This is a rush transcript from "Hannity & Colmes," April 17, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

CHARLIE GIBSON, ABC NEWS: Talking to a closed-door fundraiser in San Francisco ten days ago, you got talking in California about small-town Pennsylvanians who have had tough economic times in recent years, and you said they get bitter.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Well, I think there's no doubt how I can see people were offended. It's not the first time that I've made, you know, a statement that was mangled up. It's not going to be the last.

(END VIDEO CLIP)

ALAN COLMES, CO-HOST: That was Barack Obama, once again defending his small-town America remarks. We took our cameras to small-town Pennsylvania to see the effects of Obama's "bitter" comment. Let's take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It has nothing to do with being bitter or upset.

UNIDENTIFIED MALE: It's a good way of life. I don't regret it at all. I'm not bitter.

UNIDENTIFIED MALE: What do you think of Senator Obama?

Watch Newt Gingrich react to Obama's 'bitter' comments on rural Penn.: Part 1 | Part 2

UNIDENTIFIED MALE: I don't like him. I'll tell him to his face. I'd love to do that.

UNIDENTIFIED MALE: He just doesn't understand small-town and middle America. We cling to our guns. We cling to our faith. But for no other reason. It's like the greatest thing to do. You know?

(END VIDEO CLIP)

COLMES: By the way, more of those interviews will be on "Hannity's America" this Sunday at 9 Eastern, and we are joined live from Drew University by the best-selling author of "Real Change," former speaker of the House, Newt Gingrich.

Mr. Speaker, welcome back. You know...

NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: Good to be with you.

COLMES: ... if you were a candidate — in fact, there was some talk at one point that you might have been — how would you like it if you were continually asked about who your Pastor was, who you knew 40 years ago, some comment you may have made that maybe you — you inartfully phrased? Would you — would you like being in that position?

GINGRICH: Well, if you're going to run for president, you have to expect that it's going to be scrutinized very, very intensely. You're asking people to loan you four years of the most powerful political governmental job in the world, and every president we've ever had has had that kind of treatment, including George Washington. So I think it doesn't do very well to whine about it.

The fact is, Senator Obama spent 20 years listening to Reverend Wright and, in fact, gave $27,000 last year to that church, if I read the income tax statement correctly yesterday. Senator Obama had meetings with an American terrorist who had bombed people and who said as late as 2001 he'd wished he'd had more bombs. Senator Obama went to San Francisco and said something which I thought was more revealing about him than it was about Pennsylvania.

As you know, Alan, I was born in Harrisburg. I lived in Hummelstown and Middletown and Royalton. I have relatives in places like Milroy and Lewistown. None of whom, I think, believe in God because they're bitter or believe in the right to bear arms because they're bitter or go deer hunting because they're bitter. I just don't think he gets it.

COLMES: Well, the other part of the story about Obama's life, though, is he grew up in Kansas. Jeremiah Wright, who's being criticized right now, is the man who helped him find Jesus Christ.

Obama is from middle America, has a white mother from Kansas. The fact of the matter is that that's who he is, too. We want to define somebody in one word or two words, or by one or two people who they know, and don't look at the totality of who somebody is.

GINGRICH: Alan — Alan, he did not grow up in Kansas. He went to the most expensive prep school in Hawaii. He spent part of his childhood in Indonesia, and this is not bad.

Look, I think Senator Obama is a remarkably impressive person, who has run an amazing campaign and is probably going to be the Democratic nominee. He's a very formidable politician.

But he goes to the most expensive prep school in Hawaii. The closest he gets to a slum at that stage is Columbia University. He then goes to Harvard Law School and becomes the top-ranking person, editor of the law review. This guy has the perfect liberal elitist scorn for middle America.

SEAN HANNITY, CO-HOST: Mr. Speaker, welcome back to the program. I want to just correct one thing here. This spin — I find it remarkable that some people would buy into this "Oh, I was 8 years old when he bombed the Pentagon, the Capitol, and New York City police headquarters." That's not the issue.

This is an unrepentant terrorist in 2001 and 2008 that he has, quote — I'll use his spokesman's words — "a friendly relationship," that he gives speeches with. I wouldn't shake William Ayers' hand, and I doubt most Americans would.

GINGRICH: Well, I think this whole thing is why Senator Obama is slowly finding himself adding up more and more problems for the general election. It may not stop him from becoming the Democratic nominee because of the left-wing of the Democratic Party is so powerful a part of that nominating process.

But the fact is he can't really explain 20 years of listening to Reverend Wright. He can't — I thought — I happened to be at the White House with 13,000 other people when the pope came yesterday. And I thought the pope's final words, "God bless America," were a remarkable difference from the words we've heard from Jeremiah Wright.

And I think that there's — there is a fundamental difference here in world views. And I think the fact is that Senator Obama was comfortable with somebody who had been a terrorist and who had bombed American government buildings. Senator Obama is comfortable in San Francisco, treating with scorn the people of small-town America, and it's almost like there are two Obamas. There's Obama the rock star performer who's disciplined, optimistic, inclusive, and then there's this other Obama who is a very, very different person.

HANNITY: Well, I think you're talking about a lot of different things here. You're basically saying for the better part of the year the news media in America has failed us, because they failed to do the — their due diligence and investigate somebody who would be the president of the United States.

And they covered the rock star speeches. And they covered the chanting, "Yes, we can," and "change, change, change." And they covered the fainting, but they never did any scrutiny as it relates to the background of Barack Obama. And when questioned yesterday for the first time, now they attack George Stephanopoulos and Charlie Gibson. I'm wondering why it took a year. Aren't you?

