This is a RUSH transcript from "The O'Reilly Factor," January 12, 2010. 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: As you may know, Fox News has hired Governor Sarah Palin to do news analysis. That has thrown the left-wing media into a conniption.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Isn't Sarah Palin going to work for Fox News like just a godsend to anybody who wants to have comedy on the radio?
UNIDENTIFIED MALE: She had a pesky little problem with the truth. No irony that day these headlines came out. Fox News snatches her up.
UNIDENTIFIED MALE: Maybe she'll like being a pundit on Fox News. But the time we picked her...
UNIDENTIFIED MALE: How could she be a pundit? She doesn't know anything.
UNIDENTIFIED MALE: Unfortunately, there's just going to be one more ignorant right-winger at Fox News.
(END VIDEO CLIP)
O'REILLY: Now here's how dumb that comment is. "The Factor" beat CNN 5 to 1 at 8:00 p.m. and we expect that to increase with Sarah Palin on board. Somebody tell Mr. Begala.
Here now is the governor, whose best-selling book "Going Rogue" continues to dominate the best-seller lists across the country.
At this point, you know, we talked about this last time you were in here. It's almost funny that these people feel that you're such a threat to them. It's almost amusing, is it not?
SARAH PALIN: Well, I'm grinning today, and I'm so appreciative of the opportunity to get to work with you and the other team members here at Fox News to provide the fair and the balanced reporting and analysis that voters in this country deserve.
O'REILLY: Well, obviously, you know, folks are watching Fox News far more than they watch these pinheads...
O'REILLY: ...that comment negatively on you. But it's the threat that I don't get. You're the governor of Alaska, the former governor of Alaska, former vice presidential candidate. You're a politician. You're a mom. You're an American.
O'REILLY: What's the threat? What — I mean, I'm not feeling it here, Governor. I'm not feeling a threat from you here. Tell me what the threat is.
PALIN: Well, see, obviously it's — it's not about me. It's not about me personally, who I am from up there in Alaska.
O'REILLY: Yes, but they're going after you personally.
PALIN: They don't like the message. They don't like the common sense conservative solutions that I think I represent and I articulate as I explain what I believe are some solutions to the great challenges facing America. They don't like to hear it.
O'REILLY: It's true. That's true, but there are a lot of conservative politicians giving that message, and none of them are as attacked personally, as vehemently as you are. And that's just a fact.
Now, President Obama's poll numbers sinking. I think it's the unemotional response to terror, as I said, and the health care debacle. Anything else in play?
PALIN: Of course they're sinking. It was just a matter of time before more of that reflection of the people's uncomfortableness that they feel towards this administration is manifesting in these poll numbers. There is an obvious disconnect between President Obama and the White House, what they are doing to our economy and what they are doing in terms of not allowing Americans to feel as safe as we had felt and people finally saying, "You know, this is not the representative form of government that we thought that we had voted in." After a year of time, people are saying, "No, we want the White House, we want President Obama to hear from us. We want these common sense solutions with health care, with jobs, with the economy, with the war on terror to be implemented so we can get back on the right track."
O'REILLY: But isn't it true that no human being could lower the unemployment rate at this point? I mean, I don't like the massive spending. I think it's going to bankrupt the nation. But I — you know, I'm saying to myself, "If Sarah Palin and John McCain were in, could they bring unemployment down under 10 percent?" And I'm not sure you could.
PALIN: If the question is can any individual politician change the job forecast outlook, no. But what government can do is get out of the way of the private sector being able to seize opportunities to grow and to thrive and prosper and hire more people. You do that — a politician, a policy does that by reducing taxes on the job creators, by getting government out of the way of the private sector.
Let's talk about health care for a minute. When we consider that the White House wants to take another one-sixth of our economy, take it from the private sector hands, take it over and put it in government's hands, that's another step towards greater unemployment numbers. It's another step towards greater growth of government, which is the wrong track.
O'REILLY: Well, that's what they want.
PALIN: It's the complete opposite of...
O'REILLY: And — but, remember, they won. They won on that.
PALIN: ...where we should be going.
O'REILLY: Everybody who voted for Barack Obama, if they were paying attention, knew he was a big government liberal. So, you know, the folks are getting what they deserve.
PALIN: There were promises made though that he made that he is not keeping, obviously.
O'REILLY: There are always — there are always promises. You know that.
PALIN: I think — it's a more glaring situation today, though, than we have seen in past administrations. There were such — such — such clear promises, such blatant promises (inaudible) like C-SPAN...
O'REILLY: Like C-SPAN going health care coverage?
