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This is a RUSH transcript from "The O'Reilly Factor," May 6, 2010. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Personal Story" segment tonight: Today is a National Day of Prayer. It has been endorsed by President Obama. But there are legal challenges all over the place, and that, of course, is dumb. The Constitution clearly states the government cannot impose religion on citizens, but setting aside a day to encourage expression of voluntary spirituality is in no way an imposition.

Now, a few weeks ago Sarah Palin said this:

(BEGIN VIDEO CLIP)

SARAH PALIN, FORMER GOVERNOR OF ALASKA: For any leader to declare that America isn't a Christian nation and poking an ally like Israel in the eye, it's mind-boggling for — to see some of our nation's actions recently.

(END VIDEO CLIP)

O'REILLY: All right. The governor joins us now. So why do you think America is a Christian nation?

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SARAH PALIN, FOX NEWS CONTRIBUTOR: I have said all along that America is based on Judeo-Christian beliefs and, you know, nobody has to believe me though. You can just go to our Founding Fathers' early documents and see how they crafted a Declaration of Independence and a Constitution that allows that Judeo-Christian belief to be the foundation of our lives. And our Constitution, of course, essentially acknowledging that our unalienable rights don't come from man; they come from God. So this document is set up to protect us from a government that would ever infringe upon our rights to have freedom of religion and to be able to express our faith freely.

O'REILLY: OK.

PALIN: So it's ironic that here on the National Day of Prayer, you know, there's so much controversy about whether or not we're a nation that's built on Judeo-Christian beliefs and whether or not we can even talk about God in the public square is absolutely nonsense what we are hearing.

O'REILLY: All I have to do is walk into the Supreme Court chamber and you'll see the 10 Commandments. And so we know that you're absolutely correct. The Founding Fathers did base not only the Declaration of Independence but the constitutional protections on what they thought was right and wrong. And what they thought was right and wrong came from the 10 Commandments, which is Judeo-Christian philosophy. That is beyond a reasonable doubt.

But here is what's happened. America has, as they say in California, evolved. And now we're a much more secular nation than we were back in 1776. So the opponents of spirituality in the public marketplace say, "Hey, this is a violation. We can't be pushing any kind of spirituality." And you answer?

PALIN: Well, that new kind of world view that I think is kind of a step towards a fundamental transformation of America that some want to see today, I think, again, that it is an attempt to revisit and rewrite history. I think we should kind of keep this clean, keep it simple, go back to what our founders and our founding documents meant. They're quite clear that we would create law based on the God of the Bible and the 10 Commandments. It's pretty simple. I think what's missing in...

O'REILLY: What do you say, though — what do you say to the people in Chinatown and San Francisco and here in New York and other big cities, the Asian-Americans who come from a different religious culture? Do they not participate in the Judeo-Christian tradition? I mean, they don't believe it. They believe in something else.

PALIN: We get to say to them, "Yay, welcome to America, where we are tolerant and you have a freedom to express whatever faith. You can participate peacefully in whatever religion that you choose. That's what America is all about."

And we would ask though that there be respect by our courts. Look at Judge Crabb and this ridiculous ruling or her opinion that's come down that says the National Day of Prayer is unconstitutional. We would ask that there would be respect for what the Judeo-Christian beliefs are, too. It's mutual tolerance.

O'REILLY: What do you think drives — what do you think drives Judge Crabb, who I agree with you is desperately wrong? Again, there is no imposition of religion on a voluntary National Day of Prayer. It's just encouraging people to be spiritual. You can pray to a tree. You can be a Deist. I mean, you know, Founding Fathers, some of them were.

PALIN: Yes.

O'REILLY: So there's no imposition. So what drives a Judge Crabb to say, "Hey, this should be illegal"? What do you think drives that?

PALIN: You know, you wonder what in hell scares people about talking about America's foundation of faith, and you wonder why in the world would she rule as she's ruled. And I guess she'll further explain herself.

But every state Constitution acknowledges God, because every state Constitution, which backs up our U.S. Constitution, can acknowledge that our unalienable rights came from God not from man.

O'REILLY: Why would Crabb do that? You must have thought about it. Why would Crabb do it? What does she want to accomplish by this?

PALIN: It is that world view that, I think, involves some — some people being afraid of being able to discuss our foundation, being able to discuss God in the public square. That's the only thing I can attribute it to, is some fear of some people.

But look at our national motto, "In God We Trust." How inconsistent, then, to be told that we, on a National Day of Prayer, which, as you point out, isn't any kind of mandate or any kind of force for anybody to believe any certain thing, but how inconsistent to say that though in the public square we cannot talk about or talk to that God that is in our national motto.

O'REILLY: Yes, we can only trust in the God inside our own homes, but once we get out, we can't trust him.

All right, Governor, always good to see you.

PALIN: Bill — Bill, OK, hey, we also need to remember though Margaret Thatcher and other foreign leaders and foreign observers thinking America is such a great and exceptional nation because we do base our lives, our values on the God of the Bible, the Old and the New Testament.

O'REILLY: All right.

PALIN: If they can observe it, we should.

O'REILLY: We appreciate you coming on.

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