This is a rush transcript from "Hannity & Colmes," January 23, 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. We're less than a week away from what could be the most important Republican primary to date, the battle for Florida. Joining us now, presidential candidate Mitt Romney. Governor, welcome back to "Hannity & Colmes".

GOV. MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Thanks. Good to be with you.

COLMES: The polls in Florida seem to show a neck and neck between you and John McCain, so it's pretty close there, isn't it?

ROMNEY: It is very close here. It's a pretty tight race. I think you'll find that people are joining my team. We're finding that because people are very concerned about the economy, and because I've spent a lifetime in the private sector and have created jobs there, and went to the Olympics and helped turn things around there, and was in the state of Massachusetts where things were tough, but we got things back on track, that people want somebody who has actually done what needs to be done to our national economy, and that's get things back on track.

COLMES: Was it a mistake to focus so much of your early campaigns on social issues like abortion and gay marriage, and all those issues, which are really not front and center in this campaign?

ROMNEY: Well, those were issues that, of course, were important to people in the early primary states, to know where you stood on social issues and to make sure that you represented all three legs, if you will of the Republican stool, social, economic, and foreign policy conservative principles. But I think as we're getting close to this race here in Florida, people here — by far and away the most frequent question they ask me is; what can you do to strengthen our economy. And I lay out my short-term stimulative plan, and I also lay out my long-term plans to grow our economy and make sure that people in the country have good jobs and a bright future.

COLMES: I know you have been outspoken as of late on the tax cutting and that being one part of your stimulus plan. As you know, the Boston Globe cited you telling the congressional delegation in Massachusetts a few years ago that you, quote, "would not be a cheerleader for tax cuts" that you didn't believe — that you couldn't agree with back when Bush was proposing those cuts in 2002.

ROMNEY: Well, actually, I was serving as a governor. I didn't talk about federal issues. The first time I came out to talk about the Bush tax cuts, I came out and endorsed them and supported them. I've said that the country needed a stimulus. It's what we got. I've only been in favor of those tax cuts. I've not opposed them in any way, shape, or form.

COLMES: Is that an accurate quote, that you said you wouldn't be a cheerleader for them?

ROMNEY: And where was this, supposedly?

COLMES: The Boston Globe had you quoted as having said that to a state congressional delegation in 2002.

ROMNEY: So we have Barney Frank saying what I said in a meeting?

COLMES: I'm just telling you what the Globe reported.

ROMNEY: Well, you know, I really don't recall every word I said in a private meeting with Barney Frank or the congressional delegation, but I do know what I said publicly, and that was that I was concentrating on the job of being governor, and the first comments I made about the Bush tax cuts were in favor of the Bush tax cuts. So, you know, let's make sure that we focus on the things that we say as we talk to people, and I've endorsed the campaign of President Bush and, of course, fought for his tax cuts.

COLMES: Are you satisfied with the Bush economic policies? Are they in any way responsible for where we are now, on the verge of in not in a recession?

ROMNEY: You know, I love it, Alan, how every time something is going not terribly well, we all call it the Bush plan. But you realize that you have two branches of government in Washington, and what's been happening in Washington is massive over-spending with earmarks, pork barrel spending. The president would dearly love to strip those bills of all that excessive spending, but it's been done by the Democratic Congress.

COLMES: They've only been in power a couple of years. Who's been running the country for the last eight years? Who's been in power? Who's been spending on the Pentagon? Who's been spending on the war? I mean, rhe fact of the matter is, where's the responsibility? It was the Clinton/Gore recession, I heard, at the end of their administration.

ROMNEY: Well, as a matter of fact, it was the Clinton/Gore recession that happened at the end of their administration. Of course, that was exacerbated by what happened in 9/11 and the Internet bubble burst, and the president cut taxes twice, and every Republican voted with him except for two, John McCain and one other. I think that was the wrong course.

The economy has grown, and now we face two very significant challenges. One is a spike in the price of oil, which is, of course, taking a lot of money out of consumers' pockets. And number two is the subprime mortgage crisis, and that's something which, unfortunately, was not predicted by a lot of folks. Had it been predicted, we could have prevented it. But, now, of course, the question is what are we going to do to keep it from affecting a lot of people. And the answer is a short-term stimulative program and a long-term growth program.

SEAN HANNITY, CO-HOST: Hey governor, welcome back to the program. Sean Hannity here. And congratulations on Michigan and Nevada, two big wins. So far most votes, most delegates; two new polls out have you leading in Florida. And now it's become very, very competitive in the state of California, now that Fred Thompson and — Mike Huckabee's pulled out of Florida, so it seems. Where do you think those votes will be most likely to go?