PALIN: Like a bipartisan approach to finding the solutions to health care.
O'REILLY: That went pretty bad, I have to say.
PALIN: Those were bad.
O'REILLY: Do you know Nancy Pelosi? Have you ever met her?
PALIN: I met her once in the Capitol building, yes.
O'REILLY: Yes? Did you have...
PALIN: She wouldn't remember me, but...
O'REILLY: She wouldn't — I think she'd remember you, Governor.
PALIN: No, no, no.
O'REILLY: But did you chat with her? Do you have any idea?
PALIN: Chatted with her a little bit, yes. She was leading a group of school children through on a tour. And I thought, well, that's nice that she has that time on her hands that she could do that.
O'REILLY: Yes, but the school children need to be led. You know that.
PALIN: Yes, that's what I'm saying. It was nice.
O'REILLY: Now, do you think that she's a kook?
PALIN: I think that she, too, is quite disconnected from what her constituents are telling her — and constituents all over the country.
O'REILLY: But she's a San Francisco liberal. But — but do you think she's actually crazy?
PALIN: I doubt that her San Francisco constituents even are enamored with her policies and with the — the guidance that she is providing this country today.
O'REILLY: Is she — is she further to the left, in your opinion, than Barack Obama?
PALIN: Perhaps so, yes. Yes.
O'REILLY: Yes? All right. Now, Harry Reid gets in trouble with the Negro dialect remark and the light skin color.
O'REILLY: I — what would you — say, I'm Harry Reid, OK?
O'REILLY: And say — no, I'm not going to say that. Say I'm — what would you say to me?
PALIN: Well, obviously those were — you can't defend those comments.
O'REILLY: But he's sorry. He's sorry. Is that enough?
PALIN: Well, he says he's sorry. That — that way of thinking is quite foreign to, I think, most Americans today. I — I come from a...
O'REILLY: Do you think it was a racist statement?
PALIN: I come from a very diverse state. My family is diverse. I'm married to an Alaska native. A lot of us don't think along those lines that somebody's skin tone would be criteria for a qualification for the presidency. So his — his thinking and his articulating of that — that thought was — is quite perplexing. It's quite unfortunate. And I think it's unacceptable.
O'REILLY: Do you think it was racist?
PALIN: I don't believe that he's a racist. But I don't believe that Trent Lott was a racist, either. And that double standard...
O'REILLY: No, we did that last night. Right.
PALIN: I know. And that double standard is — and that hypocrisy is another reason why so many Americans are quite disgusted with the political games that are played, not only on both sides of the aisle, but in this case, on the left wing, what they are playing with this game of racism and kind of letting Harry Reid's comments slide, but having crucified Trent Lott for essentially along the same lines (inaudible).
O'REILLY: Last time you were here I asked you about Iran. And that's coming down the pike now real fast.
PALIN: Yes, yes.
O'REILLY: I mean, this is the under-reported story. We're keeping a very close eye on it. But in the next few weeks Barack Obama is going to have to do something with Iran.
PALIN: Yes, he is.
O'REILLY: What would you do?
PALIN: Well, the — the time for talking about sanctions — I think we've passed that. Even the last couple of weeks we have passed that. And we need to follow through on those financial terms that are favoring some Iranian businesses and Iranian regimes.
O'REILLY: But you figure that they're doing that, right?
PALIN: No, I don't think that they are doing it or we perhaps would see some...
O'REILLY: Would you attack them? Would you let Israel attack them?
PALIN: I think that we can still head in that direction of the financial sanctions and the sanctions on petroleum, the refinery projects.
O'REILLY: Right, so you haven't changed your opinion?
PALIN: No, I haven't changed my opinion, except to say we've talked about it enough. You and I have talked about it.
O'REILLY: Yes, we talked about it last time you were here.
PALIN: Weeks ago. And there has been no change, except for change for the worst. So, no, now the time for talking — that's enough. We want to make sure that we and our allies are following through now on those threats of sanctions.
O'REILLY: If they don't do — if they don't do it, though, should we attack? If the Iranians don't stop their nuclear program, should we attack?
PALIN: I think that obviously we need to adhere to those sanctions, those threats that we made at first.
O'REILLY: All right. So you're not ready to say we've got to get them if they don't?
PALIN: I — an attack — a military attack needs to be our very, very last option.
O'REILLY: OK. Right, but it's coming down. It's getting close.
PALIN: Yes, well...
O'REILLY: The Israelis are getting very, very close.
PALIN: Well, what I would like to see the Obama administration do, though, is convince Americans that they would be willing to do anything, anything that needs to be done to protect America and her allies, to protect Israel.
