This is a rush transcript from "Hannity & Colmes," January 2, 2008. This copy may not be in its final form and may be updated.

SEAN HANNITY, "HANNITY & COLMES" CO-HOST: Welcome to "Hannity & Colmes". I'm Sean Hannity. We are coming to you live from the Raccoon River Brewery. We are in Des Moines, Iowa. We are less than 24 hours away from the Iowa caucuses, with the candidates making their final push to get those last- minute votes, and with all eyes on presidential hopefuls. Every move and every comment obviously is being scrutinized.

Mitt Romney has been the focus of much of the attention, due to his war of words with both Mike Huckabee and Senator McCain. And the former Massachusetts governor joins us now. Governor, how are you.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I'm terrific, Sean. Thank you.

HANNITY: All right. I don't know where to begin because it's getting pretty tough out there in the campaign trail. How do you respond that Mike Huckabee's campaign manager — I think the quote was he would like to knock your teeth out.

ROMNEY: (LAUGHTER) Well, I guess they are continuing their positive campaign, as they have over the last several weeks. I guess I'm just not going to worry about that one.

HANNITY: I don't blame you for that. One of the things that came up in the final days — we had Mike Huckabee on the program last night, governor — and it has to do with he calls this press conference. He says he is not going to run a negative ad, and then he shows the press the negative ad. You thought that was a bit of a sinister ploy, didn't you?

ROMNEY: Well, frankly, you know, I don't think the people in the press corps that were there were fooled. I don't think the voters in Iowa are fooled, either. It's a bit like saying, I'm not going to call my opponent any names; but if I were to call him some names, here are the names I would call him. It just doesn't work. So let's keep the campaign on the issues, instead of having personal attacks on one another.

Let's just talk about the things that we care about very deeply, talk about our differences on issues, our differences on records. Those present plenty of opportunities for people to draw distinctions between Governor Huckabee and myself.

HANNITY: Yes. You know, look — I think they should be more honest like Alan Colmes and myself are. We are just straight forward. We call each other names and we don't back down. We have a little bit different style than those in politics.

Governor, you are coming in to this. We are looking at all the different polls. You are scheduled to come in — it's pretty clear you are either going to be number one or number two, probably around this time tomorrow night or about an hour later, within 24 hours. What would it mean in either case to be the number one or number two?

ROMNEY: Obviously, I would rather be number one than number two. But doing really well in Iowa I think is important not only for the primary process, but also for the general election. We are going to have to win Iowa in the fall of 2008 if we want to take the White House because Iowa is one of those purple swing states. So working hard here and having support will mean a great deal to me if I'm the nominee in November of 2008.

Then we go on to New Hampshire. I want to come in number one there. If I come in number two, that's also good, although not as good as number one. Then we go on to Michigan, Wyoming. I will keep on battling. I want to make sure this is a campaign that is successful.

HANNITY: Let me ask you, we'll bring up the two criticisms — you are obviously in the battle here in Iowa with Mike Huckabee, Governor Huckabee. He is saying your health care plan, when you were the governor of Massachusetts, allowed for state-funded abortions. Senator McCain, who you are battling in your close battle in New Hampshire, his ad came out and quoted you as saying that a president doesn't need foreign policy experience.

And I thought in these final hours, or this final 24 hours leading up to the Iowa caucuses here, you may want to respond first to Governor Huckabee and then Senator McCain.

ROMNEY: Well, both are wrong, of course. And let me describe why. First of all, with regards to Massachusetts, the decision that allows people to have abortions with taxpayer funds was made by the court, not by the legislature, and not by me. It's something mandated by the court of Massachusetts. It was not in our health care bill. So that's, of course, a complete distortion and, frankly, inaccurate. It's a court decree.

Secondly, Senator McCain's comment, I didn't say you don't have to have foreign policy experience. I said we don't choose a president based on his foreign policy expertise or being an expert. And of course we want to have people that understand foreign matters and that is important in our selection of a president. But that alone is not how we choose a president.

