This is a rush transcript from "Hannity," July 30, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The Democrats' celebration over the so called health care deal has been cut short, as now more members are speaking out against the plan. Now the agreement which involved only a handful of Blue Dog Democrats has reportedly enraged other elements of the Democratic Party. And that has some speculating that this deal may actually cost the Democrats votes.

So now with a vote not likely to occur until September or even October, is there hope for health care reform?

Joining us now, former mayor of New York City, potential governor of New York, Rudy Giuliani.

(LAUGHTER)

RUDY GIULIANI, FORMER PRESIDENTIAL CANDIDATE: I hope there's no hope for the health care plan this year.

Video: Watch Sean's interview

HANNITY: No, I'm talking about you for governor.

GIULIANI: We can hope next year.

HANNITY: Oh OK.

GIULIANI: This — this would be irreversible to a very large — so far the damage that the Obama administration has done to our economy is very, very serious. I think more than any president has done ever in a short period of time. But most of it's reversible. It's about spending money, it's about deficits, it's about ultimately inflation.

HANNITY: Yes.

GIULIANI: This would be almost irreversible. You put anywhere from 20 to 50 million more people on government insurance, government cooperative, nationalized health care. It's going to be very hard to get them off and Medicaid has never been able to be reformed. Medicaid got started. Cost out of control. When I was mayor, New York City pays 25 percent of the Medicaid bill. I think at that time it was $2.5 billion and rising. Very, very hard to control it. So this we have to fight, and we have to stop it.

HANNITY: It seems that there is this pattern that is just emerging among the Democrats, which is they actually think that they can spend their way out of — into prosperity and tax their way into prosperity. I mean, the old...

GIULIANI: Right.

HANNITY: ... cliche, tax and spend...

GIULIANI: What they miss is we got into trouble by spending too much.

HANNITY: Yes.

GIULIANI: The problem was government spending too much, business spending too much, banks spending too much, and people spending too much.

HANNITY: Right.

GIULIANI: People buying homes they couldn't afford, people putting too much on their credit cards, businesses buying it for credit rather than cash. We were in a spend out-of-control mentality, and the Obama administration has made all those big spenders look like amateurs.

HANNITY: He had Joe Biden. Joe Biden said we're going bankrupt and we're going to spend more money to get out of bankruptcy.

GIULIANI: Obviously, he was never a bankruptcy lawyer.

(LAUGHTER)

HANNITY: All right. Let me ask you the political side of this. Because you've got, for example, the blue dog Democrats seemed like they were going to hold strong. It looks like in my mind like they were bought off.

GIULIANI: Yes, yes.

HANNITY: Clearly an indication.

GIULIANI: I saw John McCain tell you that you can't really count on the Blue Dogs.

HANNITY: I've been warning everybody that thought, oh, I've won this debate.

GIULIANI: It's not really dogs. Use some other comparison.

HANNITY: On the radio I call them lap dogs, you know. Because basically, they had their arms twisted. They were invited to...

GIULIANI: You know why? Because they're essentially not economic conservatives. They're essentially either moderates or liberal in districts that require them to be that way.

HANNITY: Right.

GIULIANI: So they're doing a show rather than it comes from the heart.

HANNITY: So do you think that they are creating the appearance that they're more fiscally conservative so they can tell their...

GIULIANI: Anybody that is, I think, an economic moderate, the idea of increasing nationalized health care...

HANNITY: Yes.

GIULIANI: ... is a disaster. It's a disaster for the economy. It's a disaster for society. And worst of all, the most important thing we have is our health, and it's putting our health in grave jeopardy.

HANNITY: Look at all the taxes they want to raise now. They want, for example, a plastic surgery tax, which by the way, will greatly impact my future. They want a soda tax. They want — in New York, they want an iPod tax, a movie tax, a cigar tax, a cigarette tax. They basically — if you wake up in the morning, they're probably going to tax that.

GIULIANI: Well, if they — in the case of New York, it's going to drive people out of New York. I mean...

HANNITY: It already is.

GIULIANI: Even the so-called sin taxes, tobacco and anything else, there's not an unlimited number you can go to. Eventually, you can get to a number you actually drive so many people out you actually raise less money.

They did that — they did that with the hotel occupancy tax in New York when the Democrats had control before I came into office. They raised it so high they were losing a billion dollars a year. I lowered it by a third, helped get it lowered by a third, and we started making $100 million more.

HANNITY: In the city of New York, a city of, what, eight million people now, 8.5 million people, right?

GIULIANI: Right.

HANNITY: I read in one of the local papers that 50 percent of New York City's income tax bill, a city of eight million people, comes from 42,242 people. How could that possibly...

GIULIANI: Probably — probably correct. Probably correct.

HANNITY: Wow.

