This is a partial transcript from "Hannity & Colmes," June 5, 2007, that has been edited for clarity.

SEAN HANNITY, CO-HOST: And welcome to "Hannity & Colmes." Thank you for being with us. I'm Sean Hannity, reporting tonight from Washington, D.C.

Now, just minutes ago, Republican candidates for president debated in Manchester, New Hampshire, but there was one person missing, and tonight you will only see him right here. And joining us now on a "Hannity & Colmes" exclusive, former Senator Fred Thompson from Tennessee. Senator, how are you?

FMR. SEN. FRED THOMPSON (R), TENNESSEE: Thank you. Good.

HANNITY: All right, so do you wish you were at this debate tonight?

THOMPSON: Yes, do you think they missed me?

HANNITY: I think so.

THOMPSON: No, I'd rather be here with you.

HANNITY: Well, I appreciate it. You know what was interesting? I did a lot of research on you today. One of the things you said that really struck me is you said you had never desired the office of president. It's not something you ever thought you wanted for yourself.

THOMPSON: Yes, that's right, but more and more I wish that I had the opportunity to do the things that only a president can do. You know, I think we're coming to a time of crossroads in our country in many respects. I think there are great opportunities out there. I think there are great perils out there. I think there are great opportunities for leadership. I think we're going to have to do things better and more together than we've ever done before. And you have to think seriously about that.

HANNITY: You said once that, you know, voters may want someone who has lusted for the job since they were student body president. You said, "If a person craves power for the sake of power, if he craves the office for the sake of holding the office, they've got their priorities mixed up." Do you see that in some of the other candidates?

THOMPSON: Well, I don't want to talk about other candidates. I'm really thinking about running for the presidency and not against them. I'm sure that they're good guys. I even caught part of the debate while I was getting ready a while ago.

HANNITY: What did you think?

THOMPSON: Well, they did all right, from what I saw. I think it's kind of counterintuitive for most people to think someone would be ambitious enough, for example, to be senator, but not be ambitious enough to run for the presidency. Most people think that every senator sees the president every morning when he combs his hair. Of course, it didn't take me as long as some, but I never did. I never thought that the price was worth paying.

At the time, we were living in good times. People thought that they would last forever, that the peril would not be out there that we face today, that the economy would rock right along. And, you know, we were in the era of compassionate conservatism and that sort of thing. It was a good time.

I think things are different. I think the times are different. I think the challenges are different. I think I'm different as a person. And, you know, the times have to fit the man; the man has to fit the times. And that's what we're looking at right now.

HANNITY: You are clearing identifying, though, in this thought process, in other words, you're identifying differences in positions that you have with the other candidates. What are some of those differences? And, you know, I guess it's the basic question: Why do you, Fred Thompson, want to consider being the next president of the United States?

THOMPSON: Well, I look at things like the threat that our country faces. Everybody is focused on Iraq now. We ought to be thinking about the day after Iraq. We have a threat out there like we've never faced before. And I don't think the American people are being apprised of it; I don't think they realize that this has been something that's been going on for a few hundred years, and our enemies have another 100-year plan. We have a plan basically to get us through the next election.

And we've got a military that's still in the works, as far as transformation is concerned, to deal with that kind of a threat. We're spending much less than we need to, to face that threat.

I look at things like globalization, the new millions of employees that are coming online in places like India and China that are going to be competing with our people. And some people want to raise the specter of protectionism. We have a tax code that's hopelessly out of date and out of step for our times now, punishes the things that we say that we want more of and makes us less competitive in the world.

We're an aging society, a good thing. We're living longer. Best medical care in the world. But it's going to bankrupt us, our entitlement programs, unless we do things differently. We're going to lose Social Security and Medicare as we know it.

So you can't sit back, and see people, you know, talking their sound bites and going over their list of things to get applause lines and so forth, and see where your country is headed, and knowing what you've got to do for the next generation in order to make it the same way that it was when we inherited from the prior generation, without thinking serious thoughts about what you ought to do about it.

HANNITY: Let's talk about where you stand now. You've created a testing the waters committee. It allows you to raise money, hire staff, gauge support. There's been talk you may announce the Fourth of July, the week of the Fourth of July. Where are you now?

THOMPSON: ImwithFred.com.

HANNITY: Wait a minute. Is this a big announcement?

THOMPSON: Kind of get that out of the way.

HANNITY: Every candidate has a Web site. It's ImwithFred.com?

THOMPSON: That's right. We just put it up. And we want to hear from the folks and check it out.

