This is a rush transcript from "Hannity & Colmes," January 16, 2008. This copy may not be in its final form and may be updated.

ALAN COLMES, CO-HOST: Welcome to "Hannity & Colmes." We get right to our top story tonight. Joining us is now is man who some say has some momentum coming out of Michigan, presidential candidate Mitt Romney. Governor, welcome to "Hannity & Colmes."

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Thank you, good to be with you.

COLMES: What's your biggest challenge now?

ROMNEY: Well, probably keeping on racking up more victories. At this stage, I've got two golds and two silvers. I'd like to have more golds and not as many silvers, going forward, but I have got a great field of people we're competing against. You know, I have to get across the country. We've got a lot of states coming up soon. We're going to have 22 states in just a few days that will be voting for their nominee, and I hope I'm that person.

COLMES: Will this all be over by Super Tuesday for the Republicans?

ROMNEY: You know, I think a lot of us predicted that it would be over within the first two or three primaries, but it didn't work out that way. Everything has changed in this race. It's much more fluid than I think we had expected. And I don't think that's because the voters haven't found anybody they like. I think it's because they find a lot of people they like. You know, you have good — you have a national hero in John McCain, a great mayor in Mayor Giuliani. You have Fred Thompson, who's well-known and respected, Mike Huckabee, who's a gifted speaker. And, you know, you take all of us together, it's not a bad group. People are having a hard time making up their minds.

COLMES: I know you said it's the depth of field that makes it — of course, the other side is, those who say the Republicans can't find anybody to put their — to put on the mantel. Nobody has got momentum coming out of any of the caucuses or primaries as of yet.

ROMNEY: There's some truth to that. I'm pleased that I got the support of a couple of early states, Michigan and Wyoming, and that I have more votes, as you know, than anybody else, not only delegates, but shear votes also from people who are voting for president. But you are right. It's not, by any means, a foregone conclusion that any one of us will pick up the next two or three states and then on to February 5th.

So, you know, we'll keep on working hard. I think, when it's all said and done, that people are going to focus on the backgrounds and the record that each of us have. They're also going to look at the major issues that we face. I frankly think they're going to want a person who understands how the economy works, who's been in the economy, who understands why jobs come and go. That's, of course, what I've done all my life.

They're going to want a person who will say no to illegal immigration. That's what I've also done as governor. And I think those things will be deciding.

COLMES: Governor, John McCain just said today we need to prove that electing a president isn't about how much money a candidate has. Does that sound like a little dig at you?

ROMNEY: I don't know. I actually think we're better of to do as I did at the opening of this show, which is to describe the positive features of our opponents and talk about differences on issues. I think the personal digs just turn people off and demean the process. This is the presidency of the United States we're talking about, and hopefully we can draw the line at personal attacks, and instead just focus on issues that may separate us.

COLMES: You say that now, but both John McCain and Mike Huckabee seem to have taken great exception to what you've said about their record, especially as it pertains to immigration. They seem very offended by what you said in the prior primaries, before Michigan.

ROMNEY: You know, unfortunately the truth is a very stubborn thing, and I think everybody in the country realizes that Senator McCain stood up with a bunch of other senators and proposed a bill that had within it a provision that allowed every illegal alien, other than those who had committed crimes, to stay here for the rest of their life. And that is a form of amnesty. It's not the word that I chose, but it's a word that others have chosen to describe that bill.

It was roundly rejected by the American people. And Senator McCain may want people to forget about it, but he stands by it even to this day. He says he wants to secure the border first, but second, he's going to continue with that program that allows illegal aliens to stay in the country. And he doesn't like us reminding people of that, but that is his position.

SEAN HANNITY, CO-HOST: Hey governor, Sean Hannity, congratulations. That was a big victory for you yesterday. I've been doing some checking here. You lead the Republican field in the total number of votes, total number of delegates. You've won more votes in the nomination process so far than Mike Huckabee, Rudy Giuliani, Fred Thompson, and Ron Paul combined. And yet everyone was saying, going into Michigan, if you don't want Michigan, that's it, Governor Romney has got to step out. I've never understood the thought process of these so called experts and pundits.

