This is a rush transcript from "The O'Reilly Factor," February 17, 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, two topics: Is President Obama promoting a nanny state? And some breaking news from the guy who took Obama's Senate seat.

Late Tuesday, Senator Roland Burris says he did try to raise money for Blagojevich. That, of course, contradicts what he has said in the past. So it looks like Burris is history, right? With us now, commentator and author Larry Elder.

Now, I know you're an Angelino. You're an L.A. guy.

Click here to watch the segment.

LARRY ELDER, AUTHOR, "STUPID BLACK MEN": Native guy.

O'REILLY: Far away from Chicago.

ELDER: Yeah.

O'REILLY: But now we have a sitting senator, takes Obama's seat, who's a liar.

ELDER: He perjured himself.

O'REILLY: Yeah.

ELDER: Yeah.

O'REILLY: And so now what do you do? You know, we're in the middle of economic chaos — and we'll get to that in a moment — and this and that. And now here's this guy sitting there. So what would you recommend?

ELDER: Well, as a Republican, I'm perfectly happy to have him there and serve as a pinata for Republicans. He's a dead man walking. He'll never get nominated, assuming he decides to run.

O'REILLY: He's up in 2010. But he can sit there for a year and do as much damage as he can possibly do.

ELDER: Yeah, he could. And if I were the Democrats, I want him out ASAP. But if they do, then they'll just nominate somebody else. Will that person be free from taint? This whole thing, it just smells. I never would have taken the job in the first place, Bill, had I been Burris, because I would have assumed that others would have assumed that I had been bought off.

O'REILLY: They got him on a tap. That's why he's doing all this.

ELDER: That's right.

O'REILLY: They got him on a tap. They told his lawyer, hey, you know…

ELDER: Right.

O'REILLY: ...but you know, look…

ELDER: And he admitted the statement now because of that a couple of times.

O'REILLY: …Illinois…

ELDER: It's ugly.

O'REILLY: Shouldn't Illinois just be really embarrassed? I mean, it's just time after time after time. So anyway, let's…

ELDER: The solution is for there to be a special election and let the people elect the person to succeed Barack Obama.

O'REILLY: I don't know if the state has a mechanism for that.

ELDER: No, they don't, but…

O'REILLY: OK.

ELDER: ...that ought to be the way they should do it.

O'REILLY: But they go back to Springfield.

ELDER: Right.

O'REILLY: And they pass a bill. Let's have an election.

ELDER: There you go.

O'REILLY: Get this crook out of there.

ELDER: That's right.

O'REILLY: All right. Nanny state, there is a proposed law. And we just found out about this. This is great. In New Hampshire, live free or die country, that would limit a restaurant or bar to serving one alcoholic drink an hour, OK?

ELDER: Right.

O'REILLY: And I don't know, I don't think it'll be passed up there, but it might. But President Obama today on television, what struck me was No. 1, he was very confident, and I didn't see any kind of shaky stuff. And I sat across as close as you are to me, Larry, right now for Obama, and I rocked him a couple of times. And I saw, he wasn't, you know, sometimes…

ELDER: I know that feeling. I'm feeling it right now.

O'REILLY: Right, right. But today, he really looked confident.

ELDER: Yeah.

O'REILLY: Now I thought it was good. If you really believe in your package, and you really believe this is the way to go, OK. Cavuto doesn't believe it. And I'm getting a little bit worried about the nanny state cradle-to-grave entitlements, because here in California that's what you got. You know, the nation's largest state right now, population wise, you got a nanny state here.

ELDER: Oh, absolutely. And one of the many things that's wrong with this stimulus package is that California will be a beneficiary. Schwarzenegger comes in, $15 billion budget deficit. Now there's a $40 billion deficit…

O'REILLY: $45.

ELDER: ...because he has spent faster than predecessor Grey Davis did.

O'REILLY: But is it his fault?

ELDER: And now we're getting money, we're getting rewarded for our irresponsibility, and other states are paying for our irresponsibility.

O'REILLY: And they're going to get an infusion.

ELDER: Yeah.

O'REILLY: But still, California's on the verge of bankruptcy.

ELDER: Uh-huh.

O'REILLY: And the money that they get from the federal government ain't going to save them.

ELDER: It won't.

O'REILLY: Right, because this is on and on and on now. But is — I don't know if it's Schwarzenegger's fault so much as, the, you know, 75 percent, you need 75 percent in the California legislature passes spending bills. That means Republicans had to jump on the train, too.

ELDER: Well, they both have.

O'REILLY: Right.

ELDER: And we have just spent faster than population and inflation. And again, his predecessor was impeached in part for this kind of irresponsibility.

O'REILLY: All right. Let's get personal. The reason I wanted you on for this segment is Larry Elders' father, who's still alive, 93 years old, was a janitor.

ELDER: Hi, dad.

O'REILLY: OK?

ELDER: Yeah.

O'REILLY: Was a janitor. You worked yourself up to South Central to the Hollywood Hills. You are a self-made man. Right now, the trend…

ELDER: I'm living there now. You never know what's going to happen down the road.

O'REILLY: All right, all right, you're a self-made man. You got the little pocket hanky.

ELDER: Yeah.

O'REILLY: You got a lot of stuff going on. You did it, all right? But the trend now with President Obama is, we'll do it for you. The government will save your butt. And Cavuto thinks it's really dangerous. And I assume you do, too.

ELDER: I do. It's funny you should mention that. I was just talking to my dad just the other day. My dad was a teenager when the Great Depression started. He was 24 or so when it ended. And all of these spending programs that Obama is proposing, they were done during that period of time. And a guy a lot smarter than me, Henry Morgenthau, was his Treasury secretary. And he wrote in his diary, I'm paraphrasing, Bill, we have spent and spent and spent. We've made promise after promise after promise. We have not realized our promises. We've not met our commitments, and we've left the country with a big, big debt to boot. It has not worked. This is not me. This is the equivalent of his Geithner, his Paulson saying it didn't work. And under Ronald Reagan, you look at the early '80s. To me, the biggest criteria when you're looking at a downturn is jobs. 7.6 unemployment right now. Early '80s, 10.8. We have inflation at 13.5 percent. We had prime interest rates at 21.5 percent. Reagan didn't go for some big rescue bailout. He cut taxes broadly and he tried to slow down domestic spending on the part of government. That's what Obama ought to do here. Instead…

O'REILLY: He's not going to do that.

ELDER: ...he's bailing out all these people…

O'REILLY: He's not going to.

ELDER: ...rewarding people for irresponsibility.

O'REILLY: Right.

ELDER: It's insane.

O'REILLY: The die, as they say, has been cast. Larry, thanks very much. Good to see you.

ELDER: My pleasure. Thank you, sir.

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