This is a rush transcript from "Hannity," July 9, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Barack Obama's honeymoon with the liberal media may still be going strong, but it appears that America's love affair with the 44th president is quickly coming to an end.

And that is our headline tonight, "Poll Position." Now brand new data is showing that Mr. Obama's approval rating is now in a freefall. Now this Daily Gallup Poll updated earlier today shows the president's numbers clearly trending in the wrong direction. In fact, his approval rating is now at the lowest point since Inauguration Day.

And recent polling in swing states like Ohio and Virginia also indicate that Americans are fed up with the direction that this country is headed in. As you can see on your screen, Mr. Obama's approval has dropped almost 20 points in only five months.

And the new Rasmussen Daily Tracking Poll, presidential tracking poll, now shows that only 30 percent of those polled strongly approve of the president's job performance. Now that is the lowest since he took office while 38 percent of those polled strongly disapprove, which is the highest that that has been since January 21st.

And joining me now to help sort all of this out is the man behind that last poll, Scott Rasmussen, and also the former counsel to President George W. Bush and former RNC chair, Ed Gillespie.

Video: Watch Sean's interview

Guys, welcome back to the program. Thanks for being with us.

Thank you.

SCOTT RASMUSSEN, RASMUSSEN REPORTS: My pleasure, Sean. Good to be here.

HANNITY: All right. Scott — first of all, let's go through this. 30 percent, 38 percent. Because this is something new that you've been doing and this is the presidential index. Why don't you explain it and how this is the lowest number that he's had at this point?

RASMUSSEN: Well, we simply take the number of people who have strong opinions about the president, strongly approve or strongly disapprove. We have been tracking them every day since — actually since Election Day.

And what we've found is that in the first few months, there was a honeymoon period. What you'd expect. Americans began — 44 percent of them began with a positive opinion of the president. Strongly approved of the way he's got started.

And that number began to slip a little bit during the stimulus debate. It's moved down a little bit over the past few months as Republicans became disenchanted. But in the last week or two, especially with that jobs report last week, the president's numbers have started heading south, and especially among independents.

HANNITY: And Doug Schoen, a good friend of this program. I thought he had a pretty interesting line. His analysis of these independent voters now deserting Barack Obama. He actually said that independents had become effectively operational Democrats in 2006 and 2008. He says they're now up for grabs. And not only that, they're trending Republican.

RASMUSSEN: Well, again, it all comes back to the economy. Right now the people want this president to fix the economy. Last fall, we had Lehman Brothers' collapse. It became the issue of the campaign. People were hopeful and optimistic. Consumer confidence was rising for a few months for March, April and May.

HANNITY: Yes.

RASMUSSEN: It's now heading in the other direction.

HANNITY: All right. Ed, your thoughts on what Doug Schoen said? Because, look, you — as a matter of fact, you first spotted this trend in the Resurgent Republic, which you foundrd as a sort of answer to democracy course. So you saw this a little earlier than others.

ED GILLESPIE, FORMER BUSH COUNSELOR: Spotted it in about April when it came to the budget and spending, Sean, when we saw Republicans and independents, a majority of them on one side and majority of Democrats on the other side of approval of the Obama budget.

Now really — I think it has increased and it has been accelerating. And I think Scott's data is important relative to the intensity. Now the feelings of people who are concerned about President Obama are much greater than those who are happy with President Obama. And I think that's telling. And I think that indicates more trouble ahead for him.

HANNITY: All right. What does it mean? I have been following this poll that more Americans, by almost 2 to 1 margin, consider themselves conservative. About 40 percent, about 21 percent of Americans identify themselves as liberal.

The Gallup Poll found that the Democratic Party or a growing number of Americans think that the Democratic Party is too liberal. So what does this mean now, Ed, as we head into these 2010 elections?

GILLESPIE: Sean, when people see themselves more aligned with — and identify with how they see a party, so if they see themselves as center-right or more conservative-leaning, they see the Republican Party, obviously more conservative leaning, they see the Democratic Party becoming more liberal and moving away from them. That is why I think what Doug Schoen said about the independents.

They were — the flip side of that was true in `06 and `08. And that's why the bulk of them, they broke against Republicans. I think we're seeing the early signs that that could flip in 2010. With 36 governors races up in 2010, with so many competitive Senate races. Illinois, I think, is going to be, as with Senator Burris' announcement, going to be very competitive in 2010 as well as many others.

I think that there's a real.

HANNITY: But we know.

GILLESPIE: The opening signs have some real opportunities for Republicans to make gains.

HANNITY: Well, certainly, New Jersey is one. Certainly Virginia is one. Certainly Connecticut is one. Harry Reid is in big trouble. So I mean we have some really interesting races we're going to start to follow.

