This is a rush transcript from "Hannity," July 7, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: For 79 days oil has been flooding into the Gulf of Mexico and conditions on the ground appear to be getting much, much worse. Now there is stunning reports tonight that oil has now surfaced in Lake Pontchartrain located just north of New Orleans.

Now this development has dealt a stunning psychological blow to residents of Louisiana who are scrambling to limit the environmental and economic damage of the spill.

But the Obama administration appears more interested in containing the press than they are with containing the oil. A reporter with CBS News was recently told that if she and her camera crew did not stop filming near Venice, Louisiana, they'd be arrested.

Take a look.

(BEGIN VIDEO CLIP FROM CBS NEWS)

UNIDENTIFIED FEMALE: This video was shot by the local parish government in South Pass. When we tried to reach the beach seen here covered in oil a boat of BP contractors with two Coast Guard officers onboard, told us to turn around, under threat of arrest.

UNIDENTIFIED MALE: This is BP's rules. It's not ours.

(END OF VIDEO CLIP)

HANNITY: Now in addition, the Washington Examiner is reporting that the White House sent two officials to meet with Plaquemines Parish president, Billy Nungesser. According to Nungesser, their mission was to try to stop him from publicly criticizing the administration.

So it looks like the Chicago way is now taking over all along the Gulf Coast.

Joining me now with the very latest on this disaster are Kate Obenshain from the Young America's Foundation. From the Fox Business Network, Sandra Smith.

First of all, how stupid is this? They think in Texas, in Alabama, in Louisiana, in Florida they're going to stop the press?

KATE OBENSHAIN, YOUNG AMERICA'S FOUNDATION: Apparently they do. They're doing this again and again. And they just — CNN just had a report —

HANNITY: What do you mean CNN? Who are they?

OBENSHAIN: OK, they are righteously indignant which is shocking, even the mainstream media is getting upset about the Obama administration cracking down. But they're saying now that you can't get within 65 feet of a boom or —

SANDRA SMITH, FOX BUSINESS NETWORK: It's a felony and you — jail time and a $40,000 fine.

OBENSHAIN: $40,000.

SMITH: So they're actually trying to implement this just as much as the restriction of the air space. They also told media nobody can fly within 3,000 feet of any of the oil spill, Sean. This isn't the first time that we've seen them try to keep us out of it.

HANNITY: I find this amazing. First of all the oil is coming onshore.

SMITH: Yes.

HANNITY: First of all, we're in 79 days. Now I find this amazing. Apparently the president is so busy he's not going to stop until this oil spill stops. Well, he's going to spend four days in Vegas this week.

You know, how many concerts has he been to? How many sporting teams has he had at the administration? How many times has he played golf?

OBENSHAIN: Right.

HANNITY: How many times has — I'm going to focus like a laser beam. And they're doing nothing.

SMITH: And now they're trying to stop Billy Nungesser from talking — the Plaquemines Parish president — when all he's said, Sean, is he said, "I've had to spend more of my time fighting the federal officials than I have fighting the oil spill."

That's the sentiment felt by all their people down there.

OBENSHAIN: And their line to him was, "What do we have to do to keep you off of TV?" He said, "Send me the help that I need." So they sent something like two skimmers down just to shut him up. That's what they've been doing.

HANNITY: What do I have to keep you off TV — why? Because they don't want somebody actually calling attention to the fact —

OBENSHAIN: Right.

HANNITY: This thing is still spewing oil.

SMITH: And now it's in Lake Pontchartrain. I can tell you, Sean, I lived in Louisiana for many, many years. Spent a lot of time on Lake Pontchartrain. It finally got that lake cleaned up. It is no small lake.

HANNITY: Yes.

SMITH: Six hundred thirty square miles. People fish in it there. They boat on it.

HANNITY: Not anymore.

SMITH: They swim in it, they build hotels around it, restaurants are built on it. This is another blow to the good people of Louisiana and the tourism.

HANNITY: We already saw on the July Fourth weekend that, you know, tourism was off on all of the Gulf beaches. You know, you get this glob — look at that glob of oil on the screen right now. Look at this.

OBENSHAIN: Well, you know, we're hearing about town after town, Florida now, there are stories of all these towns that coming up with these plans for how to stop the oil from coming onshore but it's taking weeks and weeks for the federal — for command and control to give them the OK on it.

HANNITY: I spoke to Governor Bobby Jindal for 25 minutes and he is absolutely beside himself.

SMITH: Yes.

HANNITY: Livid. Because every single solitary effort that they could have implemented from day one, the federal government resisted.

SMITH: Why is the oil now getting into the lake? Why wasn't there a plan in place to stop this? They put a couple of barges there in the stream to try to stop this. But then you get a few winds from the tropical storm and all of a sudden you've got oil in the lake now.