HANNITY: But that's one step closer?

THOMPSON: Yes, yes. It's a thing that the law allows you to do, test the waters, raise some money in order to get a staff together, and really see what's going on out there, and see whether or not your notion of what's going on in the country is really what, in fact, is going on in the country. And I think that there's something going on that's a little different.

HANNITY: Well, we had heard at one point you may announce on the Fourth of July. You sort of said no in one interview. Are you thinking about that still?

THOMPSON: We haven't decided on a date. The Fourth of July is just as plausible as any other, but it doesn't mean it's going to be the Fourth of July.

HANNITY: All right, let me ask you this. The biggest issue is the war, obviously, in Iraq. It is the defining issue of our time. These are consequential times, transformative times. You have said it's a war between civilization and evil. We just thwarted potential terror attacks at JFK...

THOMPSON: Yes.

HANNITY: ... and at Fort Dix. Explain what you mean, “the battle between forces of civilization and evil.” What do you mean by that?

THOMPSON: Well, it has to do with the need for all of the civilized countries, as I would call them — that is, most all of them that are not terrorist countries or terrorist havens — to realize we have to come together. I mean, that's one of the big failures that we have right now, because a lot of people in other parts of the world just don't see it yet. They see us as the number-one threat and really, in some cases, the only threat. We're going to have to bond together and face this thing together against these forces, because it's going to pick us off one by one.

We've seen our country attacked time and time again over the last decades. Now you see it, whether it's Madrid, whether it's London, whether it's places that most people have never heard of, they're methodically going around trying to undermine our allies and attack people in conventional ways. Meanwhile they try to develop non-conventional ways, and get their hands on a nuclear capability, and ultimately to see a mushroom cloud over an American city. No country can do that alone, and by themselves, when you face the global threat that we're facing.

HANNITY: Let me then take it a step further, because the big question that came up in the debate tonight with the Republicans, "Knowing what we know now, was Iraq the right move, was it the right thing for us to go into Iraq, in your estimation?"

THOMPSON: Yes. Sean, what people don't think enough about is what — if we had not gone into Iraq. You know, after defying the United Nations 17 times, after corrupting the oil-for-food program and the United Nations itself, Saddam would have been there — and defying the United States, of course — Saddam would have been there. The new king of the hill in that part of the world, with his murderous sons still putting people in human shredders, still a threat to his neighbors, still developing his plans for a nuclear capability.

I mean, he had those plans. He had the technical expertise. Whether he had them on one particular day or not is almost irrelevant. Especially today, looking at what Iran is doing, he certainly would have had his hands on, or been working assiduously toward, getting the capability of nuclear weapons. And that's what we would have been faced with had we not done that. Going in there and deposing him was a good thing.

HANNITY: You said, essentially, you agree with what the president is doing now. You said — one comment you made is, “Wars are full of mistakes, all wars are full of mistakes.”

THOMPSON: Yes.

HANNITY: You said, "We went too light later, and the rules of engagement were wrong, and the strategy was wrong." Where do we go from here based on what you just said?

THOMPSON: I think we've got to take the next step, and that is wait and see what General Petraeus says in September. I listen to him. I think he's a man of honor. I think he may be one of the best people we've got in the entire military, and I think he'll tell us the truth.

I also listen to the parents of young people who are over there. Jeri and I have some friends who have kids — two different families who have kids who have gone over there and re-upped more than once. And they come back, and they communicate back a totally different story than what we hear now. They're full of optimism; they're full of hope; they think they're doing something positive for their country and something positive for the people of Iraq. And as long as they have hope and optimism, I have hope and optimism.

HANNITY: Harry Reid is wrong?

THOMPSON: Harry Reid's flat wrong. He's already declared defeat. You know, that's one of the things that the American people have got to be disgusted over, I think. We're only arguing now over the date of our surrender.

HANNITY: And Hillary Clinton is wrong saying this is George Bush's war?

THOMPSON: Well, of course it is. I mean, which way did she vote when the time came?

HANNITY: She voted for it, and then she just voted to cut off funds.

THOMPSON: Yes. Of course, you know, it's a public opinion poll deal for most of them, and not looking at the long...

HANNITY: What does that mean to you? You vote to send them to war, and then you vote to cut off funds, and now the guys is saying they sent them to war, and then they said...

(CROSSTALK)

THOMPSON: That means you want to be president worse than anything in the world. And they know how to read public opinion polls.

HANNITY: We're going to take a break. More with Senator Fred Thompson coming up in just a minute.

