This is a RUSH transcript from "The O'Reilly Factor," December 7, 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, reaction [to the possibility of a third political party]. Joining us from Washington, Fox News political analyst Newt Gingrich, whose book "Rediscovering God in America" is now updated with photography by his wife Callista Gingrich. And you can you buy a signed copy of that book, a great Christmas gift, at Newt.org.

That plug good? How was that? All right? Everybody get that?

NEWT GINGRICH, FOX NEWS ANALYST: That was pretty darn good.

O'REILLY: All right.

GINGRICH: I'd give — I don't know about Obama but I'd give you an "A+" for knowing how to get people to pay attention to books.

O'REILLY: OK. And now that I gave you a good plug, you got to give me a good interview.

GINGRICH: OK.

O'REILLY: Forty-one percent of voters nationwide, according to Rasmussen, do want a third party. That tells me that this party is just there for the taking, am I wrong?

Click here to watch Newt in the No Spin Zone!

GINGRICH: Well, I think that's — I think there is a tremendous upsurge of anger, resentment and fear. I think they feel that the Republicans haven't provided the right leadership, and they are bitterly deeply opposed to the liberal Democrats. And I think that Governor Palin, frankly, would be a very formidable person if she decided to go that route. I mean, going rogue could, in fact, take her all the way out to a third party. The challenge they have is that historically, third parties are protests. They're not a path to power. And as you pointed out, the first effect of a third party in 2012 would be the re-election of Obama and would be the survival of Pelosi as speaker of the House, you know, maybe in perpetuity.

O'REILLY: I don't so.

GINGRICH: So the…

O'REILLY: I don't' think Pelosi — I think Pelosi may be booted out of there next November. That's how bad things are.

GINGRICH: Well, she will if — but she might - she wouldn't be if you had enough third party candidates…

O'REILLY: But it won't happen next November.

GINGRICH: …splitting the opposition.

O'REILLY: Yeah, the earliest the third party could be viable would be 2012.

GINGRICH: Right.

O'REILLY: Because if Sarah Palin can raise a lot of money. She could raise a lot of money and she could raise it fast. But here's the deal. I interviewed Governor Palin. And Governor Palin held her own with me. Did you see it? Did you see any of the interview?

GINGRICH: Yeah.

O'REILLY: She held her own.

GINGRICH: Look, she's much smarter than people thought she was.

O'REILLY: OK, but…

GINGRICH: That's a fact.

GINGRICH: ...here's a question. I agree with you that she's much smarter than the media portrays her and that she did a good job in Alaska. And we said that from the jump because we went over her Alaskan record, and it's good. But compared to a guy like you, for example, who's devoted his entire adult life to government and to analyzing complex issues, you know, if you're going to debate Sarah Palin, you'll win. Will you not?

GINGRICH: Well, you don't know. First of all, people are pretty fed up with experience in government, because that's what they're mad at. So you know, I think somebody who both knows a lot about government and is deeply committed to change, which is what we're trying to do at American Solutions, may have some advantage. But Governor Palin was a good governor of Alaska. She was an effective mayor of her town. She — I think that she will turn out to be an attractive person.

But the third party movement's not about Sarah Palin. The third party movement is about an enormous tidal wave of Americans who are in a rage over government spending, over taxes, over the arrogance of politicians, over corruption. And frankly, the effect that had this year was to elect Chris Christie in New Jersey and to elect Bob McDonald by a huge landslide, 59 percent, in Virginia. If that rage continues, and I think it will, I think John Boehner will be the next Speaker of the House. I think Pelosi will end up losing her majority this fall. And I think that President Obama is probably going to be a one-term president.

O'REILLY: OK. But we're jumping ahead of ourselves a little bit, because events always overtake…

GINGRICH: Yeah.

O'REILLY: ...what happens. And you know that. I mean…

GINGRICH: Sure.

O'REILLY: ...there will be big, big things coming down. And we'll see how the president handles it. But the central question is the third party. Now I believe that the only politician in America today that can pull that third party together to make it viable financially media wise is Sarah Palin right now. And that could change. Maybe you get in the game. Maybe you do something, because you're certainly can command attention. But right now, Sarah Palin could drive through shear…

GINGRICH: She could.

O'REILLY: ...her personality could being make the third party a reality. That would, of course, make Barack Obama very, very happy. But should we take that into consideration? I don't know. Because as I said, I think we need more choice in this country.

GINGRICH: Look.

O'REILLY: But the second thing is this. The second thing is this. What is it about President Obama? Because it looks like to me that the rage you're talking about is tied directly into the president. There's something about the president that has alienated quickly I'd say 40 percent of the electorate. I think that's a fair number. What is it about him, do you think, that has alienated those people?

GINGRICH: Well, I don't - no, I think it's the Palin - I mean, I think it's the Obama, Pelosi, Reid machine. I think the first big break was when they rammed through $787 billion in a stimulus so fast that nobody even read it. And I think that the fundamental dishonesty of that machine, and the fact that it is so blatant in how it says things that just aren't true. Remember, that's why Congressman Wilson got in trouble, because it turned out he got up what he said was true. And if you are watching the bills that are passing, they are so fundamentally different from their promises, that I think it just drives people nuts. And I think people look at this left-wing machine, and I think that's why you saw first the tea party movement. Now you see, for example, in Arkansas, that the incumbent U.S. Senator Blanche Lincoln is behind all four unknown Republicans in the most recent poll. And that says that there's an underlying title wave of rejection building that could make the Republican losses of 2006 and 2008 look very small by comparison.

O'REILLY: All right.

GINGRICH: But I think it starts with the idea that it's not just the president, but it's the president…

O'REILLY: Yeah, it's…

GINGRICH: ...the majority leader operating as a machine.

O'REILLY: OK, all right, and trying to ram a lot of stuff down Americans throats they don't want. All right, buy the Speaker's book, "Rediscovering God in America". Thank you, Mr. Speaker.

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