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Exclusive: Sen. John McCain and Gov. Sarah Palin on 'Hannity & Colmes'

This is a rush transcript from "Hannity & Colmes," October 8, 2008. This copy may not be in its final form and may be updated.

SEAN HANNITY, CO-HOST: We get right to our top story tonight. Earlier today I sat down with Senator McCain and Governor Palin on the campaign trail at the headquarters of Lutron Electronics in Coopersburg, Pennsylvania.

Let's take a look.

(BEGIN VIDEOTAPE)

HANNITY: You just came off your debate last night, Senator — and you just came off your debate last Thursday, do you critique each other? Do you give each other advice?

SEN. JOHN MCCAIN (R), PRESIDENTIAL NOMINEE: Well, the only advice we give each other is to have fun — two words. And we talk before the debates and just — have fun. And it was obvious that certainly Sarah was having fun at her debate, and I was trying to have fun at mine. And I think we did.

HANNITY: You did have fun? Was there a moment maybe before the debate where you're nervous, you begin to feel the pressure? It ended up being like 70-some odd million people, we don't know the numbers from last night watching the debate. Is that rolling through your head, or are just focused on what the mission is?

GOV. SARAH PALIN, (R), VICE PRESIDENTIAL NOMINEE: Just focusing on the mission. And it was helpful though that you called me right beforehand, and you said those two words — you said —

MCCAIN: Have fun.

PALIN: — have fun.

HANNITY: No pressure — but while I have you both together, I want to talk about — Governor, we discussed that you two had discussed the role that Governor Palin would play in the McCain administration.

Part 1: John McCain and Sarah Palin talk with Sean Hannity about their debate strategy and energy plan

Part 2: GOP ticket blasts Obama's positions on foreign policy and taxes

Part 3: McCain, Palin question Obama's track record with Bill Ayers and ACORN

Part 4: GOP ticket discusses their growing relationship and 'underdog' role in election

Part 5: McCain, Palin address flaws in Obama's approach to national security issues

Between the two of you, Senator let's start with you, tell us what do you envision for the governor, as her role?

MCCAIN: Well, first of all she's probably one of the foremost experts in this nation on energy issues. She was responsible for — to make a long story short — a pipeline, the $40 billion pipeline bringing natural gas from Alaska down to the lower 48. She has been involved in these issues of energy in many unique ways, including being on the board that oversights (sic) the natural gas and oil resources, and other resources in the state of Alaska. And so I think that there's nobody more qualified to take on our mission of becoming energy independent.

Second, obviously, she has been a great reformer. I still don't think a lot of Americans appreciate what it's like for a Republican to take on an incumbent sitting governor of your own party. It almost never happens. They wait until they retire or whatever it is — so it's clear that she's got a great record of reform.

And finally, you know those special needs families, I — you know, after a debate you always kind of wish you had said something. And one thing that I wanted to say was that — in our town hall meetings we have lots of families show up with children that have autism, and other special needs families. Obviously Sarah Palin wants to take on that task of helping relieve the burden, find what's causing autism, find a cure for it.

And so I think that those responsibilities, not only would I like for her to do, but she's uniquely qualified to do.

HANNITY: And on top of all the other responsibilities of being vice president — and that means national security, and all the other issues —

MCCAIN: Can I just say one more thing?

HANNITY: You can do whatever you want.

MCCAIN: Energy is national security. Security — national security is energy. If you don't become independent of foreign oil you're going to have greater national security —

(CROSSTALK)

HANNITY: ... said I can have you two debate among yourselves on this one point. Governor Palin you have said that you're trying, you're working on Senator McCain on the issue of ANWR. And you said you haven't had success yet, but you're still trying.

PALIN: The important thing to remember, though, is that we're on the same page in understanding that it has to be an all of the above approach in dealing with the energy crisis that we are in. It's got to be the alternative sources of energy getting plugged into the solution here. Certainly, the domestic supplies of conventional sources also being tapped into, and then we've got to remind Americans that the effort has got to be even greater today toward conservation because these finite resources that we're dealing with obviously — once oil is gone it's gone, once gas is gone, it's gone. And I think our nation has really become kind of spoiled in that arena.