GIULIANI: In fact, I'm not at all surprised by that, because of the graduated income tax. We already have major distribution of wealth going on in this country.

HANNITY: Right.

GIULIANI: Redistribution of wealth, from rich to poor. The rich pay — the so-called rich. We're talking about $250,000 or more in New York City. I know this is hard for people to understand. These people sometimes are two-earner families. They're really struggling.

What he would do is drive away wealth, which is, after all, what produces jobs. I mean, Obama's plan or the plan in New York, the plan in New Jersey, these are — these are plans that will change the nature of our society into a social democracy.

HANNITY: But we see things are shifting. The governor of New York is extremely unpopular. The governor of New Jersey is extremely unpopular. Chris Dodd is in terrible trouble in Connecticut. You see Rob McDonald emerging, 15-point lead. Real clear politics. Barbara Boxer is in trouble in — out in California.

Do you think that — that that, coupled with the president's poll numbers, that there is the re-emergence of the Republican Party?

GIULIANI: Not yet. It's happening. I think that the press conference the president had last week, forget the Gates comment and all that, it was one of the worst, because here he was — he has them down to the 10-yard line. He wants to get this health-care thing over the top. And what does he do? He gives a press conference in which he doesn't give any answers.

HANNITY: Yes.

GIULIANI: He wants to force Congress to vote, but he can't tell you how many people, how much money it's going to cost, how much it's going to save. He gives you this ridiculous idea that it's going to save money. How do you cover 40 or 50 million people and save money? The American people are more intelligent than to buy that.

HANNITY: You mentioned the Gates issue and this, you know, whole "beer summit." Let me — let me ask you this. When you — when you say that I don't have any facts and I don't know anything...

GIULIANI: Stop. Stop. I've had plenty of press conferences. You usually get in trouble on the last question, as he did.

HANNITY: Is that true?

GIULIANI: Yes. And very often I would use the "I can't comment on that" to remind myself to keep my big mouth shut. I'd use it — I'd use it. And I thought when the president said that, I thought, wow, that's smart. He's reminding himself, shut up, don't say anything. The minute you say, "I don't know the facts," you then can't have an extremely strong opinion about something you don't know about...

HANNITY: Yes.

GIULIANI: ... unless it's coming out of your pre-judgment, which is cops are bad.

HANNITY: Well, that he acted stupidly without knowing.

GIULIANI: Telling you he didn't know how they acted...

HANNITY: Yes.

GIULIANI: ... but I'm just going to assume the cops act stupidly. The Cambridge police act stupidly.

HANNITY: Now would it have been better had he just apologized and said, "I screwed up. I shouldn't have said anything"? But then he says, "This is a teachable moment," and then he lectures to the rest of society that we can really learn from this. We need to lower the volume.

I'm like, "You raised the volume."

GIULIANI: He's actually right. It is teachable. Here's the lesson.

HANNITY: Shut up.

GIULIANI: You shut up. And also — and also, shut up when a cop like is asking you questions. How about you don't insult him, you don't yell, you don't scream? My father taught me that when I was very young. I grew up in Brooklyn. It was a good lesson. Not a bad lesson. Colin Powell said essentially the same thing.

HANNITY: And so did Bill Cosby.

GIULIANI: Yes, I mean, keep your mouth shut.

HANNITY: I'm going to confess to you...

GIULIANI: Be nice to the cops. They have uniforms on. And they're risking and doing something I don't do, you don't do, Gates doesn't do, and President Obama doesn't do. They put their lives at risk every night for us. You've got to have respect for that uniform.

HANNITY: All right. I'm going to confess to you, I used to have a heavy foot. And I got pulled over a few times in my life. And you know what I learned? When you say, "Yes, officer; no, officer; thank you..."

GIULIANI: It's the best way.

HANNITY: It goes — it goes a lot...

GIULIANI: You want a lesson out of it? "I'm sorry."

HANNITY: "I'm sorry."

GIULIANI: It's the best way out of a ticket. And don't ever do this — "Well, I wasn't speeding, Officer." He knows you were.

HANNITY: Exactly.

GIULIANI: Immediately you're challenging — you're challenging his intelligence. The answer is, "I'm sorry," even if you know you're right.

HANNITY: Yes.

GIULIANI: "I'm sorry. I didn't mean it, Officer. I was rushing — you know..."

HANNITY: That's what I said.

GIULIANI: "I'll never do it again. I promise."

HANNITY: And can I tell you, when I used to argue, I used to get a ticket. But now — except one guy said once said to me, "Oh, you're that idiot on FOX." And that didn't help.

And then I said, "Yes, but I'm friends with the mayor."

And they said, "Good, here's two." No, I'm only kidding.

Good to see you, Mr. Mayor. Thank you.

GIULIANI: Thank you, Sean.

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