ROMNEY: Well, you know, I'm not a pollster, not a prognosticator or a pundit, as it relates to where the people are going to go. But I do think that because Fred Thompson was concentrating on rebuilding the Reagan coalition, if you will, of social conservatives and economic and foreign policy conservatives, and that that's the same course I've been pursuing during my entire campaign, that a lot of Fred Thompson support will come my way. I sure hope so. I'm calling those guys and asking for their help. I want to get as many of the Thompson people as I can.

HANNITY: Do you — you mentioned yesterday in an interview right here on Fox that you would have Senator Thompson on a short list for vice-president. Do you stand by that today?

ROMNEY: Well, I'm saying that the people who are on the stage who are fighting for the presidency are all folks that would merit that kind of attention. We have a really strong field. People ask me from time to time, why do you think it hasn't narrowed down yet to one candidate in the Republican process? And the answer is; we've got a great group of candidates. And so, with very few exceptions, they all would merit a very close look for V.P., whether I'm the nominee or someone else is.

HANNITY: Governor, one of the things that has emerged — you were discussing slightly with Alan here moments ago — is maybe the economy is emerging as a bigger issue in this campaign than people anticipated. Not necessarily the war, although we all know that this could change without a moment's notice. I want to specifically ask you, do you think the economy presently — because we've had 10 million new jobs created in recent years, unemployment at record lows consistently now for the last number of years, interest rates low, inflation in check.

I know there has been a lot of talk about the subprime mortgage issue and the housing bubble about to burst. Is the economy fundamentally solid in your view?

ROMNEY: Well, the foundation of our economy is solid, albeit an economy that has some long-term trends that give you real concern, such as the decline in the dollar, the foreign exchange, the currency deficit that we have, the current account deficit that we have. Those things give you real heartburn. But fundamentally our economy seems quite stable.

But what's happened most recently, in the last few months, is that there have been a number of alarming statistics that have come forward — the Fed Reserve has seen them — suggesting that we could be heading for a tipping point that would take what has been a strong economy and turn it very sour. For that reason, the Fed took very aggressive action to keep that tipping point from occurring. And I think that Congress and the president should do the same thing with a stimulative effort, which is not just short-term, but long-term directed.

HANNITY: And how much would that stimulus effort be? How much would you cut taxes?

ROMNEY: Well, I'd cut taxes pretty significantly, both for corporations and for individuals, with a short-term and long-term effect, probably half and half, half short-term, half long-term.

HANNITY: Alright. Governor Romney, stay right there. We'll have more with the governor right after this break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ROMNEY: Governor Mitt Romney, how are you.

VOICE OF GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: Fine. How are you?

ROMNEY: I'm just fine, governor. How are you doing today?

SCHWARZENEGGER VOICE: Good, good.

ROMNEY: What can I do for you?

SCHWARZENEGGER VOICE: First, I would like to just get to know you.

ROMNEY: Well, we've had the chance —

SCHWARZENEGGER VOICE: I want to ask you a bunch of questions and I want to have them answered immediately.

ROMNEY: Go right ahead and shoot.

SCHWARZENEGGER VOICE: Bipartisanship always, my principles of leadership, progress over politics.

ROMNEY: Well, I don't think anyone could disagree with that.

SCHWARZENEGGER VOICE: Who's your daddy and what does he do?

(END VIDEO CLIP)

HANNITY: That was a clip of what happened when Governor Romney's son decided to have a little fun at his father's expense. We'll continue now with presidential candidate Mitt Romney. Now, that's funny, governor.

ROMNEY: That was pretty good. Matt got some audio clips of Arnold Schwarzenegger off the Internet, and plays them to me. He called from California. He plays them to me over the line. I thought it was Governor Schwarzenegger. That's what my advance guy told me, you got a call here from the governor of California. So I pick up the phone, hello, governor, and he starts with those questions.

After a little while, I figured out OK, there's something funny going on here.

HANNITY: That's pretty funny.

Alright. Governor, let's assume we get past Super Tuesday. If you were to win the nomination, we saw the other night how contentious it can get, and I think Hillary Clinton is going to win it for the Democrats in the end. You saw how contentious it got in that last debate. How do you strategize against somebody like a Hillary Clinton in a general election campaign, knowing that they're fierce, knowing that they go on the attack, knowing they send their surrogates out to attack? What would be your strategy?