ROMNEY: Well, you know everyone has got to say something when the camera is on. If you're a pundit, you've got to pull something up. I was the same way you were in that. I figured, I'm going to keep on racking up as many delegates as I can, getting as many votes as I can. I'm not going to worry about how they, as they say, the tides are shifting. I'm just going to keep doing the slow and steady, and ultimately that will win the race.

HANNITY: Let me ask you about Michigan, because Michigan, Minnesota, Wisconsin, these are states that have been on the edge of gaining Republican support. As a matter of fact, the last time a Republican won a competitive Michigan G.O.P. primary and then carried the state in the general election was 1976, and that was President Ford at the time, another native from Michigan. Do you think it's possible in the general election that you could take Michigan?

ROMNEY: Yes, I think that is the key, actually. I think if I'm the nominee of the Republican party, which I obviously would intend to be, would love to be, the key is I can win Michigan. And I can do that because I care very deeply about the state, I understand its economy. I understand the auto industry to a certain degree. And I'm committed to fighting for every good job in this country and Michigan and across the country.

And that connection I have to the state is just enough to help bring people who are normally thinking to vote toward the Democratic side to vote for me. I can win Michigan. And if I win Michigan and perhaps one or two other of those Midwestern states that typically go blue, then we have the White House. So this is a very important election for that reason.

HANNITY: I think those are very important states, and they seem to be teetering on the edge. They're right there for the Republicans, I think, to win over, especially Michigan, which has suffered under a terrible recession that the rest of the country has not suffered under, as you pointed out.

Let me talk a little bit about strategy and where you go from here. Obviously we have South Carolina, Nevada and Florida coming up leading into Super Tuesday. Because of the new paradigm that's been created in how this is now all compressed, you can't compete in every state. What is your strategy for South Carolina, Nevada, and Florida as we go forward?

ROMNEY: Well, I'd like to do well in South Carolina. John McCain has a big lead here. He's been working here for a long time and spending a lot of money as well. So he's most likely the guy who will take away South Carolina. But, you know, surprises happen. He was way ahead in Michigan as well, and, of course, I ended up winning that by a wide margin. So things can happen that people don't expect.

But this is a real short time frame here, so I want to do well in South Carolina. I'd like to win Nevada. I've been working Nevada. I've made trips there. My family has. My son is there right now. My wife is there right now. We'll do our best to win Nevada. And then of course on to Florida, I'd like to do well in Florida.

HANNITY: What Super Tuesday states — Florida is very compressed, in terms of the latest poll numbers. What Super Tuesday states do you think you'll do well in?

ROMNEY: I think that depends on what happens in the next three states and we see who does well in each of those, and that will tell me where I'll devote my time and resources. You can't hit every one of the states equally. You have to really concentrate your time in those states that you think have the biggest impact. So we'll see.

(COMMERCIAL BREAK)

HANNITY: And we continue with last night's big winner from Michigan, presidential candidate Mitt Romney is with us. I want to ask you, because your chief opponent in this race seems now to be, at this moment — and it's changed a lot in the course of the campaign — seems to be Senator McCain. Now, for example, when Fred Thompson took on Mike Huckabee in the South Carolina debate, he actually called him a Democrat.

Conservatives have been very open in their dislike of a lot of Senator McCain's positions. Do you think Senator McCain is a conservative? Do you think he's liberal? Do you think his policies are closer to the Democrats on many issues?

ROMNEY: Well, you know, each person is going to have issues on specific issues that may line up more with one party than another. Senator McCain is a courageous and good man. I just happen to disagree with him on a number of very important policies. I disagree with him on tax policy generally. I believe that lowering taxes helps stimulate the growth of the economy and allows us to have more funds for the government, and of course a lot more funds for the people whose taxes are lowered.

So I supported the Bush tax cuts. He voted against the Bush tax cuts. He was one of two Republicans to say no to the Bush tax cuts. And at the time what he was saying was he was against them because they were a tax cut for the rich, and that's exactly the wording that came out of the Democratic playbook.