So it's an all of the above approach that he embraces, and that's good. That will lead us to that energy independence, as opposed to the other ticket where they have said, no, no, no, to every domestic solution that has been proposed. And that was kind of perplexing st night, listening to Barack Obama's position, all of a sudden saying that we need clean coal and we need to offshore — he's so on record as having opposed, and Senator Biden also, having opposed those.

So, I think last night, coming away from the debate, too, one of the things that I got out of it was, I think Barack Obama was drilling for votes. I don't think that he's too keen on drilling for those source of energy that we need.

HANNITY: Well you had pointed out about Governor Biden (sic) — had once said, (INAUDIBLE) the world is raping the outer continental shell, proponents of drilling, and — but last night you brought up the fact that Senator Obama was against nuclear energy.

MCCAIN: We have to develop the technology — go to the United States Navy — we're sailing ships with nuclear power. You visit the French ,the British, the Japanese, they all reprocess spent nuclear fuel. But Senator Obama has done — he's very good with words. He's very eloquent. But when you look past it, he has opposed offshore drilling and he has opposed nuclear power.

Again, one of the things I was trying to stress in the campaign and in the debate last night, look at the gap between his rhetoric and his record.

The most liberal senator in the United States Senate: that's why I urged the people watching last night, go to these Web sites, the National Taxpayers Union, Citizens Against Government Waste, and these other watchdog organizations.

Finally, this may sound a bit gratuitous, but at least because Senator — Governor Palin — Sarah Palin is so persuasive, I would like to come to Alaska, I haven't been there in many years anyway, and maybe I'll agree to go visit that area and have a look.

(CROSSTALK)

HANNITY: Are you going to take him moose hunting?

PALIN: Yes, let's do that too, while we're at it.

HANNITY: Would you do that, Senator?

MCCAIN: Have some fish, you know, but moose hunting is fine.

(END VIDEOTAPE)

ALAN COLMES, CO-HOST: Coming up, does John McCain think Barack Obama has the experience to lead this country? Sean pressed him on that and found out why it's not Obama's experience that McCain is worried about. More of Sean's exclusive sit-down.

(COMMERCIAL BREAK)

COLMES: We now continue with Sean's exclusive sit-down with Senator John McCain and Governor Sarah Palin.

(BEGIN VIDEOTAPE)

HANNITY: Well, this came up last night. And this came up in your debate here. You used the line last night, which interestingly, was a line that Senator Biden used about Senator Obama back when they were debating. And that is the presidency does not lend itself to on-the-job training.

And that raises the question — I mean, because it seems to me a narrative has emerged, you know, the same lines that were used in the first debate by Senator Obama were used by Joe Biden in the second debate, were used by Senator Obama in the third debate.

Do you really believe that Senator Obama is prepared to be president of the United States? Does he have the experience?

MCCAIN: I don't. But I'll let the American people make a judgment in just 28 days. But I think he lacks the experience and the knowledge, and most importantly, the judgment that he has displayed.

The judgment that he displayed over his comments when Russia committed aggression against Georgia, and his failure, as I mentioned last night, to acknowledge that he was wrong about the surge.

He is — in my view, does not have the judgment necessary to lead this country in very difficult times. And his record is replete with those misjudgments, whether it be his comments about — in Afghanistan, all Americans are doing is bombing villages and killing innocent civilians.

HANNITY: That quote is "air-raiding villages and killing civilians."

MCCAIN: "Air-raiding villages," I mean, that's so insulting to the men and women who are serving in the military. I think that he should at least retract that statement. But I think the important thing is his world view, his willingness to sit down with Ahmadinejad without precondition, or Hugo Chavez, or the Castro brothers, with precondition, giving them legitimacy, affirming their behavior and attitude towards their own people as well as towards us.

It shows a lack of knowledge and experience, and therefore, judgment.

HANNITY: Governor Palin, you had echoed those comments in recent days, this was immediately after the debate. And you actually — (INAUDIBLE) that Senator McCain just mentioned, "air-raiding villages and killing civilians," you said that that should disqualify him, meaning Barack Obama, from being commander-in-chief.

PALIN: Because there is such a gross misunderstanding of what our U.S. troops are doing in Afghanistan. What they're doing, of course, is fighting terrorism and protecting us, protecting our country.

