This is a rush transcript from "Hannity," January 22, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: It's time for part two of my exclusive interview with nationally syndicated radio talk show host Rush Limbaugh.

(BEGIN VIDEOTAPE)

RUSH LIMBAUGH, TALK RADIO HOST: The Republican Party is making a big, big — the conservative movement, too — making a big, big mistake in planning for the future. You hear things like well, Republican Party needs to identify the middle class, the Wal-Mart voters, and come up with policies for them. And then we've got to come up with policies for the Hispanics because they hate us due to illegal immigration.

That's the way the Democrats do. You — put people into groups then you victimize them and give the victims power over the majority because they, they have grievances that are not existent that have been made up, and the majority gets cowed into fear because they don't want to be complained at. They don't want to be blamed, so OK, OK, whatever you want. You — want health care fine, go, go get it.

Video: Watch part 3 of Sean's exclusive I Part 4

What made this country great is the recognition by our founders that individuals are all created equal endowed with certain inalienable rights, life, liberty, pursuit of happiness. If you look at the Democrat Party, are they for life?

Folks, they're the party of abortion. Liberty? These are the people that are trying to pass any law they can to restrict where you can go, what you can do when you get there, where you can eat, what you can eat, what you can smoke, when you can't smoke, what kind of baby you can have, all these things.

Pursuit of happiness? I have yet to see a happy liberal.

(LAUGHTER)

LIMBAUGH: I have yet to see a happy Democrat. They are always angry about things. What we need to be doing is — Reagan, very simple, made the people of this country understand that its greatness is due to them. They are the ones that make the country work. Not policies, not laws, not committees and Congress and so forth and not cult heroes or personalities.

But individual freedom, people excelling, doing whatever they wish to whatever desire they wish to work, hard work, to become the best they can be. Self-interest is different than selfishness. People working to their own self-interest benefits the family, the neighborhood, the community, the state, city, the whole bit. And this is what, I think, the message that the Republican Party and conservatism has lost.

The blueprint for landslide electoral victory is right there and the Republican Party and the conservative movement has just flushed it away.

HANNITY: But I — I keep reading that guys like Rush Limbaugh and Sean Hannity and conservative Mark Levin, the great one, our friend, that we — we're taking the party, pulling the party way far to the right and that the real answer is to moderate, the David Brooks...

LIMBAUGH: Yes.

HANNITY: ... of the world.

LIMBAUGH: You know, I — I read those things and I — and I listen to these wizards of smart on our side going on these cable networks and say, yes, well, the problem is that Limbaugh and Hannity are moving the party too much to the right and Colin Powell says yes, the Republican Party stopped listening to Limbaugh.

Excuse me, we haven't pulled the party to the right at all. This party has gone to the left. It's gone to the center. We haven't done this. We — they got the candidate they wanted. I know Senator McCain is a friend of yours. They got the candidate they wanted. They got the campaign they wanted. And they lost huge.

And the reason they lost huge is because in a contest of group politics, the experts are going to always get group votes before the pretenders will. And we were pretenders trying to get the group. We got to get the Hispanics, we got to be moderate. We got to prove we can walk across the aisle, the era of Reagan is over.

I never hear Democrats talking about walking across the aisle. Never see any of them praise each other or brag about the fact that they do it. They brag about the Republicans that they destroy. They brag about the Republican bills, legislation that they defeat.

We have — the people that are running our party now have such a defeatist inferiority complex. They want to be accepted by people that hate them. They want to be accepted by people that despise them. Makes no sense to me.

HANNITY: What about all these — these so-called conservatives that met with Obama? Were you invited to that dinner?

LIMBAUGH: No, I wasn't. I wasn't.

(LAUGHTER)

HANNITY: I wasn't invited either.

But wait. Back to John McCain. I have always liked John McCain. I admire his life's story. He's not a conservative, Rush.

LIMBAUGH: Right.

HANNITY: They did get the candidate. The people that thought we — the Republican Party needs to moderate and move away from being the party of Reagan, they got the candidate they wanted. It didn't work out too well.

