This is a RUSH transcript from "The O'Reilly Factor," March 1, 2010. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Impact" segment tonight: "The Factor" prides itself on being out front in many of the national discussions, and last week we spent some time on an interesting question: Is President Obama a socialist? Well, on Sunday, Senator McCain was confronted with exactly that question.

(BEGIN VIDEO CLIP)

DAVID GREGORY, HOST, "MEET THE PRESS": Do you think that goes too far? Is it a socialist agenda from the president?

SEN. JOHN MCCAIN, R-ARIZ.: There is no doubt in my mind America's a right-of-center nation, and this administration is governing from the left. That's why the president's approval ratings continue to decline.

GREGORY: But my question was, do you think that kind of — because have you heard that description before. Not just from J.D. Hayworth, but others. Does it go too far to say the president's agenda is a socialist agenda?

MCCAIN: I think I gave my description. I think they're governing from the left on a broad variety of issues, but I'll let others speak for themselves. I have enough time taking care of my own misstatements.

(END VIDEO CLIP)

O'REILLY: Joining us now from Washington to react, Fox News analyst Mary Katharine Ham, and here in the studio, Juan Williams.

So we talked about this last week. We don't want to be repetitive, but you know, this is getting traction since "The Factor" broke this — it was actually broken on talk radio. And they didn't like that I wouldn't call him a socialist. And now McCain won't call him a socialist. But if he is a socialist, it's possible, right, would you say it's possible?

JUAN WILLIAMS, FOX NEWS CONTRIBUTOR: Possible?

O'REILLY: Yes, it's possible.

WILLIAMS: Well, you defined it last week. You said the taking property, confiscatory…

O'REILLY: He's not doing that now, but is it possible…

WILLIAMS: He's not doing that.

O'REILLY: …deep within his heart that he is?

WILLIAMS: That's possible.

O'REILLY: Possible. That's possible.

O'REILLY: Right? But it would explain why this crazy spending that Hume and I just talked about is not being really dealt with by the Obama administration because he says, well, look, I want the government to run the economy and everything else, and then down the road, I'm going to tax people up to here and get the revenue to pay for it. That would explain it, would it not?

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WILLIAMS: How about this as an explanation that the country was almost going into Depression, and that you had to do things like bail out Goldman Sachs and all these big Wall Street firms. Sounds to me like that's a capitalist supporting capital institutions…

O'REILLY: OK, that's the Obama administration…

WILLIAMS: …and costing us money.

O'REILLY: Right.

WILLIAMS: OK.

O'REILLY: That's a POB. We had to spend 12 percent more.

WILLIAMS: Right.

O'REILLY: And record spending to keep us all from sliding into the ocean. But remember, most of that bailout money has been paid back.

WILLIAMS: No. Some of it.

O'REILLY: Most of it.

WILLIAMS: Some of it, Bill. But the money hasn't been put back in the Treasury. It's still sitting around, TARP money and the like. Plus, we've got two wars going, right. And previously, those wars, the cost of those wars was not on the books.

O'REILLY: All right, but projected out, it's bankruptcy.

WILLIAMS: Yes. That's true.

O'REILLY: There's no way this country can avoid it.

WILLIAMS: That's irresponsible.

O'REILLY: But you don't hear Barack Obama saying I see it and I'm going to stop it. I'm not going to be like Arnold Schwarzenegger. We're going to stop it. You know, do you hear that?

WILLIAMS: Well, yes, he said, you know what? In the recent budget and so forth, he says we've got to cut the…

O'REILLY: We got to, but he never says how.

WILLIAMS: No, he has a point.

O'REILLY: He appointed panel.

WILLIAMS: And he never takes responsibility.

O'REILLY: Are you on that panel by the way?

WILLIAMS: Am I on the panel?

O'REILLY: Yes.

WILLIAMS: Could be, you know.

O'REILLY: You're pretty soft on Obama.

WILLIAMS: Oh, stop.

O'REILLY: You know what? Look, he's got to — he is saying that he's going to take responsibility. But you know what? He's putting it off to the next president. He's talking about 2018, 2020.

O'REILLY: Well, when he's 85, he'll take responsibility.

All right. Mary Katharine, I know you're straining at the bit to get in here. Go ahead.