And you know, they're building schools for the children in Afghanistan so that there is hope and opportunity there. So that just — that gross misunderstanding of what the United States military's mission is right now is very, very concerning.

MCCAIN: Could I mention one other point on his record?

HANNITY: Yes, sir.

MCCAIN: Senator Obama said that he would never vote to cut off the funding of American troops in Iraq and Afghanistan. After promising that, he and a handful of others voted that way. Now both he and Senator Biden said, well, it's the same vote that I cast. I cast a vote against withdrawal and surrender.

And I had promised that I do everything that I could to fight against any resolution that would entail withdrawal — set dates for withdrawal and therefore defeat in Iraq. So they're vastly different votes, they're vastly different.

HANNITY: Well, and Senator Biden had actually criticized him and said if you vote to cut off the funding...

(CROSSTALK)

HANNITY: Well, he said lives would be lost.

MCCAIN: Yes. And has also said that Senator Obama took a quote "political vote." I agree with Senator Biden.

HANNITY: One of the things that keeps coming up is the economy, the economy. And maybe both of you can answer this question because it came up in your two debates and your one debate, 95 percent of the American people are not going to see their taxes go up.

You spent a lot of time in your debate dealing with that. You spent a lot of time in your debate dealing with that. Is that honest? Is that truthful?

MCCAIN: Well, first of all, it's not truthful in the respect that 50 percent or 40 percent of the American people — of taxpayers — American citizens don't pay taxes, federal income taxes. So right there, that obviously is wrong. And maybe that means that he just wants to give them a check. But I don't know if you could interpret that as a quote "tax cut."

But more importantly, Senator Obama didn't tell, nor did he deny last night, that his plan raises taxes on small business income. Small business created 300,000 jobs last year. We've lost this — so far this year, we've lost 700,000 and some jobs. Small business has created some 300,000 jobs.

Eight-four percent of employees, workers in America are employed by small business. And he wants to tax 50 percent of small business income. That kills jobs. That keeps people from hiring.

So with Senator Obama's rhetoric, you always have to, one, look at the rhetoric, and two, look at the fine print.

HANNITY: Do you think that — and I'll ask you, Governor Palin, this, do you think — for example, both of you have brought up the fact in two of the debates that he keeps saying — you have made a point, well, wait a minute, you raised taxes 94 times, you had only been in the Senate a short period of time, and you voted to raise taxes on people making $42,000 a year and now you're saying that — no, that's not going to happen for 95 percent of the people.

So is this just something — is this a misnomer? Is this, you know, campaign rhetoric? Is he being dishonest, just not truthful with the American people?

PALIN: Voters have got to go to someone's record and see what they have proven already in terms of what they're capable of doing in the future, 94 times being on the wrong side of the American people in voting for higher taxes.

And then he proposing to spend now nearly a trillion dollars in new government growth. He doesn't explain how he is going to get the money to pay for that also. And then too, these three years in the Senate that nearly $1 million a day in his own requests in earmarks for government to spend it.

That's somebody's record. I mean, you know, it shouldn't be controversial, it shouldn't hurt anybody's feelings or anything else. But these types of issues are brought up as somebody — it's somebody's record.

Now, that's as opposed to John McCain's record and my record where we have truly — that track record that shows the reform, the desire to and the success in putting government back on the side of the people, our small businesses and our families.

MCCAIN: And one additional point.

HANNITY: Sure.

MCCAIN: When he ran for this — for the United States Senate, he said he supported a middle income, working family's tax cuts. He never introduced a single piece of legislation to implement that. And instead, he voted 94 times to either increase people's taxes, or against tax cuts and — voted for a resolution which called for taxing individuals who make as low as $42,000 a year. Again, look at the record.

HANNITY: Now you brought up in your debate, Senator, that since the time you've been in Senate, about — I think you said a $1 million of pork a day —

MCCAIN: Roughly.

HANNITY: Roughly. Joe Biden, last year, I think it was $120 million in pork barrels that he brought back to the state of Delaware. Both of them were — pretty much dismissive (ph) and say that's not that much money. Is that —

MCCAIN: The fascinating thing is when he says it's only $18 billion. Now, it's a lot more than that. $18 billion — anybody but an inside the beltway pork barreler would think it's not a lot of money. And you know the other thing that they keep not talking about, Sean, is the corrupting influence.

