have their own problems with the committed right and then Giuliani and McCain who are more...

SCHUMER: Democrats more want to win, because we haven't won in so long.

O'REILLY: Maybe so. All right. Now, I liked your book, particularly the first few pages where you have the 50 percent solution, you actually puts forth solutions to complicated problems.

But on the illegal immigration thing, you've got five bullet points but no border security. This is going to hurt the Democratic Party, because the Democratic Party simply will not engage how we should secure our southern border.

SCHUMER: OK, I voted for the fence. OK? But I don't think it's...

O'REILLY: Where is the fence in this?

SCHUMER: I say in the book this is a better solution, the one I have. Let me tell you what it is.

O'REILLY: Why can't we do both?

SCHUMER: OK. Look, this is better. You can do both. I think the fence — here's what I think. Why do these illegal immigrants come here? For a job. Not for benefits.

O'REILLY: OK, this is a smart audience.

SCHUMER: You build a fence across the southern border. You make a dollar in profits in Southern Mexico. You'll go by boat. You'll go over the Canadian border.

O'REILLY: Stop...

SCHUMER: Let me give you my solution. They'll find a way.

O'REILLY: Let them find a way.

SCHUMER: Here is my solution. They come for jobs, right? Why do employers — when employers hire illegal immigrants they say, "I don't know."

O'REILLY: Get a national I.D. card. Biometric employment card.

SCHUMER: With a chip that matches your...

O'REILLY: I love it.

SCHUMER: Wait. You — every employer has a swipe machine. You've got to swipe the card. You, me, legal immigrant, machine comes back, hire. If you don't $50,000 fine. Jail. You will cut illegal immigration by 90 percent.

O'REILLY: If you put — well, the fence stops the drug trafficking. It stops a lot of things. You do both. I'm not a big fence guy. I'm a National Guard guy. The reason the Democratic Party won't take a strong proactive secure the border is because they don't want to alienate Hispanic voters. And that's why President Bush and John McCain don't do it either. You know that. Let's tell the truth.

SCHUMER: What I have in this book is once my middle-class fictional couple, you know the Baileys, Bill and Eileen, once they're convinced — they're not anti-immigrant. They're nice people. They're just anti- illegal immigrant.

O'REILLY: Right.

SCHUMER: Once they're convinced that illegal immigration stops they will allow much more legal immigration. And the only thing I say in this book is our immigration should be far more diverse, diverse economically. You need a professor of metallurgy at Cornell, get him.

O'REILLY: Just get the guest worker program.

SCHUMER: And it shouldn't be 70 percent of all of poor people from one country.

O'REILLY: Now do you think you are liberal guy?

SCHUMER: Yes, I'm pro-immigrant.

O'REILLY: But this book isn't a liberal book.

SCHUMER: No, it's mainstream. It's moderate. It's aimed at what the middle-class really wants. It's neither liberal nor conservative.

O'REILLY: It's not a liberal book, and I think you masquerade as a liberal.

SCHUMER: No.

O'REILLY: No, I do. I think you're more conservative than I am.

SCHUMER: I am not.

O'REILLY: You are. You take a cheap shot at the FOX News Channel.

SCHUMER: I do. Compliments.

O'REILLY: Well, you say that the best — if you've got to have one thing on the side. But then you say Karl Rove tells us what to do. You know that's just dopey.

SCHUMER: Here's what I say.

O'REILLY: You're just playing to the — OK, you got ten seconds. Wrap it up.

SCHUMER: Wrap it up?

O'REILLY: Yes.

SCHUMER: I got so much to say.

O'REILLY: Well, that why they have to buy the book for $25.

SCHUMER: I'd say the book is aimed at middle-class people who right now feel neither the Democrats nor Republicans talk to them.

O'REILLY: Right.

SCHUMER: If we as Democrats talk to them, we'll be the majority for a long time.

O'REILLY: All right. Chuck Schumer, everybody. You're looking at a conservative. There it is.

Watch "The O'Reilly Factor" weeknights at 8 p.m. and 11 p.m. ET and listen to the "Radio Factor!"

Copy: Content and Programming Copyright 2007 Fox News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2007 Voxant, Inc. (www.voxant.com), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.