Scott, let me ask you. The Wall Street Journal said right track, wrong track, the American people opposed the stimulus and say the country is on the wrong track. You had a poll where now more Americans are beginning to blame the president for the bad economy. That they're not getting away with this oh, it's George W. Bush's fault which has been their mantra for a long time.

RASMUSSEN: Well, obviously, when the president first took office, people were saying the problems were inherited. And as time goes on, that number shifts. About six weeks ago, 62 percent of Americans said that it was George Bush's fault.

That number fell to 54 percent a couple of weeks ago and as time goes on, it will continue to move more and more in Barack Obama's direction. That's a natural course of events.

On this point about liberals and conservatives, Sean. It's absolutely true. There are twice as many conservatives in the country. There's also a different dynamic. There are more conservatives than there are Republicans. And that means the Republicans have to be conscious of those conservatives outside the party.

On the other side of the coin, there's far more Democrats than there are liberals. And that means the liberals have to be reaching out to the moderate Democrats. And those are the ones they're having trouble hanging on to right now.

HANNITY: Yes, well, I would agree with your analysis here.

Ed, let me ask you the same question about that. And also 9 out of 10 Americans are worried about Obama's spending deficits. L.A. Times poll, and similarly, very similar results, ABC/Washington Post that 90 percent think Obama is spending way too much money.

Now that doesn't even include a second stimulus which they're talking about. The taxes for cap-and-tax. And nor does it include, you know, the health care plan, which is gong to cost an enormous amount of money.

Is this now...

GILLESPIE: Sean, this...

HANNITY: Go ahead.

GILLESPIE: The spending is breathtaking. And I think the American people are starting to see that very clearly. This agenda of, you know, taking over the financial industry and the auto companies and having an active role in the management and in the decision-making process there. So it's not just the spending, but it's the government involvement in our economy.

And then spending in terms of creating more debt. This president has created more debt in his first year in office or proposed more debt than every president combined before him, from George W. and the first — George Washington to George W. Bush, the 43rd.

That is remarkable. And when you look at what he's proposing in terms of increasing the cost of energy, you just noted on cap-and-tax, health care, federal spending and this stimulus, where they said that the — if we passed the stimulus, unemployment wouldn't go above 8 percent. They were wrong about that. They've got to stop over-promising and under-performing.

HANNITY: Yes, I always think you're better off, you know, under promising and over-delivering. I would agree with you.

You know, Scott, on the point that Ed is making, because I think Ed is making a great point here. You know, they did promise that if we passed the stimulus — well, they said if we didn't pass it, it would be a catastrophe and a disaster and we had to do it. But if we passed it, they promised that unemployment wouldn't go above 8 percent.

Now it's 9.5 percent. Now they're telling us it's headed to double digits. You point out that as a result, the internals of your polls are now showing that the GOP, which traditionally leads on national security, has expanded its margin. And now for the first time in many years, Republicans are leading on the issue of the economy.

RASMUSSEN: That's right. Two months in a row now they've been leading on the economy. And I should point out, it's more a loss of confidence in Democrats than a — you know, a reemergence of confidence to Republicans.

But yes, the edge has switched to the GOP on this issue. Stimulus is a key part of it. Nationwide just 31 percent of all Americans believe that the stimulus helped the economy. Two out of three say it either hurt or had no impact. And when you spend as much money as that you would hope it would have a positive impact.

HANNITY: Yes.

RASMUSSEN: 45 percent of Americans are saying, you know what, all the money that has not been spent yet, we should just stop it.

HANNITY: All right. Last question. I'll throw it to you, Ed. Back to the issue of independents now moving away from Barack Obama. If you couple that with these battleground states, if we look at Virginia, if we look at — Chris Dodd is in trouble. Harry Reid is in trouble. They're in trouble in Delaware. Corsine is in trouble in New Jersey.

You know, could this — could 2010 become the modern-day version of 1994? Or is that overly optimistic on my part?

GILLESPIE: It's early to tell. But like I say, the signs are there for what could be a big year in 2010. A big first midterm. We'll — you know we'll see some indication as you noted in New Jersey and Virginia.

There are governors' races this year where very strong independent voters. New Jersey was the first date in the union with a plurality of registered independents. Virginia, for a long time, has been 1/3, 1/3, 1/3 in terms of Democrat, Republican, and independent. So I think these are possible bellwethers in 2009.

HANNITY: Yes. And all right, guys, we'll have you back. We'll be following these numbers, fascinating numbers. And by the way, I predicted all of it. But I'm not — you know, what do I know? Good to see you, guys.

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