This is a rush transcript from "Hannity & Colmes," November 24, 2008. This copy may not be in its final form and may be updated.

ALAN COLMES, CO-HOST: Republicans suffered big setbacks on November 4, but according to one prominent member of the party, it wasn't conservative values that voters rejected, but the politicians themselves. South Carolina Governor Mark Sanford believes he knows how to get the party back on track.

Joining us now is one of the rising stars of the Republican Party, South Carolina Governor Mark Sanford.

Hey, Governor, any trips to Iowa planned any time soon?

GOV. MARK SANFORD (R), SOUTH CAROLINA: No, you're safe.

Video: Watch Sean and Alan's interview with Governor Mark Sanford

COLMES: I'm not in Iowa. I'm fine. I'm — you know, there are a number of politicians already making their way. I'm just wondering if you're kind of looking at that state as a nesting ground over the next few months.

SANFORD: No, I'm nested right here in South Carolina.

COLMES: OK. I got it. You said America has turned away, not from conservatives, but those who faked conservatism. One of the people you mentioned when you wrote that was Ted Stevens. Who else?

SANFORD: Well, I just think that he's a poster child, if you will, for the larger notion of Republican Party gone bad.

I think that the fundamentals of the Republican Party, what it was originally built on, which is this larger notion of conservatism and individual liberty, is what's key to the party and key to going back to in the party.

think what went wrong with the Ted Stevens model, if you want to call it that, was here was a guy who didn't talk about less in the way of taxes or less in the way of spending but simply more that he could bring home for his state like bridges to nowhere in Alaska. And he stayed so long that he became ethically blind, had some real problems. Had a lot to do with them doing it (ph).

COLMES: Who else faked conservatism? Did George Bush fake conservatism by buying out companies, bailout plan, billions of taxpayer dollars to go to private companies? Is that — that's not real conservatism, right?

SANFORD: I would say that there are a lot of people in the party that had questions about some of the things, like the prescription drug plan, others that were big advances, big growth in government. And this notion of compassionate conservatism to some people meant being all things to all people.

I think the real question, though, is not where we've been as a party, but where are we going to go? And if you look at the Bobby Jindals of the world, who's the governor of Louisiana, or Rick Perry in Texas or Mitch Daniels up in Indiana, there are a lot of governors and a lot of folks at the precinct level, at the county level, who are working very hard to bring back the — the conservatism in Republican Party.

In other words, the problem with the party is in many cases they ran on one theme but governed on something else. And that notion of not walking the walk in the world of politics, I think, can be deadly, as we've seen a couple Tuesdays ago.

COLMES: Who else would you put in that category? What other names would you add as the future of the party? Sarah Palin, for example?

SANFORD: Certainly, she's among the mix. You know, I think it's a broad swath. It literally goes from Jim Douglas, who won in the most blue of blue states there in Vermont come Tuesday, a couple Tuesdays ago or, indeed, somebody who's like a young rising star like Bobby Jindal.

It is somebody like Sonny Purdue there in Georgia, who's been working on a lot of neat reforms. It's a broad swath of different folks.

HANNITY: I agree with you, Governor. It's good to see you. Thank you for coming back to the program.

I agree with your assessment. I think the Republicans ran one way, and — and they ran as conservatives. I even think Barack Obama adopted some of that conservative language in his own campaign, but they govern differently.

They — they were not the party of fiscal responsibility, members of Congress. They were the party of national security, I think.

My top five are this. You tell me where I'm wrong. Party of national security, party of fiscal responsibility, party of energy independence, party of free-market solutions for health care, education, and other issues, and the party of freedom, liberty, and the American dream. Good starting five?

SANFORD: It's a good starting five, but if you get one of those five right and the other four wrong in the world of politics, that's a deadly spot to be in. In large part, it describes where the party has been of late.

HANNITY: Explain that.

SANFORD: I think indeed, you're right. The Republican Party was the party of national security, but I think they failed the test on fiscal responsibility. I think they failed the test in many cases on market options versus not. I can't remember what the other two were that you threw out...

HANNITY: And energy independence...

SANFORD: ... listing them in my head.

HANNITY: Energy independence, I think they got later, late this summer.

SANFORD: Yes, it took them long enough to get there.

HANNITY: And thought they came on board. And the rebel House Republicans stayed all summer. They didn't go on vacation when Nancy Pelosi shut down the cameras and lights and the gavel, slammed it down and walked away to sell her book that nobody bought. Oops, did I say that?

SANFORD: I wouldn't disagree with you there, but I think that, when you talk about late summer when the election's coming in November, it just gets to be very late in the game.

HANNITY: It's too late. And I think the biggest issue, though, in the minds of people is, you know what? Why can't the Republican Party promise — they won't sign any bills. They won't support any bills with earmarks. Why can't they start there, especially in light of Barack Obama's talking about, you know, billions, hundreds and hundreds and hundreds of billions and trillions of dollars in government bailouts? Why don't they oppose it and say, "We're not going to support this"? Would this be a good start?

SANFORD: I think it would be a fabulous start. Let me give you a little example of that. Here in South Carolina we had a guy who drove a stock down from about 30-something down to about 4. His reward for that was an $18 million payout. He was to get paid out at the end of the year.

They moved the payout so that they could then be eligible for the bailout money, for $300 million worth of bailout money, there at this local bank. There are so many things that absolutely gall the taxpayer out there.

HANNITY: We...

SANFORD: And you're exactly right. That would be a great place to start.

HANNITY: Governor, thanks for being with us. Appreciate it.

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