O'REILLY: So to start preparing them?
PALIN: Absolutely, protect...
PALIN: And we want to know that.
O'REILLY: We're going to have more with the governor in a moment. We're going to hold her over because I do have some other foolish questions to ask her, and we appreciate your patience very much.
O'REILLY: Continuing now with our newest contributor on Fox News, Governor Sarah Palin.
Now, why do you think "60 Minutes" — you know, "60 Minutes" spent eight minutes on you last Sunday night? You know, they have this new book out that they were interviewing the authors and stuff like that. And there's a lot of, you know, stuff in the book about McCain, about Biden, Edwards. But it was eight minutes about you.
PALIN: Anything about Obama?
O'REILLY: A little bit, but not a lot. Not a lot, you know. But Obama has been on that show. He was on like — he's one of the co- contributors. It's I'm Steve Kroft, I'm Barack Obama. He's on like every week.
PALIN: There you go. Yes, right.
O'REILLY: OK. I want to run you two clips from that show and have you react. The first one is from one of the authors of the book "Game Change," John Heilemann. Roll the tape.
(BEGIN VIDEO CLIP)
JOHN HEILEMANN, CO-AUTHOR, "GAME CHANGE": She still didn't really understand why there was a North Korea and a South Korea. She was still regularly saying that Saddam Hussein had been behind 9/11. And literally the next day, her son was about to ship off to Iraq and when they asked her who her son was going to fight, she couldn't explain that.
(END VIDEO CLIP)
O'REILLY: That's pretty nasty, isn't it?
PALIN: Well, it's pretty made up, too. I — I think that these reporters — who were not in any part of what I was doing there as a VP candidate, I think I explained a lot of this in "Going Rogue," in my book.
O'REILLY: Is he...
PALIN: I was there...
O'REILLY: Is he lying?
PALIN: They were not there.
O'REILLY: Is this guy lying? He says you don't know the difference between North and South Korea.
PALIN: Yes, that surprised me. I hadn't seen the "60 Minutes" and I — I had been warned, you know, don't — don't watch. It's a bunch of BS from Schmidt (INAUDIBLE) and those guys...
O'REILLY: Is that a lie though?
PALIN: Yes, that is a lie.
PALIN: That is a lie.
O'REILLY: Was it a lie that you thought Saddam Hussein was behind 9/11?
PALIN: You know what, on that, I did talk a lot to Steve Schmidt about the history of the war and about where, perhaps, the 9/11 terrorists came from and could there have been any connection to Saddam.
O'REILLY: OK, so that's...
PALIN: So I admit that I asked questions about it.
O'REILLY: ...that's not a lie but it's — right. But you didn't — you weren't blaming 9/11 on Saddam Hussein?
PALIN: No. No, no, no.
PALIN: And yes, so...
O'REILLY: And the shipping out of your son to Iraq, you didn't know why, that's a lie?
PALIN: See the — these reporters were not there. And I think that these are the political establishment reporters who love to gin up controversy and spin up gossip. The rest of America doesn't care about that kind of crap. It's...
O'REILLY: I agree with you. I agree with you.
PALIN: The rest of America, we are concerned about a 10 percent unemployment rate...
O'REILLY: But they want...
PALIN: ...a 17.3 percent underemployment rate...
O'REILLY: They want to know what's true and what isn't.
O'REILLY: They do.
PALIN: They need to read my book "Going Rogue" then.
O'REILLY: Right. And when this guy said Sarah Palin didn't know the difference between North and South Korea, I went, that can't be true.
PALIN: Maybe these are the same guys, though, who are saying that, you know, some of the other tin foil hat controversy and conspiracy theory stuff.
O'REILLY: Look, this guy is a writer for New York magazine.
PALIN: But who knows who these guys are?
O'REILLY: It's a left-wing magazine...
PALIN: I don't know who they are.
O'REILLY: Well, OK.
PALIN: I — I don't think I've — that I've ever met these guys. They didn't interview me for the book.
O'REILLY: Now, Steve Schmidt, not your best friend. He was a big shot in the McCain campaign. He also was interviewed in the "60 Minutes" piece. Roll the tape.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The authors say she hit bottom trying to prepare for her vice presidential debate. The person in charge of her debate prep made a desperate call to Steve Schmidt.
UNIDENTIFIED MALE: He told us that the debate was going to be a debacle of historic and epic proportions. He told us she was not focused, she was not engaged, she was really not participating in the prep.
