This is a RUSH transcript from "The O'Reilly Factor," May 5, 2009. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Now for the top story tonight. Let's bring in Republican stalwart Karl Rove, a FOX News analyst. Mr. Rove is in Mountain View, California. So what say you about my analysis [of how the Republican Party can make a comeback], Mr. Rove?

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KARL ROVE, FORMER BUSH ADVISER: Well, I think you've touched on a very important point. The Republican Party between now and the 2010 elections has to begin articulating a positive and optimistic agenda that makes sense to people who sit around the kitchen table and talk about issues like health care and getting their kids educated and quality of life in their community. And it's really vital that we do that.

It's also important that we remember politics is about addition not subtraction. The attempts by some to read out of our party social conservatives is wrong. What we ought to be looking for is to expand our issues to be able to talk about things that will draw together more Americans. We should not be focused on reading people out of the party because they stand for traditional values and make up a significant number of the people who vote for Republican candidates already.

O'REILLY: All right, but the Democratic Party has been very successful in demonizing the Republicans as a bunch of people who say no to everything., are bigoted, you know, because of their social issues of gay marriage and illegal immigration. And they've been very, very successful in doing that. And I would say that conservatives are now on the defensive and the Republican Party certainly is.

ROVE: Yeah.

O'REILLY: But if you take the patriot issue. The one I just defined because this snide stuff that Springsteen does, believe me, and you know this, is all over the left-wing media. Every day. We're bad, we're bad.

ROVE: Yeah.

O'REILLY: Barack Obama, the president of the United States went overseas pretty much reinforced that to the rest of the world. Yeah, we are bad. Yeah, yeah, yeah. And if the Republican Party would start to seize the high ground there and say ut-uh, we're not bad. These people are misguided. They don't know — you can take the momentum and swing it right back.

ROVE: Yeah.

O'REILLY: Because 60, 65 percent of Americans see their country as noble.

ROVE: Yeah. Look, right now, the Republicans are stuck as the party of no because the president with his party in control of the White House, the Senate, and the House of Representatives is driving an agenda, the Republicans are opposing. So the natural is the Republicans are going to be in a position of saying no. That's not necessarily a bad thing. If you say we oppose the Obama spending. It borrows too much, spends too much, taxes too much, we're against that, that's a positive - you know, that's something that gets a lot of positive feedback. In fact, there's — the Independents and Republicans together make a majority of people in America who have concerns about the Obama budget. And it also is — these issues of taxing, borrowing, and spending too much give the Republicans a chance to pull off some Democrats as well as gain...

O'REILLY: But Mr. Rove, if the economy straightens out a little bit, that issue is going to go by the wayside.

ROVE: Well.

O'REILLY: .because the economy is going to be relieved. And President Obama is going to take credit for the economy.

ROVE: Look, the economy is going to straighten out. That's the American economy. The question is do these things in the minds of ordinary Americans hasten the day of recovery or retard it? And I think the pulls are already starting to show Americans understand all this debt.

O'REILLY: You're not seeing my vision here.

ROVE: .and all this spending.

O'REILLY: You're not.

ROVE: No, no, let me finish.

O'REILLY: You're too involved with politics and not involved enough with emotion.

ROVE: No, no, no. No, no, no, Bill, let me finish.

O'REILLY: Go ahead.

ROVE: Let me finish. You've got to deal with the economy because that's something that's really important. You've got to deal with kitchen table issues. And I agree with you. We've got to stand for a cultural view, for patriotic view of America, and seize the opportunities that were given by Democrats in Congress.

O'REILLY: They're handing it to you.

ROVE: .and by Democrats in the White House.

O'REILLY: They're handing it to you.

ROVE: Well, they hand it to us, you're right. When the president went abroad and basically said America is arrogant, you know, in France, of all places, I mean, talk about arrogant, I mean, the French. And yet, he went there and sort of condemned America. Now I call it his apology tour. And I think we do need to seize on moments like that and contrast our view, which is a hopeful and optimistic view of our country's future and a proud and patriotic future of our country's existence. Sure, there are things that America would like to have done different in the past. But we have been enormous force in the world.

O'REILLY: Yeah, but that's got to be the first salvo. And then you can go back into the other issues, but you've got to define yourself as apart from the Bruce Springsteens of the world. And it's not being done.

ROVE: Well, I have a minor disagreement with you on that. We got to be nimble enough to seize whatever the moment gives us. So if the economy is out there right now.

O'REILLY: OK.

ROVE: .we need to talk about it. We talk…

O'REILLY: The over arch has to be.

ROVE: .but if he goes abroad, we need to seize that moment.

O'REILLY: All right.

ROVE: But we have to hit on all three of those cylinders at once.

O'REILLY: OK.

ROVE: We've got to hit on the economy, culture, and kitchen table issues.

O'REILLY: I only have two minutes left and want to get your view. You are expecting a liberal Supreme Court justice, of course, coming down the road.

ROVE: Absolutely.

O'REILLY: Any insights into that?

ROVE: Well, just this. I was part of a five party committee that spent years at the White House under President Bush preparing for the moment of the Supreme Court vacancy. We had thick notebooks on all prospects. We had everything from all of their writings and opinions to college transcripts to tax returns to, you know, charity dinner speeches, you name it. We had it. We studied those. It was why it was possible three months after a vacancy occurred to have Chief Justice John Roberts confirm to the Supreme Court. The Obama administration, having come in 100-some odd days ago, has probably not had the time to do that kind of exhaustive research. So I thought it was smart when President Obama said, you know, this is going to take at least six months. Because they do — they cannot afford to have a vetting mistake after having five cabinet nominations or five administration nominations with tax problems. They can't offer up somebody they've not fully and completely vetted. And that takes time.

But to me, there are a couple of interesting points. Barack Obama has a problem in that he voted against two highly qualified nominees of President George W. Bush to the Supreme Court. Roberts and Alito. He did he so, after he Senator Obama said they were qualified, had the right temperament. Had the respect for presidents. Were — had great passion for the law. It was very laudatory of him. But yet, he voted against them.

So having voted against qualified mainstream conservative recommendations, nominees of a conservative president, he can't turn around now as president and say a well-qualified liberal nominee ought to be given the same benefit of the doubt. Because he didn't give them the benefit of the doubt. He also voted for a filibuster of Sam Alito. So he cannot say my nominee automatically deserves an up or down vote on the floor of the United States Senate because he himself refused to give an up or down vote on Sam Alito.

O'REILLY: All right, Mr. Rove, thanks very much. We appreciate it.

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