GINGRICH: Sure, well look. When you take as another example something which I think has been on your radio show, the fact that Senator Obama participated in Farrakhan's...

HANNITY: Million Man...

GINGRICH: ... Million Man March. Now think about this. Now here's a guy who participates in Farrakhan's march, hangs out with a known, explicit terrorist who has bombed American government buildings, and didn't hear his preacher for 20 years condemn America.

COLMES: Does that mean that anybody at that Million Man March could be able to run for president?

HANNITY: He's an anti-Semite and a racist.

COLMES: No one who went to that March should be able to run for president?

HANNITY: He's an anti-Semite and...

GINGRICH: Alan, I didn't say that. What I said, Alan, is there's a pattern beginning to build here.

COLMES: All right. We're going to continue with the speaker in just a moment.

(COMMERCIAL BREAK)

HANNITY: And we continue now with former speaker of the House, Newt Gingrich.

Mr. Speaker, it's a question I was asking earlier in the program, and that is the narrative shifting. The most liberal senator, his comments in San Francisco, his wife's comments, his associations and, oh, he really didn't have knowledge of Reverend Wright. Now it's Bill Ayers. He won't criticize Carter originally when he was meeting with Hamas.

The whole — it seems that the image, the perception has changed dramatically. Could he change perception? Can he recapture what he once had?

GINGRICH: Well, he's a great performer, and he's been very charismatic and very articulate, and he's very, very smart, so I won't say he can't. But I think part of what's happened, maybe starting with the Reverend Jeremiah Wright videos, is that for a very long time nobody could ask any tough questions and it was somehow inappropriate to treat Senator Obama as though he was like any other presidential candidate. He was somehow on a pedestal, and he was different.

Now he's just one more politician, and a number of his answers just don't sound very accurate or very candid.

And I thought in last night's debate there was a kind of weakness, where he was — if you watched him, he sort of lost energy when he was asked about some of these tough questions. And I think — and we've talked about this before. If this keeps developing, and there are more and more revelations, and we learn more and more things, I think at some point it gets harder and harder to justify his candidacy.

HANNITY: What should be the strategy of Senator McCain as it relates to all of these issues?

GINGRICH: I think he should go to Mexico, and he should go to Latin America. I think he should go to Asia. I think he should be presidential, and I think he should do the things that are necessary, and let — for the next six weeks don't stop Senator Clinton and Senator Obama from continuing to describe each other vividly.

I mean, Senator McCain was, I think, the big winner. You may have been. I saw that one article. But Senator McCain, among the three candidates, was the big winner in last night in the debate, and I don't think he needs to get in the middle of this. He should be out, be positive, talk about real change, talk about what he would do different, but feel and be positive and presidential.

COLMES: Mr. Speaker, I'd like to point out that Obama said he had, quote, unquote, "a fundamental disagreement" with Carter on meeting with Hamas.

In terms of the most liberal senator, he was — by the National Journal called liberal by doing things like voting to implement the 9/11 Commission's recommendations, health care for kids. This is the kind of stuff that the National Journal is calling the most liberal.

They did the same thing for John Kerry four years ago. So when you look, really, further into some of the things you're talking about, I don't see a problem for Obama once they're explained in context.

GINGRICH: OK. So explain it in context, Alan. Where would you put him? Fifth most liberal, sixth most liberal?

COLMES: First of all, I don't — you like to — conservatives do this every time there's a nominee. Liberal, liberal, liberal and make it into a dirty word. I'm proud to be a liberal. And I think liberals ought to stand up and say...

HANNITY: But that's the problem.

COLMES: But you know — I have a lot of problems, but that's a whole other show. But you know what? We've got to stop running from liberal and you guys want to put it around his neck like a noose and...

GINGRICH: I hope Senator Obama...

COLMES: There's nothing wrong with being liberal.

GINGRICH: Now I hope Senator Obama follows your advice, stands up at the Democratic convention and, like Walter Mondale in 1984 when he promised us a tax increase, I hope Senator Obama says, "I will appoint liberal judges. I will appoint liberal cabinets. I will adopt liberal policies. Please vote for me, because I'm a happy, optimistic, cheerful liberal."

COLMES: It's funny, because on your side, you know, everybody gets up and says conservative, conservative, conservative. They go to CPAC. Mitt Romney becomes a conservative all of a sudden. They stand up and they talk. You can't be conservative enough. And you do a very good job of, you know, demonizing the "L" word as if it's some terrible thing to do.

HANNITY: Well

GINGRICH: Well, look, if you're for higher taxes, left-wing judges, and a more secular America...

COLMES: ... liberal is. That's not higher taxes. Democrats have said they would not — they would rescind the Bush tax cuts for the top 2 percent of the population.

HANNITY: There's no hope. There's no hope.

COLMES: You misrepresent — you misrepresent what liberals stand for. And what Democrats stand for.

GINGRICH: Wait a second. He said he was willing to raise the capital gains tax to 25 percent.

COLMES: Well, maybe if he — they're responsible economically like Bill Clinton who actually left a surplus.

HANNITY: Oh, here we go.

COLMES: Actually paid for the war that's costing over $1 billion a week. Or otherwise, our grandkids will have to pay for it.

GINGRICH: We'll pick up that balanced budget.

COLMES: We'll do that another time. Thank you, Mr. Speaker. Frank Luntz has a group of undecided Democratic voters to react to last night's debate when we get back.

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