Updated

This is a rush transcript from "Hannity," August 4, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Former Alaska Governor Sarah Palin over the weekend accused the president of lacking "cojones" and based on his approval ratings it appears that Americans agree. Now the latest Gallup Poll shows that just 41 percent of Americans approve of the president's performance. That is a new low.

And beyond that approval of the president's handling of the war in Afghanistan is also tanking, just 36 percent of those polled approve of his leadership in that conflict while a majority, 57 percent, disapprove.

Now with the November elections just around the corner, I don't think that news is sitting well with the anointed one. And joining me now with reaction is former Alaska governor, Fox News contributor, Sarah Palin.

Governor, welcome back.

SARAH PALIN, FORMER ALASKA GOVERNOR: Hey, thanks. You're doing yeoman's work, Sean. Thanks for having me.

HANNITY: All right. You've made a lot of news. Did you expect the reaction to "cojones"?

PALIN: Well, I said it in this context. That that was in the immigration debate and as opposed to the governor of Arizona who understands how imperative it is that we enforce our laws -- yes, the governor -- the governor is doing the right thing and our president lacks the guts to do anything about it.

HANNITY: Yes, it's amazing to me. I wonder -- and tell me this is separate and apart. I think on national security issues and some other issues like immigration, a willingness to really take on a controversial issue, do you think over time the narrative that the president is wimpy is going to take place?

PALIN: I think he's quite complacent and I think he's over -- in over his head and I think he has poor advisors surround him and I think he's really influx kind of when it comes to what his governing philosophy actually is. Some of this though is a result of he not having much experience and then a complicit media, and maybe some voters who chose not to allow him to be vetted very closely.

It's a combination of things that's resulting in a president who's not taking a strong stand on those things that are the will of the people. Obviously the will of the people is to enforce the laws that we have on the books.

HANNITY: Yes, but you know, Governor, I've tried to make this observation as many times as I can. It seems that -- you know, I know we are supposed to have government of, by, and for the people. That's what I -- that's what I always understood.

But this administration -- Democrats in particular -- right now seeing it's government by and of and for Obama. And by that I mean, you know, look at where the American people are on immigration. Look at where they are on health care.

Look at where they are on deficit spending. And then look at the Obama administration's positions. They seem at odds and a willingness to be at odds with the American people so often.

Is it ideology? Is it a lack of sophisticated political knowledge? What do you think it is?

PALIN: It's ideology and it's a commitment to what he had set out to do as a candidate, Barack Obama. And that was to fundamentally transform country. Let's take just one of those issues that you just named, Sean, illegal immigration.

Legal immigration is the sincerest form of flattery. People want to come to this country. They want to make something of themselves and work and provide opportunities for their families.

And legal immigrants built this great country, this most successful and rich and healthy and secure melting pot that is America. How did we become this though? Because we decided so many years ago that we would be a nation of laws -- not of presidential fiats, not politicians being allowed to pick winners and losers. But of laws.

And it is a travesty then to consider that our own president is choosing which laws to enforce and which ones not. And to not be willing to protect the legal immigrants who built this great country is something that Jan Brewer has called him on and said no, she is going to do something about it there in Arizona if he won't do his job overseeing the immigration laws that we have on the books.

It's a travesty what's going on with the immigration issues in this nation.

(CROSSTALK)

PALIN: And he has a choice in how he will -- he has a choice in which direction he will go, whether supporting and protecting we as a people in this nation of laws or not. And you can see which way he's headed. And that's putting us on a very, very, very dangerous path.

HANNITY: Yes. Well, I would agree with you. And I -- I think if we're not going to be a nation of laws we're in serious jeopardy and trouble. But it's going to be interesting to see how the American people ultimately react in 90 days from right now.

When you look at these approval numbers -- you know, the president now is heading into the 30s. Congress is at 11 percent. They are heading into a tough election. We saw the repudiation yesterday in the state of Missouri to Obamacare. And I'm thinking if I'm the president, I'm thinking I'm in trouble. What do you think?

PALIN: Yes, absolutely. And it's not just the polls, it's not just the protests, it's not just the special elections, but in these primaries and in these proposition elections that we're witnessing even quite recently, as recent as yesterday, as you point out in Missouri.

People are sending a message to President Obama and Congress that we do not support that fundamental transformation of America, that they are hell bent on kind of cramming it down our throats.

Let's take the Missouri vote. The Show Me State showed Obamacare the door yesterday. And what they need to do next there in Missouri is show the rest of the state how to raise the collective voice of we the people and say that Obamacare is overreached, it's unaffordable, it's not supportive, it's unconstitutional as the 10th Amendment and the Commerce Clause applies to government taking over that section of our private sector in health care.

And it is a reflection, too, on that success, that strong victory in Virginia on Monday when the AG challenged in the courts that state's right to challenge Obamacare.

What it did, even if it's symbolic at this point because we don't know what the federal courts will ultimately rule on Obamacare being constitutional or not, but it sent a message that opposition to compulsory insurance not even a close call. The American people don't support this.

HANNITY: You know, because I think Missouri is like a 50/50 state, Democrats and Republicans here. Seventy-one percent, this was polling just three weeks ago at 58 percent.

And -- I don't know. I don't know if we can read that much into this and connect this to the election in 90 days. Do you think this might be a sign of what's going to happen in 90 days or do you see it connected at all?