Frankly, if we just wanted somebody who had a lot of experience and was an expert in foreign policy, we could go to the State Department and pick a random employee out. Instead, you want a leader, somebody who has actually led at a critical time, who has run things. And Senator McCain has been a senator for the last 30 years. He has a lot of comments. He is an honorable man. I just disagree with him on some of the key issues that count, such as illegal immigration. I think he is wrong on that.

I think he was wrong to vote against the Bush tax cuts and he still defends that vote. He says he would not vote for the Bush tax cuts were he to do it again. So, different views.

HANNITY: Let me ask you one other question; you were on the campaign trail yesterday and you talked about kids and you talked about the culture and you talked about the impact that a president can have from the White House, governor. More specifically, you did mention Bill Clinton and the impact that it had on our culture and kids during those years. What specifically do you think was that impact?

ROMNEY: Well, I think everybody can draw their conclusions from the Clinton years. I think the whole affair and the discussion of honesty and President Clinton telling the truth and becoming disbarred by the Bar of Arkansas — all those things were a very sad moment for the presidency and for our nation. I think anybody who is hoping to become president of the United States, Republican or Democrat, would be expected to live by the highest possible standards of ethical conduct, certainly during the time they are president.

My wife and I will do our very best. We talk to our kids. They jokingly say, hey, that's too tough of a task, dad. But we will do our very best if I'm elected president to represent our country well to the world and to the kids of America.

ALAN COLMES, "HANNITY & COLMES" CO-HOST: Governor, it's Alan Colmes, nice to talk to you again. Thank you for coming on "Hannity & Colmes." Certainly it's interesting for us to watch — certainly, as a Democrat, watching the back and forth among Republicans. One of the things that came out today, in terms of your back and forth with Mike Huckabee, is that the Huckabee supporters are saying they are getting called by your backers giving them wrong caucus locations here in Iowa. Is that something you have heard about, aware of, and would you renounce that kind of activity?

ROMNEY: Of course. That's not happening. We are working very hard to get our own voters to get to the caucuses and letting people know where the caucuses are. Actually, I understand in this last week that about 10 percent of the caucus locations were changed by the Republican party of Iowa. Nothing of that nature is going on from our campaign that I am aware of. I would be very, very surprised.

I know our campaign manager here, Gentry Collins. He is terrific. We have a really solid campaign. If you look at the things I have said about Governor Huckabee over the last many months, you will know that I think he is an honorable guy and he is a guy I like. I just think he is wrong on key issues, and I think he is way too liberal on key issues. We are not going to do a campaign on politicking based on anything besides the most fair and upright standards.

COLMES: You were critical of him for calling George W. Bush arrogant, especially in his foreign policy. You just recently gave an interview to Reuters and they are quoted you as saying that "we did a less than effective job in managing the conflict in Iraq following the collapse of Saddam Hussein." You said, "I think we were under-prepared for what occurred, under-staffed, under-planned and, in some respects, under-managed." At the same time, I have heard you praise the great job of George W. Bush. Which is it? I'm confused where you stand on Bush's war policies and how he managed the war.

ROMNEY: Don't be so confused, Alan. You've got to watch the campaign, because I have been saying those same things since I got in the campaign, which is that I do respect the fact that George W. Bush has kept us safe these past six years. And I think President Bush would be among the first to say that following the collapse of Saddam Hussein we were under-prepared and under-staffed and under-planned and that there were lapses in management. Abu Ghraib is one that he points to.

At the same time, at this stage, we are not going to walk out of Iraq and leave the job in a setting where you can have Al Qaeda play a dominant role. This is a message I have been carrying ever since I have been a candidate for president. I respect the president. I support the troop surge. But I also agree that there have been a number of mistakes made over these past several years.

COLMES: Governor, we thank you very much for being with us tonight. We will all be watching. Thank you very much for coming on "Hannity & Colmes." We appreciate it.

ROMNEY: Thanks, Alan. And Sean, good to be with you.

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