(COMMERCIAL BREAK)

HANNITY: And welcome back to "Hannity & Colmes." I'm Sean Hannity. We continue now our exclusive interview with former Tennessee senator, potential presidential candidate, Fred Thompson. I was trying to get a date out of you; I didn't get one.

I want to talk about Iran. There was an estimate that came out; they could have nuclear capability within three to eight years. As president, how do you stop that from happening?

THOMPSON: Well, that's almost an impossible one to answer, Sean. The president has access to information that I don't have. Let me tell you what I think about Iran, and it might lead you to some ideas about the approach I would take.

I think, first of all, Iran might fall of its own weight if we give it a little help. We're not doing nearly enough to get communications in there and let those people communicate with one another. You know, if everybody in Iran had a computer, it'd be a free country today. There are riots and shootings of Iranian Guard that are seldom reported, but they're taking place all over the country nowadays. Their inflation is up; unemployment is up. You know, they have to import a lot of their basic staples. Apparently...

HANNITY: One refinery.

THOMPSON: Yes, 40 percent of their oil, or gasoline. And, you know, they're apparently trying to follow the North Korean economic model there. And, you know, the radical religious approach to everything trumps, you know, sound economics. Eventually, that's going to catch up with them. So we've got to encourage that and use our intelligence resources and use our intelligence capabilities, if they're sufficient, to do everything we can to help bring that about, I think.

HANNITY: If it's clear that they're getting close to getting the weapon, would it be your policy to support preemption as a means of taking out or wiping out those facilities, considering they've, you know, repeatedly threatened to wipe Israel off the map?

THOMPSON: Yes. Yes.

HANNITY: It would be?

THOMPSON: Yes.

HANNITY: All right, let me ask you about this. We had news today about Scooter Libby, 30-month prison sentence. You called it a shocking injustice. Why?

THOMPSON: Yes, well, it has been all along, for a long time. I've never seen a case where so many government offices, and officials, and entities fell down on the job, and helped perpetuate an injustice for their own ends. I mean, it's tragic, and it's below the radar screen with most people, except around here. I've been a prosecutor and a defense lawyer, and I followed it closely. I didn't know Scooter, but I called him up when I saw what was happening. And I said, "I'll help you if you need help," a long time before I thought about presidential politics.

But you got a situation here where they knew shortly after they started this fiasco that no crime had been committed. What they were looking at didn't constitute a crime, because of the status of Valerie Plame. She wasn't a covered person under the statute. Then they found out that Scooter Libby didn't leak her name. Richard Armitage over at the State Department did that, but they still kept digging and digging, because the press expected the special prosecutor to come up with somebody in the Bush administration.

The Justice Department never should have appointed special counsel. They were taking criticism and heat from the press and Capitol Hill. And they had to do something, they felt like, so they caved, appointed a special counsel. And he spent a year and a half digging and digging, and he came up with a process crime allegation.

Scooter Libby was here looking at national security estimates, and working like two full-time jobs, and his doctor said, you know, working himself to exhaustion, trying to protect his country, and they found some inconsistent statements that he made, allegedly. So they put a case against him, and it was rife with inconsistent statements from the government witnesses.

HANNITY: Right.

THOMPSON: And yet they picked him out to bring the burden of this entire political witch-hunt on him, this single individual, and prosecuted him. And now the judge saw fit to go way beyond what his own probation officer recommended was a suitable sentence.

HANNITY: Statutory guidelines, yes.

THOMPSON: Yes, yes, and this sentencing is just the last...

HANNITY: I only have a second in this segment. If you were president, would you pardon him? And do you think the president would pardon him? And would you pardon him now?

THOMPSON: I would, absolutely.

HANNITY: Do you think the president should?

THOMPSON: It's a gross injustice perpetuated in large part by this CIA, and this Justice Department, and this special counsel, who they appointed, and it ought to be rectified.

HANNITY: All right, we've got a lot more with Fred Thompson, coming up.

(COMMERCIAL BREAK)

HANNITY: And welcome back to "Hannity & Colmes." I'm Sean Hannity. We continue our exclusive interview with "Law and Order" star, former Tennessee Senator Fred Thompson.

All right, we don't have a lot of time. I need quick answers here. The Democratic debate the other night, I sum it real quick: End the global war on terror phrase; raise taxes; nationalize health care; retreat in Iraq. Sum up the major Democratic candidates?

THOMPSON: I think that's a pretty good summary.

HANNITY: What does it mean to you, if you become the nominee?

