Karl Rove Explains Why Dick Cheney Told Sen. Leahy to 'F-off'

This is a rush transcript from "The O'Reilly Factor," February 13, 2009. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Impact" segment tonight: As the massive economic stimulus bill continues to drive many Americans crazy, we are looking at about $2 billion allotted for neighborhood stabilization programs. Now, that sounds like a con to me.

Joining us from Washington, FOX News analyst Karl Rove. So, what are neighborhood stabilization programs?

Click here to watch the segment.

KARL ROVE, FOX NEWS ANALYST: Well, they could be a lot of things. ACORN, for example, is in this business, as are a couple of other left-wing groups, where they essentially try and either go in and buy up properties or subsidize the housing of people who are in difficulty in urban areas. These could also be run by local municipalities.

But look, neighbor stabilization programs are essentially a way to take government money and put them in the hands of politically connected people, whether they're in local governments or in political organizations like ACORN and use them to build their power base.

O'REILLY: Now did you guys have any of this neighborhood stabilization stuff?

ROVE: You know, there's been some of this stuff around for a long time, but we fought against it. I think we pretty much got it wiped out. But it's a sign. This is a 1,075 page bill, and stuffed in — nobody has read.

O'REILLY: Right.

ROVE: And doesn't have time to read. And what we're going to find out is as they got to the final stage of this bill, lots of people inside the Democratic leadership said let's reward our left-wing allies and our labor union allies and our big urban machines. Let's…

O'REILLY: Sure, but it's a fait accompli it's going to happen. Everybody I think who pays attention knows what the con is. But I just want everybody to notice how it works. So you got $2 billion, and you're going to give that to the individual states. So the states apply for these neighborhood stabilization grants. And who decides which state gets the money? Who decides that?

ROVE: Well, individual groups apply for the funds. I'm not certain it necessarily goes through the states. But if it goes through the states…

O'REILLY: Does it go through HUD, the Health and Development?

ROVE: Well, housing and urban development, yeah.

O'REILLY: OK.

ROVE: It'll come out of HUD, but it will either be — I haven't seen the provision and it's stuffed in there. But it's either likely to go to the states or to municipalities, but private organizations can apply for these funds…

O'REILLY: So I can apply. You can apply in Texas. I can apply on Long Island to stabilize my neighborhood. I'd send in the little thing and they send me the form. OK, it sounds like a ridiculous con to me, but you know how it is. Now…

ROVE: Look, this is a bill with like $4 billion for obesity programs.

O'REILLY: Sure, and…

ROVE: And let's not get started about how crazy it is.

O'REILLY: And I think there's some teeth flossing. A couple billion for floss. Yeah, we all know what this is, but it's going to get passed, and that's it.

Now Leahy, Senator Patrick Leahy, one of your best pals, you know, I always wanted to know, and you got to tell me if you know, that's the rule, Mr. Rove. The rule is you have to tell me if you know why Dick Cheney told Leahy to "F-off."

ROVE: Senator Leahy made public remarks questioning the integrity of Dick Cheney and suggesting that he had been involved in nefarious schemes benefiting Halliburton. And then he came up and attempted to make pal-y, pal-y good guy with Vice President Cheney, who had had enough of the duplicitous — duplicity and hypocrisy of Senator Leahy.

O'REILLY: Very interesting. So he hit Cheney on Halliburton. And to Cheney's face, he tried to be a good guy. And Cheney told him to "F-off." Very interesting. But now Leahy is getting back because he wants a truth commission to drag you, Cheney, Bush and everybody else in front of the Senate to ask embarrassing questions, correct?

ROVE: Well, it may not be the Senate. He's talking about — he implies in the speech that he's talking about an outside group to do it.

But look, this is the kind of lunatic stuff that Leahy comes up with when he wants to get a little attention or placate the left. If he were serious, would he really be suggesting this? For example, is he suggesting that they get Senator Jay Rockefeller, his Democratic colleague, or Speaker Nancy Pelosi or Congresswoman Jane Harman, all of who were briefed on the enhanced interrogation techniques and other things that's he's upset about? Was he going to get them in front of the commission, say…

O'REILLY: No, because he has the power on the committee to call who he wants. He could just call you.

ROVE: Sure.

O'REILLY: And he could call anybody he doesn't like. And he can ignore them because he's the committee chair.

ROVE: Well, again though, he is talking about an outside group to do this. But it would be a — if he were to do it, either inside the Senate or as an outside group. It would be obvious that this was a political witch-hunt and that this was, you know, sort of 1930…

O'REILLY: But NBC News would like it. They didn't give it a lot of coverage.

ROVE: Well, maybe so. But you know, America is still the United States of America. We're not some little dinky country in Central America run by colonels in mirrored sunglasses where this kind of thing where you take where the incoming regime goes and witch-hunt for the people for the previous regime. If we ever get that way, then we will have lost the greatness that is America. But that's — look, I don't take this as serious…

O'REILLY: OK, all right.

ROVE: This is just another example of Leahy going out there, opining in a way to draw attention to him. And you know, this is just — this is just…

O'REILLY: So we should all tell him to "F-off," I guess, in another way, in a kinder, gentler way. Not exactly…

ROVE: In a kinder, gentler way.

O'REILLY: OK.

ROVE: We should be wryly amused at his latest endeavor.

O'REILLY: All right. Now I need the inside story on Judd Gregg, former Republican senator from New Hampshire.

ROVE: Well, current senator. You will see — yeah, he's still in the Senate and will remain in the Senate.

O'REILLY: OK. So Barack Obama wanted him to be the Commerce secretary. He said yes. Now he says no. Why did he bail?

ROVE: I think two reasons. One is because I think he had a series of conversations with President Obama regarding the stimulus and his input on items like that. That led him to believe he'd actually have influence. And then as he saw the shape of the stimulus package it was clear they weren't listening to him.

The other issue is the U.S. Census. The U.S. Census plays a vital role in setting the formulas that apportion money out between states and communities and also in providing the database, if you will, by which we reapportion the Congress and then redistrict the Congress and state legislatures. It is insulated from even the political control of the Secretary of Commerce. And what happened is this administration has now directed that out of Rahm Emanuel's office, there will be direct political supervision of the census.

O'REILLY: Right.

ROVE: And I think Senator Gregg looked at this and said this is the final straw. I can't — I cannot take on a job where this kind of political…

O'REILLY: Let me just say, we're going to follow that Census thing to see if they are really serious about it. But we appreciate it, Mr. Rove. As always, thank you.

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