LIMBAUGH: No. The blueprint is there. Let me — here's what's going on in the Republican Party. And it's really not new. These people that we're talking about, the northeastern blue blood Rockefeller Country Club types, they didn't even like Reagan. They — Reagan was an embarrassment. They believe that he was the dunce, an amiable dunce.

But what it's about, Sean, is abortion. These northeastern moderate liberal Republican types all have wives. I know this is going to sound pedantic and simplistic. But I have experienced it and this is how I know it. These guys that we are talking — they are big-money people. They are contributors, donors, fundraisers, they are just embarrassed to be in the same party with people in the sigh of who are pro laugh and they go to NASCAR races and that's — that's at the heart of this.

They go to the convention, the Republican convention with these people they think are hicks and hay seeds. 24 million of them without whom they couldn't win. So it really is about that. They won't say so publicly. But it — and it's not just that. But that's a large part of it, the Obama — it's a great — if you have time for me to analyze.

HANNITY: We have plenty of time.

LIMBAUGH: Does anybody, anybody with even half a brain really believe that Barack Obama went to dinner with a bunch of conservatives to have his mind changed?

HANNITY: Good point.

LIMBAUGH: If he did, there are some genuine conservatives he could have talked to. He could have invited us. He could have gone to human events. He could have gone to some people at the Heritage Foundation. He doesn't want his mind changed. He is co-opting these people. He's bringing them in.

He wants the establishment media inside the beltway, punditry and so- called journalism, to be afraid to criticize him. I mean if he's broken bread with them and he's made them feel good about themselves, and given them an inside view of exactly who he is, it's going to be very difficult for these people to criticize him. I don't think for a minute that he cared to have his mind changed.

HANNITY: Mm-hmm.

LIMBAUGH: Would you?

HANNITY: No.

LIMBAUGH: Would you invite a bunch of liberals over to dinner at your house with the expressed purpose of having them change your mind? If you did it, you would, you would be trying to talk sense into them.

(END VIDEOTAPE)

(BREAK)

HANNITY: And continuing now with my exclusive interview with Rush Limbaugh.

(BEGIN VIDEOTAPE)

HANNITY: Let's say we have a $700 billion bailout, $850 billion is the stimulus number. Some Democrats want more than that. So there's a lot of money on the table here. Largest, you know, transfer of wealth and control to the government in the history of this country as you were pointing out earlier here.

If that is implemented, if he meets with rogue dictators, if he doesn't come out with moral clarity and back, say, Israel, if he doesn't stand up to Ahmadinejad which — this is all his statements, what happens in four years with an Obama presidency?

LIMBAUGH: Well, who can know? The — I do think that he is going to overreach. I think the Democrats are going to overreach. This thing that happened all day Sunday, the Wellstone Memorial on steroids.

(LAUGHTER)

HANNITY: Oh boy.

LIMBAUGH: And they overreached on that. I — I don't know that he's going to do all of those things. I think he is going to say he is going to do all those things. He's going to placate — I think he's going to face a whole different set of realities once he actually gets in the oval office and starts doing things.

But the financial stuff is done. We're looking at trillion-dollar deficit this year, even before a stimulus package. I don't know where we're getting the money for this. But this hasn't — I just, Sean, it wasn't six months ago that the Democrats were out ripping Bush for deficit spending. It was horrible. It was rotten.

Now, of course, the question is, can we spend it fast enough to save America? It's a bill of goods, and a lot is going to depend on how long the media sticks with this. I think they can't let him fail. And there are enough Americans who are simple sponges that watch news twice a week, believe what they see and are done with it.

The culture, we've lost the culture, Sean. We have lost pop culture. It is unrealistic to expect, the people watching MTV going to see the rot Hollywood is putting up. Listening to the rot music yesterday. Every four years they're going to go to voting booth and Republican or conservative.

And this is something that we haven't even addressed publicly in a — in an electoral way, strategic way. But that's going to have to be done as well. But if he's — if he's a big failure in reality, well, the media portrayed it that way.

HANNITY: At some point it's got to become him.

LIMBAUGH: The way to see to it, I have got arguments with people about this. To this day FDR is the hero.

HANNITY: It's true. It's a good point.

LIMBAUGH: And Hoover is the idiot. Hoover is the guy that broke the country. If the media wants to prop somebody up they will do so. Liberalism in the media a series of myths. One of the myths is that the Kennedys are smart. Caroline Kennedy, you know?