(END VIDEO CLIP)
O'REILLY: Now, to be fair, Schmidt later on said that McCain would have lost bigger had you not been on the ticket. However, he's obviously saying that you were in chaos preparing for this debate. Is that true?
PALIN: That — that is not true. And Steve Schmidt told us how overjoyed he was after the debate, so pleased with the way everything turned out, as he was after the convention...
O'REILLY: Was there a time...
PALIN: ...as he was for (INAUDIBLE).
O'REILLY: ...when you almost felt overwhelmed though?
PALIN: No, I always felt pretty calm through the whole experience.
O'REILLY: So is Schmidt lying or is somebody lying to him?
PALIN: I think he's basing this on an anonymous source. So all that kind of gossipy anonymous accusations, I really don't pay it any mind, because, again, Bill, I know what's important. I know what the priorities are...
O'REILLY: I know that, but you know, Governor, the perception of you is that you're not that smart. That's what "Saturday Night Live" trafficked in, that's what the liberal media traffics in. You heard Chris Matthews go, "She doesn't know anything." That's why I want to clear this up. That's why I'm asking you these questions, because the audience, I believe, "The Factor" audience likes you. They want you to be treated fairly. So I have to ask questions is, is that a lie? And, now, I think the proof is in the proverbial pudding, to use a cliché. You did very well against Biden in that debate, although you did call him O'Biden at one point.
PALIN: I did. But I think the analysis after the debate was a surprise that Biden had more gaffes — had — had more mistakes made...
O'REILLY: You — you held your own with him...
PALIN: So I felt good about it.
O'REILLY: ...every — even in...
PALIN: Steve Schmidt felt great about it.
PALIN: So these new revelations...
O'REILLY: You did fine.
PALIN: ...of the chaos...
PALIN: ...or the frustration are alarming; quite irrelevant though to what is important in this world today.
O'REILLY: I got your point. But it isn't irrelevant to this way. You now have a — you now have a forum here at Fox News, OK, that you can immediately neutralize "60 Minutes"... (SNAPS HIS FINGERS)… like that. And I...
PALIN: And the American people are immediately neutralizing outlets like "60 Minutes." Look at the numbers of the networks...
O'REILLY: But they want to hear from you about it though...
O'REILLY: They — they want your...
PALIN: But more and more Americans are looking at some of these networks, that biased journalism, and they're saying, nah, that gig is up, we're not believing that stuff anymore...
O'REILLY: But you (INAUDIBLE)...
PALIN: And that's why they're tuning into Fox News.
O'REILLY: I like "60 Minutes." I think they're — they're honorable people.
All right, finally, you're going to do a Tea Party event...
O'REILLY: ...in Nashville, Tennessee...
PALIN: I can't wait.
O'REILLY: ...in February, right?
O'REILLY: Now, I predicted that you may run on the Tea Party ticket in 2012.
PALIN: Well, there is no Tea Party ticket...
O'REILLY: Yes, but there could be.
PALIN: But I am so thankful for this Tea Party movement, for people having a place for their voice to be heard. I can't wait to do this event. And there are a lot of Tea Party events...
O'REILLY: You're the keynote here, right?
PALIN: I believe that I am the keynote.
PALIN: There will be other speakers, too, though. But I can't wait to get to hear from those who are so concerned about our economy and about our national security issues and share with them what I believe the solutions are.
O'REILLY: They'll love you at the Tea Party, boy…
PALIN: Well, I...
O'REILLY: They will love you.
PALIN: ...I can't wait to be there. And, you know, there's always the — that controversy, it seems, surrounding whatever it is that I...
PALIN: ...that I announce that I'm going to do. There's controversy involved in this one, because the Tea Party offered me a speaking fee. I will not financially be gaining anything from this.
O'REILLY: You should though. You have a family to support.
PALIN: I'm going to...
O'REILLY: Take the money.
PALIN: You know what's more important? More important than money in my pocket from an event like that is being able to turn it right back around and contribute to campaigns, candidates and issues that will help our country.
O'REILLY: Good. All right. Kill the music for a minute. I've got one more for the governor. I can't let her go without this. So how was the first interview on Fox News as a contributor?
PALIN: I couldn't ask for anything better. I was with the big man on campus.
O'REILLY: And who is that?
PALIN: Bill O'Reilly.
O'REILLY: I thought it was Todd. Todd's sitting over there. He's the big man on campus, not me. Hey, listen, Governor, it's a pleasure to have you. We're all very, very happy that you're on board with us. And again, any time you want to set the record straight, we're here.
PALIN: Oh, we'll be doing a lot of that.
O'REILLY: All right.
O'REILLY: Governor Palin, everybody.
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