Now, he also, as you know, was a co-author of this bill providing a form of amnesty for illegal aliens. That, I think, was an enormous mistake. And, of course, I think for a while there — maybe I'm wrong on this — wasn't he flirting with the idea of becoming a VP running mate of John Kerry? I mean, that's not something I would contemplate to tell you the truth. So it depends on the issue.

HANNITY: Do you disagree with him on McCain/Feingold? Do you disagree with him when he joined together 14 senators, the gang of 14? Do you agree or disagree on those two issues?

ROMNEY: Yes, of course, McCain/Feingold, I think, was an enormous error. I'm sure it was done out of the best of intent to try and reduce the impact of money on politics, but, in fact, the influence of money on politics has gotten worse, not better, and the 527's, which have always been around — now the 527's are the place where the big money goes and the most powerful messages and the dirtiest messages are coming without knowing who they're coming from. It's made politics worse, not better.

And one of the first things I'd do if I were president is act to get that bill repealed and yet John McCain still stands by it.

HANNITY: Let me then ask you this; you disagree on taxes, McCain/Feingold, McCain/Kennedy amnesty, you disagree on the Gang of 14, marriage amendment, so there's some significant differences. The question is, if you, Governor Romney, put out an ad and give your position versus his position, why do some people say that's negative? And do you think that's fair? And are you planning, considering this is apparently going to be a pretty tough race — are you planning on doing just that?

ROMNEY: Well, you know, I'll keep my own counsel as to what we plan for ads —

HANNITY: You can tell me, just between you and me.

COLMES: And I'll shut my ears.

ROMNEY: But it's totally appropriate to talk about differences on issues, and that's what we've attempted to do, but I'm always very careful. We do our very best to make sure we don't attack the integrity or the character of the person we're running against on this Republican side because ultimately that person may be our nominee and I don't want to hurt that nominee.

COLMES: Or running mate. Who knows.

ROMNEY: Yes, that's true. But I also would wish that the other guys would follow the same rule.

COLMES: Well, the other guys are following the same rule. Let me ask you about this, you've been praise worthy, governor, of President Bush's tax plan. You're praise-worthy of his stance on the economy. You've got stock market fears now, fearing a recession, which is why the market has been going down. You've got the Asian stock market, the London stock market and our own stock market here concerned, tremors going through the market because of fears of a recession. The Congressional Budget Office is saying the risk of a recession now is elevated. Is this because of the economic policies of this administration?

ROMNEY: No, actually, the kinds of adjustments you're seeing and the kinds of worries you're seeing are the result of some very long-term bad choices that have been made by Washington. The decision not to make any serious effort to become energy independent is resulting in extraordinarily high gasoline prices for us and around the world and is sending shock waves around the world. It's emptying people's wallets unfairly. And shame on Washington for not having dealt with this a long time ago.

COLMES: Who's Washington? Who's in charge? Who's been in charge for the last eight in the executive branch and, prior to the last Congressional election, on the legislative side?

ROMNEY: Well, as you know, I'm not trying to blame one party or the other, but I do believe this president has been pretty consistent in saying we ought to be drilling in Anwar. And we ought to be developing additional energy resources. And it's the Democrats who have been listening to the more extreme environmentalists who have said no, no, no. So we haven't built nuclear power plants. We haven't built the additional capacity in oil field capacity. We haven't been using coal, clean-burning coal as we could of.

So we're finding ourselves in a position where, guess what, we're getting taken to the cleaners by the people who own the oil around the world, and not the oil companies so much as the countries that own it.

COLMES: It's the Democrats talking about alternative energy. The Republicans haven't done anything on alternative energy?

ROMNEY: Alternative energy is a wonderful source of energy and may represent, what, five percent of our energy needs at its maximum, it's peak, five or 10 percent? It's wonderful. And so having very expensive alternative energy is something we'll surely do. The Republicans have fought very hard for Ethanol. And it's a good source of additional renewable energy, but we have to recognize we're going to have to go beyond those things if we want to be serious about being energy independent.

COLMES: We're just out of time. We thank you for being with us tonight, governor.

ROMNEY: Thanks Alan, Sean. Good to be with you.

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