OBENSHAIN: And why not —

SMITH: There's no plan.

OBENSHAIN: — streamline the bureaucracy? Why not allow the localities who are coming up with these great ideas to implement it instead of having to go through BP officials, through the Coast Guard officials?

HANNITY: Wait a minute. This is — you've got to have enough life boats on or life vests on them to stop —

OBENSHAIN: Exactly. And fire extinguishers —

HANNITY: Fire extinguishers.

OBENSHAIN: — before you send skimmers out.

HANNITY: Yes.

OBENSHAIN: This is why government —

HANNITY: Well —

OBENSHAIN: This is a great example of why government doesn't solve these problems.

HANNITY: It was day 71. There were 30 plus countries that offered assistance and help, and skimmers, and booms, and assistance to build barriers. All of which was rejected. Now — 13 of the 30 countries they finally said, day 71, all right, we'll accept your help. Isn't this too little too late? And —

SMITH: And now the problem is they've got all this boom laying in the water covered — soaked with oil, needing to be picked up.

OBENSHAIN: Because it hasn't been cleaned off.

SMITH: So what are they telling you? You're already restricted. The boom is already about 40 feet — 40 feet out. Now they're telling you you can't be in a certain distance of even that? There's going to be no pictures any more. There's going to be —

OBENSHAIN: They don't want anybody to see it.

SMITH: — no pictures of the birds, the marshes.

OBENSHAIN: Absolutely.

SMITH: They don't want anybody to see it, Sean.

HANNITY: I'm going to tell you something: There's no way that they're going to be able to stop the public from seeing —

OBENSHAIN: Oh no.

HANNITY: And their level of incompetence.

OBENSHAIN: You have the press and you have officials who are saying, "I'm willing to go to jail over this." This is too important —

HANNITY: I'm willing to go to jail.

OBENSHAIN: And it's too important for people to know what's going on and for us to just start solving problems.

SMITH: There's nothing worse for the people of Louisiana to not know what's going on. And if they're going to try to prevent the press, the people will get around it.

OBENSHAIN: Look, we have a First Amendment. This is just clear trampling of that right. So much for transparency.

HANNITY: What I'm trying to understand — we're 108 days out of an election. This is what I'm trying to understand. I mean —

OBENSHAIN: Yes, it is —

HANNITY: Why not solve the problem? Instead of going to Vegas and hanging out, raising money for Harry Reid and Barbara Boxer, and going to concerts and ball games and sports pictures, and the golfing — why don't you go down there, roll up your sleeves, set up shop, say I'm here to help.

SMITH: Send in his wife now.

OBENSHAIN: You know, you hate to look at it from —

HANNITY: OK. That sounds really comforting.

OBENSHAIN: You hate to look at it from a political perspective, but this is just yet another inept to move. I mean go down there. Right now he has 38 percent approval among independents. That has something to do with that.

HANNITY: But isn't that surprising considering they did run a fine campaign —

OBENSHAIN: They ran a brilliant campaign.

(CROSSTALK)

HANNITY: He read his teleprompter. People faked it and it worked.

OBENSHAIN: Because be thinks he's invincible. He thinks nobody is going to check, nobody's going to know what he's doing.

HANNITY: No, I think it's different. You know what I think it is? I think he — no. I believe that, too, but I believe —

OBENSHAIN: It's the Chicago way.

HANNITY: He also likes the idea of being president.

OBENSHAIN: Oh, he does.

HANNITY: He likes the idea of people fainting. But the actual work and governing on the economy on important stuff like creating jobs and solving this annoying problem, it's beneath him.

OBENSHAIN: You know, I think there's a lot of stuff that we don't know going on. I think that we're — that they are keeping the media at arm's length for a reason. Because it's — probably there are a lot of things that they don't want us to know.

SMITH: And another thing we don't know is who's telling all these officials from BP and the Coast Guard not to let the press in? Who's tell them to do that?

OBENSHAIN: Clearly the White House.

SMITH: Thad Allen, he already responded. He said it wasn't BP telling them to do this. This decision is from the White House.

OBENSHAIN: And the mainstream media is still blaming Thad Allen. That part is almost comical. This White House has had an iron grip over everything that is happening, so nobody can say they don't have control.

HANNITY: Every day that passes and more oil that shows up on shore, people are getting they are incompetent. Absolutely, it is a disaster.

OBENSHAIN: More than incompetent, they are trampling basic rights.

HANNITY: They are trying to, but we are here.

OBENSHAIN: People are willing to go to jail to say, forget it —

HANNITY: Guys, thank you for being here.

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