This is a rush transcript from "Hannity," February 27, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: And in it is day number 39 of the chosen one's regime in our nation's capital. But our headline this Friday night, "cracks in the armor." Now the president announced his plan today to end combat operations in Iraq on August 31, 2010, but he will leave 30 to 50,000 troops on the ground until the end of 2011.

But tonight, the biggest critic of the time table for withdrawal, the San Francisco speaker, Nancy Pelosi. Now she has made it clear that she is not happy with leaving so many troops on the ground for so along. She wants them out now. But the president isn't alone. The president is now drawing quite a bit of fire from members of his own party.

Now earlier this week, Democratic Senator Robert Byrd sent a letter to the White House complaining that their appointment of "czars" to oversee just about everything is tantamount to a power grab.

And just this morning, Senator Kent Conrad, who is the chairman of the budget committee, said about the president's budget, "We can do better." He also criticized the president's plan for cutting farm subsidies, limiting tax deductions and lamented the amount of national debt that the chosen one is leaving our children.

In the words of Rick Santelli, "Mr. President, are you listening?"

And joining me tonight from Capitol Hill is Arizona Republican senator, former presidential nominee John McCain is with us. Senator, good to see you. Thanks for being with us.

SEN. JOHN MCCAIN (R), ARIZONA: Thank you, Sean. Thank you for having me on again.

Video: Watch Sean's interview

HANNITY: Well, we appreciate it. First of all, Harry Reid talking about the troops that are going to stay in Iraq. "Whoa, that's a little higher than I expected." Chuck Schumer, "50,000 is more than we thought." Nancy Pelosi, "I thought it was 15 to 20,000." And John Murtha doesn't want any at all.

What do you think is happening? Is the president reading intelligence reports and perhaps getting a different perspective than was in the campaign?

MCCAIN: I think the perspective that the president has gotten, and I applaud him and General Jones and Secretary Gates and others, they have gotten a consensus military opinion, and that opinion is that this move is medium risk but doable. And the fact is 50,000 troops left behind is more than one-third of the troops that are there today. And they will be in harm's way. They will be embedded with Iraqi troops and advisers, as you know, do great work. But the fact is that we will be there this year in strength, particularly until the Iraqi election in December, which is a very important landmark for the Iraqi progress.

HANNITY: Do you have any problems with telegraphing any timetable for withdrawal? Is that a problem?

MCCAIN: The president said on several occasions that as commander-in-chief, he will change strategy is necessary. He will change the plan. Look, General Odierno has very significant concerns. So does General Petraeus. And also, the chairman of the joint chiefs. They say this is doable, and 50,000 troops being left to do a lot of the work that needs to be done I think is a very important factor here.

HANNITY: I was watching you, Senator, when you had the opportunity the other day, when they had this fiscal responsibility summit, which frankly was a joke, but when they had it, you had an opportunity to ask the president a question. It got a lot of news. We have got nearly $4 trillion budget that is coming up. We've spent all this money, $1.75 trillion deficit, we are headed to $8 trillion in terms of a deficit of President Obama. What do you think this ultimately means for the country in terms of our economic recovery?

MCCAIN: I think it has — it is mortgaging our children's futures. I think it is generational theft and I think that even the CBO has said that over time, this could actually harm our economy significantly because it will crowd out private investment.

But most importantly, Sean, what we are talking about is perhaps the biggest massive change in the relationship between the government and the free enterprise system since Franklin Delano Roosevelt. In some ways, it may even be bigger.

This is a massive increase in the role of government in all parts of Americans economy and it is very bad for America's economy. And let me add that Republicans did have a trigger, but once we have growth in our economy, which will happen, that we have got to go on a path of balancing our budget.

HANNITY: $634 billion would it be that the president has set aside for his health care proposal, but that is only a down payment, they say. That is only one thing that bothers me. We've got 9,000 earmarks in the omnibus spending bill on tops of all the earmarks on the massive spending bill. Both you and he talked about eliminating earmarks, I thought, during the campaign.

MCCAIN: Well, that is one of the most disappointing things, is that they claimed there were no earmarks in the stimulus package. There were thousands, and they said there wouldn't be any in the future, and this is last year's bill. This bill was written again and passed by the House, will be taken up in the Senate, 9,000 outrageous, disgraceful, pork-barrel earmarks, and some of those are beyond belief. Promoting astronomy in Hawaii for a couple of million bucks when Americans are out of work, and can't afford their health insurance. It is terrible. It is disgraceful. It is disgraceful.

HANNITY: I think it's disgraceful too. And I'm even disappointed because 40 percent of them are going to Republicans and I'm thinking, do they not hear the election results, starting in 2006? I mean, even Bobby Jindal said we have to regain the trust of the American people. Wouldn't every Republican signing a pledge, no more earmarks, we're the party of fiscal responsibility, go a long way to reinventing the image and the perception of the Republican Party?

MCCAIN: Absolutely. It means we are still in denial. Our Republican base was disenchanted to say the least when we let spending get out of control. And the fact that Republicans will still vote for this bill is, frankly, ample evidence that parts of the Republican Party still haven't figured it out. We have to stop this corrupting, earmark, pork-barrel process. We have former members of the Republican Party residing in federal prison. This is a gateway drug, and it's got to be stopped.

HANNITY: A gateway drug that is not going away, Senator, it seems to me. Do you worry that this economy now will not recover? Do you really think that this is making things worse, last question?

MCCAIN: I believe our economy will recover, and I am confident in the American people and the American worker and the entrepreneur. What I worry about is laying the debt on my kids and grandkids that they will not be able to pay, and that will in the long term, will harm our economy dramatically, not to mention the government takeover of the free enterprise system in many respects. This is very dangerous.

HANNITY: All right, Senator McCain, thank you for being with us, we appreciate it.

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