THOMPSON: It means that they're wrong. It baffles me that we're facing the bankruptcy of the nation and a global threat that we're not really prepared to deal with, and they're talking about some the things that they're talking about, with the clichés that they've been using now for 15 years.

They think, by not being George Bush, that they can win this next election. They think that, because the pendulum swings as it does politically, and the Iraq war is unpopular, that all they've got to do is do this sort of thing, and it will fall in their lap. And if we don't do things better and smarter, it will fall in their lap.

HANNITY: Yes, let me ask you this. There are three issues that have come up, because I've examined your record thoroughly now, knowing this interview is coming up. There are three issues come up where people question your conservatism.

One is when you checked a box in 1994 when you were running for Senate, where you — the box said, "Abortion should be legal in all circumstances for the first three months." That wasn't your voting record, interestingly. Did you make a mistake checking the box?

THOMPSON: I don't remember that box. You know, it was a long time ago, and I don't know if I filled it out or my staff — based on what they thought my position was — filled it out.

But here's what the deal is on that. I've always thought that Roe v. Wade was a wrong decision, that they usurped what had been the law in this country for 200 years, that it was a matter that should go back to the states. When you get back to the states, I think the states should have some leeway.

I might vote against one approach, but I think the state ought to have it. And I would not be and never have been for a law that says, on the state level, if I were back in Tennessee voting on this, for example, that if they chose to criminalize a young woman, and...

HANNITY: So states' rights for you?

THOMPSON: Essentially, federalism. It's in the Constitution.

HANNITY: Federalism. All right, the other issue: you were one of 11 Republicans who supported McCain-Feingold. A lot of conservatives are angry at that. Do you still support it? Was it the right decision, in retrospect?

THOMPSON: Part of it was, and part of it wasn't. The part that I came to town to change was the increasing amounts of money being given to politicians. The Clintons showed us how to use soft money in ways that people up until recently thought was against the law. And more and more large donations flowed into the parties and to the candidates.

I said, "Let's raise the hard money legitimate limits that we've always had from $1,000" — it was my amendment, really, that got it from $1,000 to $2,000, plus indexed for inflation, do away with the soft money. I still think that's a good idea. I support that. Coming to a politician and giving him a bunch of money and having business before him is not a good idea.

HANNITY: But 60 days before a general, 30 days before a primary...

THOMPSON: That's not working.

HANNITY: That's not working?

THOMPSON: It shouldn't work.

HANNITY: You would repeal that?

THOMPSON: Yes.

HANNITY: Let me ask you the one issue — you split your decision on Clinton impeachment. You voted to convict on the obstruction, but not the perjury. You still stand by that? Was that the right decision?

THOMPSON: Absolutely. It didn't have anything to do with how I felt about him. It had to do with what I considered my role to be. I considered my role to be a judge, and I had to be dispassionate toward the individual. I went back to the founding fathers and what they thought constituted impeachable offenses and was quite surprised, in some respects, that some misbehavior did not constitute impeachable offenses in their views. So I followed that, and that caused me to split my vote.

HANNITY: Let me ask you this. Your family has already come under attack. Are you ready for that aspect of a presidential run, where your family members, your wife, your kids come under fire?

THOMPSON: Well, you're never ready for that. And your reaction to that initially is very visceral. But when I have a wife who's as strong, and sweet, and as good a mother as I have. Who puts it all into perspective, gives me courage to keep my eye on the ball — and my eye is on the ball, and I'm not going to be dissuaded by all of this. It's another disconnect between the professional politicians, and the press and Washington and all of that, from the American people, who are sick and tired of all that. So it's a badge of honor to get attacked by some of these bozos.

HANNITY: That's a good thing. All right, we have a minute left. You become president, first 100 days, top five priorities, off the top of your head, you'd like to accomplish?

THOMPSON: I'd go to the American people, first of all, and explain to them the significance of this global war in the war on terror and what we need to do. I would tell them that we need to reform a tax code.

HANNITY: Change the tax code?

THOMPSON: Yes.

HANNITY: Alter it?

THOMPSON: I think it needs a total overhaul. I would explain to them, in order to keep our economy going, we would need to keep taxes low. I would explain to them that we cannot continue down the same road that we're traveling as far as Social Security, and Medicare and entitlements are concerned, that we're bankrupting the programs and pitting one generation against another.

And we're better than that. We need to come together, the way our country has done time and time again over the last 200 years, and exercise a little common sense, and get back to the basics that were in the Constitution.

HANNITY: Senator, we're out of time. Good to see you again. Thank you for being with us.

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