MARY KATHARINE HAM, FOX NEWS CONTRIBUTOR: Look, I mean, as far as socialist goes, I prefer the term creepy status. That's kind of where I think the…

O'REILLY: Creepy status?

HAM: You don't really…

O'REILLY: What is that?

HAM: He's a status kind of guy. I don't use the term socialist. I think it actually sort of turns people off. And if you start using that word, they don't want to listen to you about what Obama's actually doing, which, in some cases really is problematic for people at home. And I'd rather explain those things than get into like a sort of semantics argument.

O'REILLY: All right. Give me your best shot though. What is he doing vis-a-vis the spending and bankruptcy scenario?

HAM: Well, we've always had an entitlement problem, something I've been attuned to since a young age. But a lot of people don't know about it, don't recognize, but it was brave of Bush to tackle Social Security, even though it didn't work. And what — here's the problem. What people don't buy is Obama's argument that he's going to fix entitlements and spending by spending more and adding more entitlements. They just don't buy it, because it doesn't make sense. And he's living in this Washington liberal world, where he can use fake money. And you just can't forever and ever and ever.

O'REILLY: All right.

HAM: And the American people are realizing that, and they're calling him on it.

O'REILLY: As I said in the "Talking Points," and we want everybody to understand this, we want health care reform. It's badly needed in this country, OK? But we can't afford it. The way it is now, no way. So Mary Katharine, does Pelosi have the votes? Brit Hume said no. She does not have them as it stands now. Do you agree with that?

HAM: I agree at this point. I also would not underestimate Nancy Pelosi. She can get votes when she needs them. And when it comes down to it, Democrats might say, hey, you know, we really need to just throw it all on the line for this, because we've already voted for it once. But it is getting harder and harder. You've got resignations in the House on the Democratic side. You've got Cowell, the one Republican who voted for it, saying he won't vote for it again. So this is a serious uphill battle.

O'REILLY: Oh, yes, look, that's the drama. Does she have the votes?

WILLIAMS: Yes, she's going to get the votes.

O'REILLY: You're positive?

WILLIAMS: Look, the deal is that they've got to go back and make sure the abortion language works. And the big issue right now is who goes first, Senate or House?

O'REILLY: Well, Senate will pass, because they will ram it through somehow.

O'REILLY: Right.

WILLIAMS: But no, no, no. They want the House to go first. The Senate people want the House. The House wants the Senate.

O'REILLY: No, I know that, I know that. But the — whatever happens in the House, the Senate would pass it. So nobody should be under the false illusion the Senate would hold it up.

WILLIAMS: Right, they're not.

O'REILLY: But the House will. I'm going to say you're wrong. But here's a wild card. President Obama is going to come out this week and scale it down.

WILLIAMS: Correct.

O'REILLY: He's going to scale it down. So we really don't know how big it's going to be. But it's got to be big to get 30 million Americans on the rolls. It's got to be big?

WILLIAMS: It could be smaller. So wait a minute, why did you just say I was wrong? You just told…

O'REILLY: No, as it stands now. As it stands now…

WILLIAMS: …the people the deal.

O'REILLY: …she doesn't have the votes.

WILLIAMS: Yeah, OK, but they're going to scale it back.

O'REILLY: (INAUDIBLE) no.

WILLIAMS: They're going to do scale it back.

O'REILLY: Right.

WILLIAMS: And they're going to do things…

O'REILLY: Right.

WILLIAMS: …like give Republicans cross state lines insurance…

O'REILLY: Tort reform.

WILLIAMS: Tort, they're going to do these things. Right.

O'REILLY: But it still comes down to the money, comes down to the expenditure.

WILLIAMS: No, but you know what? Here's the argument. Let's make sure we do something because this is Obama talking to Democrats.

O'REILLY: Right.

WILLIAMS: Do something, otherwise we'll have worse losses in the midterms. And so we've got to get something done. This is life or death.

O'REILLY: All right, last word, Mary Katharine. 20 seconds, go.

HAM: Well, I think it's interesting that Obama's going to come out, what, with another giant health care speech to sell this on Wednesday. I'm not sure how that's going to work. And it might mess up the process that Pelosi and Reid are already working with, which is very delicate. I don't think it's going to be small enough to make people happy about the spending. It's just he's on a whole different plain from the American people on this.

O'REILLY: OK.

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