Now, Fannie Mae and Freddie Mac — we blew the whistle two years ago, a bunch of us. And Fannie and Freddie — with campaign contributions to the same kind of system — were basically gaining and purchasing influence so that the Democrats were fighting back against any real regulation and bringing under control what a lot of us said was going to be a train wreck. That's the pernicious part.

(END VIDEOTAPE)

HANNITY: And coming up Governor Palin has been hitting Obama hard on the campaign trail over his ties to the unrepentant terrorist Bill Ayers.

(COMMERCIAL BREAK)

HANNITY: And we now continue with more of my exclusive interview with Senator John McCain and Governor Sarah Palin.

(BEGIN VIDEOTAPE)

HANNITY: Governor, you in the last couple of days, this past Saturday, The New York Times came out with an article about the relationship between Senator Obama and a man by the name of Bill Ayers. Bill Ayers takes credit for — of all days — in The New York Times, September 11th 2001 says, I don't regret setting bombs, I wish we did more. A man who admits to bombing the Pentagon, the Capitol, New York City police headquarters, whose motto was — get all the rich people, break their cars and houses, and go home and kill your parents. How big — we expected this would come up last night in the debate. It did not. What — what more do you want to know about this relationship? What does it tell you about Barack Obama?

PALIN: Tells me again we need to question his judgment. And — not only those terrorist activities that Bill Ayers was involved in, but the questions need to be asked, I believe, when did Barack Obama know of these activities? We've heard so many confliction stories, and flip-flop answers about when he knew the guy, did he realize that he knocked off his political career in the guy's living room?

First it was yes, and then it was no. It comes down to again, judgment and truthfulness and a candidate's character.

HANNITY: Well we know — we know that he did kick off his political career —

PALIN: Right.

HANNITY: — in his house. The year was '95. You know they sat on multiple boards together. We know they've given speeches together. We know there's been sort of a back and forth financially. Ayers contributing to Obama, Obama sort of working some money back through them.

What questions, Senator, would you like answered as it relates to this relationship? And do you think the American people should care about this?

MCCAIN: I think they should care about Senator Obama's truthfulness. I don't care much about an old terrorist and his wife who are still unrepentant. By the way, she was as much or more active than Mr.Ayers was.

But the point is, it's not about them. It's about Senator Obama being candid and straight forward with the American people about their relationship. He has dismissed it by saying he was just a guy in the neighborhood. You know it's much more than that. Let's reveal all the details of that relationship and then the American people can make a judgment.

HANNITY: But here's a question — his answer is, well, I hardly knew him. I was 8-years-old when he committed these — quote — "despicable acts." That's his answer.

But he was in his 30s and 40s when he sat on a board with him —

(CROSSTALK)

HANNITY: — and was in living room. And I guess my question is, should the American people be concerned that he's capable in a post-9/11 world of fighting terrorism, when he is friends with an unrepentant terrorist?

MCCAIN: Well, I think that's also part of the judgment the American people make. But first, I think we ought to have a full and complete examination of the relationship. And then the American people can make a judgment. And so far, I think it's very clear that he was a lot more than just a guy in the neighbor.

HANNITY: You think this needs to be asked more in your next debate? Do you think it should have — because a lot of us in the media are sitting back thinking — because of The New York Times and because of your comments, Governor — that this is something that needs to be vetted out.

MCCAIN: Well I hope it's vetted out, if it needs to be vetted out. And I think the American people understand whether Senator Obama has been truthful and candidate about his entire relationship with Mr.Ayers, and with others very frankly.

HANNITY: Let's talk about others.

MCCAIN: Including the ACORN organization.

HANNITY: Well, we've got — this is now part of a larger narrative that's emerging. And the Obama campaign seems very, very defensive about this. They don't want any questions, how dare you ask, this is unfair. But he's friends with Father Pfleger, a radical — fairly radical figure in Chicago, Tony Rezko, a convicted slumlord, we have him on tape. And we know that he spent 20 years in the pews of Reverend Wright, who has said the most outrageous things, including G.D. America and "America's chickens have come home to roost" after 9/11.

What does that tell you, Governor, about Senator Obama and his radical associations?