ROMNEY: Well, you know, when somebody's going to attack, the right response is always to return fire with fire. But you hope that at a time like this, with men and women in harm's way, with our economy very fragile, with a lot of people without health care, with schools failing a lot of our kids, that we could actually have a debate between the Republican nominee and the Democratic nominee that talks about issues and that shows the kind of respect that the American people want. I hope we can see that.

HANNITY: I've studied the Clintons. I've covered them now for a lot of years. I don't think they're capable of that. I think, at the end of the day — I think at the end of the day, they just believe in the rough and tumble world of bumper stickers and slogans, smear besmirchment and attack. Do you think I might be right?

ROMNEY: I think that's exactly their game plan. I think that's the plan they've played by from the very beginning. I think you can expect them to be vicious and to be attacking. But I think it's very possible that the American people will respond negatively to that. And I would also mention that I think, you know, if you stand in a glass house, it's not a great place to throw stones. They really stand on a very transparent platform.

If they're going to start throwing stones at us, why, they're going to get return fire, and it's not going to be pretty for them.

HANNITY: Let's talk a little bit about your strategy post Florida. We're six days away from Florida, 13 days away from the all important Super Tuesday. What states coming out of Florida do think you're most likely to be focused on, governor?

ROMNEY: I'm probably not going to tell you that exactly, because I'd have to shoot you if I did. I mean, I don't want my competitors to know exactly where I'm going next.

HANNITY: Governor Schwarzenegger is a friend of mine so I want to...

COLMES: Just don't aim to the left when you start shooting. That's all I'm asking. Governor let me ask you —

ROMNEY: When I start shooting, you're still safe.

COLMES: You talk about wanting to run a campaign on the issues, but did you not just smear the Clintons when you said they were both transparent and vicious? Is that not a smear? Against your potential candidate?

ROMNEY: I think it's a pretty accurate assessment of how some of their campaigns have been run, and I certainly hope that as we — if they're the nominee and if I'm the nominee, that we — find a way to have a debate about issues and not to make it about personal attacks. I just watched what happened with the Obama/Clinton exchange. It's already going downhill. I hope we can avoid some of that.

COLMES: Are they vicious?

ROMNEY: Well, they certainly have shown that in the past. I certainly hope they don't show that in the general election, but there's no question but that in circumstances where a lot is at stake, they've been willing to — well, frankly, to make sure that no holds are barred.

COLMES: Well I want to show you something that you said at the CPAC Convention back in 2007 about — you want people to only speak English and then I'm going to show an ad that you just put out. Here we go.

(BEGIN VIDEO CLIP)

ROMNEY: We strengthen the American people by securing our borders and by insisting that the children who come here legally to this country are taught in English.

(SPANISH)

(END VIDEO CLIP)

COLMES: That's pretty good Spanish on your part, I think, for a guy who wants people only to speak English.

ROMNEY: Well, actually, you know, words have meaning still, Alan. And, as you heard in my speech, I said that kids who come to this country should be taught in English in their schools, and that's what we fought for in Massachusetts, because I believe to be successful in this country, you need to speak the language of this country. At the same time, we have a number of people who are not kids when they come here, and they get in line for English As a Second Language courses. And in my state, the line was multiple years long.

They waited and waited to be able to learn English. I kept try to ask for more funding for our community colleges to teach English as second language. But the truth is, a lot of people I want to have vote for me don't yet speak fluent English. I'd like to change that and give them that opportunity. But I'm certainly going to advertise to everybody in this country who I think would consider giving me a vote, and that certainly includes Hispanic-Americans.

COLMES: Earlier today, you were asked a question in another interview how you differ from Ronald Reagan, and you said you want to focus on how you're alike, now how you differ. But how do you differ from President Bush, and how would a Romney presidency be different than a Bush presidency?

ROMNEY: You know, I think I'm going to let other people make that analysis. Each person is different. They have their own perspectives. The things I would do would probably be done in a different way than with the current president, and I'm not saying mine is a better way. We're just very different people in a number of respects. I respect what he's done. He's kept us safe these last six years.

I respect the fact that he put in place No Child Left Behind. I know a lot of people in my party don't like it, but I do like it. I'd like to give states more flexibility in applying it, but I like the fact that we test our kids. There are a number of things I like about what he did. There's some things that I'm — I take exception with. I think the Medicare Part D program should have been part of a broader Medicare reform program, and so that for me was something which I was concerned about. It added a multi-trillion dollar obligation to the balance sheet of our country. That gives me concern.

So, some things I agree with, some things I disagree with. But one thing I can tell you, this is a man who acts out of a desire to help America. I don't question that for a minute.

COLMES: Thank you very much, governor, appreciate your coming on with us.

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

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