HANNITY: You know?

LIMBAUGH: You know?

(LAUGHTER)

HANNITY: You know?

LIMBAUGH: There's so many myths that liberalism is built on — that have to be covered. Liberalism cannot stand the or cannot deal with the light of truth being shined on it.

HANNITY: Let me, let me ask you this because we have Geithner, we have Eric Holder. We have Carol Browner. We have conflicts of interest with Hillary Clinton. Just where are the Republicans standing up, you know, to — any in the past. Anybody that had an illegal immigrant problem had to withdraw.

Geithner has an illegal immigrant problem and a tax cheat problem. If Rush Limbaugh doesn't pay his taxes why don't I doubt Harry Reid and Dick Durbin and Chuck Schumer are going to say, you know, Rush is a good guy, he made an honest mistake. Not going to happen.

LIMBAUGH: It's two sets of rules. The Democrat Party has never claimed to have standards. Only once in my memory have they claimed to have ethics and that's when Pelosi promised the most ethical Congress in 2006 after the elections.

If they actively promote no standards for themselves then how can they violate them? As far as the liberal media is concerned, Geithner is too important to fail. He's the only man who can fix it.

Hillary, ethics? What is this? There's no ethics violation. They — it's not possible for Democrats to create these. It's all under the rubric of Obama is too big to fail. People don't, people don't care about the only Democrat that, as you know, has got an ethical problem is Blagojevich. And that's only because he was foolish enough to be taped acting as Democrats do selling the Senate seat in — Illinois.

But I — I think it's a waste of time to focus on the Geithners. You have pointed out but, and you — we can point out the conflicts of Hillary. But it's not going to change voters' mind about, about who they are. The — there is two sets of rules. One for the dominant left and one for everybody else.

And Geithner, for example, you use — he is too important. He is the only guy that understands this. So these are just — this is everybody does. That's the constant excuse, everybody has sex with their intern. Everybody, you know, leaves the stain on the blue dress. Everybody does this.

HANNITY: Rush Limbaugh did it, it would be a different story.

Let me ask you about the outgoing president. I appreciate the fact that George W. Bush went for an NSA program, a patriot act, enhanced interrogations, used all his political capitals, sacrificed any public opinion approval numbers, and at the end of the day it reformed our national security, kept the country safe.

You don't hear a good word about him.

LIMBAUGH: No, you won't.

HANNITY: What are your thoughts about him? What are your thoughts?

LIMBAUGH: Well, I think he's — he's a decent man. He's a decent — he had a reverence for the office. That's why he didn't get partisan. He thought it was irreverent to turn the oval office or the office of the presidency into a partisan strategic battle place.

He just, he just didn't want to do it. He was content to let history be the judge. I think — I heard Rove say even on your network that they miscalculated on not firing back on some of these things often enough because of the president is the leader of this party and as such the leader of his troops.

And while he's being criticized to smithereens, everybody who voted for him is, at the same time, those people needs leadership. The American people crave leadership. Our side doesn't offer any electoral leadership. There is not one elected official that is offering our side any leadership.

That's one of the things Obama does. He makes people think he is leading them. He inspires confidence in him. We have to admit that. And it's not going to help us to continue to cave and invest our hopes in him. I know what our strategy, they are hoping he fails so they can go back — we wanted him to succeed. We gave him everything we got. We worked with him.

But that's not how it works. It's — because whenever they fall out of — unison with him, if they do, the attacks on them are just going to be vicious.

HANNITY: It's coming.

LIMBAUGH: It's coming. It — they should know it's going to happen no matter what they do so do the right thing. But Bush, decent man. And his — I don't think people understand you're president of the United States, 9/11 happens. You don't know what's going to happen the next two hours, that night, the next day.

You take the oath of office, defend to protect the constitution, the people. Obviously they had to focus exclusively on that. That's the job as he determined it and we haven't been hit since in this country.

Yes, you know, domestic policy he did some things that puzzled us, creating a new entitlement, the whole immigration thing, signing campaign finance reform, but he — he's a good man. He is not hated.

(END VIDEOTAPE)

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