PALIN: It goes right back again to the candidate's judgment and who he chooses to associate himself with in the past, perhaps the present. It makes me question who he would associate himself with in the future.

HANNITY: Yes. And we should — Americans should be concerned about it.

PALIN: I'm concerned about it.

HANNITY: In what way?

PALIN: Concerned about it because, again, somebody's track record says so much about who they are and where they want to lead this country.

(END VIDEOTAPE)

COLMES: And coming up, more of Sean's exclusive interview. McCain and Palin explain why they're happy and comfortable to be the role of the underdog.

(COMMERCIAL BREAK)

COLMES: We continue with Sean's exclusive interview with Senator John McCain and Governor Sarah Palin.

(BEGIN VIDEOTAPE)

HANNITY: Senator, your life story is you spent five-and-a-half years in the Hanoi Hilton. I think what I read, almost every bone in your body has been broken. And you've been tortured. And by the way, one of the reasons you don't use the computer, they ran that ad, is because of your war injuries.

And you cannot lift your arms above your shoulders...

MCCAIN: Yes, I can do better than that.

(LAUGHTER)

HANNITY: But think of how this war has been politicized through the prism of your experience in Vietnam. The leader in the Senate, Harry Reid, said, "the surge has failed, the war is lost." Dick Durbin compared our troops to Nazis. John Kerry said our troops are invading Iraqis homes in the dark of night, you know, terrorizing women and children.

There are verbatim quotes. And Barack Obama said they are "air-raiding villages and killing civilians." My question is, you know, what does that — that's poisonous rhetoric, but it goes on, what does it mean? How do you stop that if you're elected president and vice president?

MCCAIN: Well, we'll show them victory. The American people understand what is at stake here. And the American people have rejected that. And a lot of voters will be making a judgment.

When the majority leader of the Senate declares the war lost, then a legitimate question is, who won? Al Qaeda? Who won? So these comments have been reminiscent in many ways to some of the rhetoric that was used during the Vietnam War that harmed our veterans so much, and harmed their ability to come all the way home.

Words matter. Words matter. And when Senator Harry Reid declares that the war is lost, well, our young Americans who are over there putting their lives on the line, it's not right.

HANNITY: All right. Last question. Tell us a little bit more about your relationship as it has grown. And I want the inside story about how you decided to ask Governor Palin and how that conversation — I've got you together, so I want both versions before we let you go.

MCCAIN: I really was looking for someone who could shake things up in Washington and reform. And very frankly, there are some very wonderful people out there that we had to consider.

But I saw this as a real breath of fresh air that would sweep across America, give people inspiration, which Sarah Palin has, which would excite our base. But most of all, that Americans could look forward to to reform the way we do business in Washington and restore trust and competence.

It's not an accident that Sarah Palin is the most popular governor in America. It's not an accident that she has given the people of Alaska, money back. That she has cut spending and that she's done the things that we need to translate to our nation's capital.

HANNITY: Governor, your side of the story. When did you really begin to realize that Senator McCain was seriously thinking about electing you as VP. And you said you wouldn't blink. But, as that process was — when did you think, this may happen?

PALIN: Oh, you know, really not until maybe we were face to face and I could look him in the eye and see the serious voice he will to offer this challenge to me, this responsibility that he asked that I could take on and of course, I was so happy to.

But, you for the years, I've been a big fan of his because of that independent (INAUDIBLE) that courses through your veins. And that's made me admire him. And I knew it was confirmation, it was right on that I was to support him when early on in the presidential race, he had said something in the newspaper that was controversial, imagine that, about what was going on in the administration. It was independent, is what he had used, the tone of his comments.

And I had been asked about it up in Alaska, by the local press and I said, oh no. It was spot on. You know? We don't need to keep going down that track, something that the administration was going on. And then I got a call from the Republican member of Congress who said, yes, I understand that you're thinking about supporting McCain. Well, let me tell you about the Hell he's put me through with earmark reform.

And I said, right on. That's confirmation. He is the guy that I'm going to support.

HANNITY: It's so (INAUDIBLE). You've got (INAUDIBLE) two points. A two point race today. You got hotline as a one point race today. CBS has it as a three point race and it's even tighter among likely voters.

Do you view yourselves as underdogs?

PALIN: It makes us work even harder. It does.

MCCAIN: We're the underdogs. She was an underdog when she took on a Republican incumbent governor.

(CROSSTALK)

(LAUGHTER)

MCCAIN: I was the underdog throughout the primaries.

HANNITY: That's true.

MCCAIN: You might recall, many declared our candidacy dead. We are glad to be in the underdog role here. It excites and motivates our supporters. It gives Independents another look at us and I'm very happy with where we are, Sean. I couldn't be happier.

(COMMERCIAL BREAK)

ALAN COLMES, CO-HOST: Welcome to "Hannity & Colmes". Getting right to our top story tonight. And it is more of Sean's exclusive interview with Senator McCain and Governor Palin. Take a look.

(BEGIN VIDEOTAPE)

SEAN HANNITY, CO-HOST: Let me go back to the issue of Barack Obama and national defense. Iran, Cuba, Venezuela are tiny countries and not a serious threat. And he also said, very specifically, that he would cut tens of billions of dollars in defense spending, cut investments in missile defense and slow the development of future combat systems.

This is your area of expertise, Senator, why would that not be a good plan?

JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: Well, again, I think that Senator Obama has had no experience with either national security, nor the specifics of how we can best defend this nation and secure a better future for our children and grandchildren.

And that, of course, means how we equip and how we train, and how we have an overall strategy. I don't think Senator Obama knows much about our defense system simply because he's never had any background on it but, more importantly, when he does not support the mission that General Petraeus outlined and that has succeeded and fails, absolute fails to recognize that he was wrong when he opposed the surge, said it wouldn't work, it would lead to increased in ethnic violence, et cetera, et cetera.

So you have to start from an overall strategy and then equip the military with the tools necessary to implement that strategy. He does not understand the strategy, either there or in Afghanistan.

And to sit down with those three dictators you talked about, the Castro brothers, Hugo Chavez, or Ahmadinejad, without preconditions, obviously, is incredibly naive approach to these challenges.

HANNITY: Both of you used the term "wave the white flag of surrender," we would have lost if he had his way.

PALIN: Um-huh. Barack Obama has not understood that — and I said this in my debate. You know, you don't have to believe me, the hockey mom from Alaska, proclaiming that the war on terror, a central front there, has been Iraq.

But, please, believe General Petraeus, an American hero. Please, unfortunately, you have got to believe even bin Laden, the terrorist who have claimed, too, that the war on terror, a central front there has been Iraq.

So to retreat from there and allow them to get back in there and build more strongholds is, I would say, beyond naive. And that is what Barack Obama has chosen his position.

HANNITY: You use the word dangerous...

SARAH PALIN, (R) VICE PRESIDENTIAL NOMINEE: Yes.

HANNITY: . in your date.

PALIN: Right.

HANNITY: Beyond naive, beyond irresponsible. Dangerous for the American people.

PALIN: Yes.

HANNITY: So if he's elected president, he's — he would be a dangerous president because of his judgment?

PALIN: I believe that if we were to withdraw.

HANNITY: Yes.

PALIN: . prematurely from Iraq, we put our country in danger.

HANNITY: Senator, do you agree with.

MCCAIN: Let me just tell you briefly.

HANNITY: Yes, please.

MCCAIN: . about there is really insightful about Senator Obama's attitude. When General Petraeus came back to testify the first time and the Democrats and some Republicans were doing everything they could to force a date for withdraw — this is about the period of time that Senator Obama voted against further funding of the troops in Afghanistan and Iraq.

Moveon.org, one of the base supporters of Senator Obama, ran a big ad in the "New York Times," that had a picture of General Petraeus. And the title underneath his picture was, "General Petraeus or General Betray Us."

You know, here's a guy that served his nation 35 years, a great — one of the great generals in American history and Senator — and Moveon.org runs an ad questioning his loyalty.

We were very unhappy, to say the least. So we proposed a resolution on the floor of the Senate, condemning that questioning of the loyalty and patriotism of a great American.

Senator Obama was in the Democratic cloak room. He refused to come out and vote. He refused to come out and vote to condemn that resolution just like in the state Senate of Illinois. He voted present 120 times.

In this case he didn't even come out of the cloak room to vote to condemn a direct attack on the loyalty of one of America's great leaders.

(END VIDEOTAPE)

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