PALIN: It's a part of what is going on. Again, it is the protest, it's the special elections, it's Virginia's victory that we saw on Monday, Missouri's victory that we saw yesterday. It's all these things coming in place that are sending that message to Congress and to the White House that we want to be on a more positive, more constitutional road to get to our -- to get our nation back on the right track.

So, yes, I think it's a sign. It's a good, positive sign that Americans are saying no, government is to work for us, we're not to work for government. And we're going to put this back on the right track.

HANNITY: Now we also have judges involved in all this. We have Prop 8 in California. We had a court decision invalidating Proposition 8, the definition of marriage, which the people of California voted on.

Similarly, you know, we have the Arizona law as approved by 70 percent of the people of Arizona changing.

I don't know. I'm just getting the feeling that this is just going to create in the country even more anger than there is now. And I wanted to get your reaction to the court decisions.

PALIN: Yes, well, with that ruling as it applied to Prop 8, I haven't read the ruling yet. But you have to ask yourself, how many times do Californians have to state their opinion that -- and their definition of marriage that it is one husband and one wife?

And then of course, a judge believing that they can thwart the will of the people, that's what we saw. I haven't read the ruling yet so tough to comment on the merits of this. But California, along with so many other states, defining traditionally what marriage is and to see that third branch of government undoing the will of the people, it's frustrating.

That's why it's so important to pay attention to what will go on tomorrow in -- with more discussions about Kagan and -- the next Supreme Court nominee, where that will head. And I pray to God that Congress doesn't think that they just need to rubber stamp Barack Obama's pick on this one.

HANNITY: All right, Governor, stay right there. We're going to have much more with Governor Palin coming up right after the break.

(COMMERCIAL BREAK)

HANNITY: And welcome back to "Hannity," and we continue to be joined by the former governor of the great state of Alaska, Fox News contributor, Sarah Palin.

By the way, Governor, I really did enjoy the picture of you with the grizzly bear. That was scary.

PALIN: That was -- that was real, too. That was one of the rare not Photoshopped pictures of me with wildlife that you see on the Internet.

HANNITY: Yes. You know, but what I was thinking is, you know, here you have this grizzly bear and you got -- the two cubs with the mother. You had to have some fear in you at that point at all, did you?

PALIN: You always have fear whenever you're around a momma grizzly and she's protecting her cubs. And that's what we got to witness with two bears and later on fighting over those cubs.

And people get to see that when we release the documentary that we're making on Alaska. What it is that we get to see literally in our backyard whenever we need to.

HANNITY: All right. All I want to know is, did you have a gun in the boat, just in case? But that would scare liberals so.

PALIN: Yes.

HANNITY: You did. All right. I'm just checking.

PALIN: Sure, yes. Yes.

HANNITY: Well, you needed one.

PALIN: Yes. Yes, you need a firearm with you when you're out there.

HANNITY: All right. Fair enough. All right. I don't know whether to laugh or cry over what I think is great liberal Democratic hypocrisy. We got John Kerry avoiding taxes with his, you know, $7 million yacht.

Charlie Rangel, let's see, he has a problem paying his taxes as we have now learned. We've got issues involving Tom Daschle and Tim Geithner.

But I think what takes the cake is Congressman Jerrold Nadler in New York. And I'm pretty sure you've probably heard about this by now. You know they're going to let the Bush tax cuts expire.

But Democrats don't want the tax cuts to expire for the rich. So Nadler say, no, no, we need an exemption for districts like his where he's saying the tax brackets proportionally will be adjusted for regions like his where they make more money.

What is your reaction to that?

PALIN: Oh my gosh. Nothing should surprise us, I guess, coming out of Washington, D.C. these days. But, yes, that one is surprising. Makes absolutely no sense.

By the way, by allowing the tax cuts to expire, it's nonsense thinking that just because you're going to increase taxes on the American people, especially small businesses, that revenue will be generated to a higher degree there in Washington.

I don't know why they are thinking that they can put two and two together and they're going to get five out of this. It does not necessarily mean that taking more from our small businesses and from individuals who make $200,000 or $250, whatever their arbitrary numbers are that they throw out there on us, it doesn't necessarily result in more revenue that will go into more job creation, which is supposed to be the ultimate goal here in these economically woeful times.

Either that or President Obama is giving us just a line of bull about his desire to see more jobs created.

You don't create jobs, especially in an economy like we have today, by taking more money from the small businesses.

(CROSSTALK)

PALIN: That results in fewer jobs being created.

HANNITY: That's their sole argument. But -- look, I've got to give the Obamas credit. And maybe you should comment on this. They're doing their best to help the economy of Spain because they're taking a trip to Spain. Nantucket, because they took a vacation there.

The Gulf Coast, because they took a vacation there. Maine because they took a vacation there. All the different golf courses the president plays at. I assume they're benefiting financially.

Do you think the Obamas are showing that maybe they're a little bit out of touch on some of these issues?

PALIN: Yes, you know, I won't slam anybody for knowing that they need that good quality family time together. But you know, of all times, between the Gulf and between the kind of the frivolity that we see encompassing this White House, with the parties, all those things that George Bush reined all that in during times of trouble in the nation.

It's just common decency and it's common sense to rein it in, be connected to the American people who are quite worried about keeping a roof over their heads, keeping their jobs, being able to afford to send their kids to college.

Show some connectivity there, and a little bit of compassion -- feel our pain, if you will, Mr. President.

HANNITY: Ouch. I think we made news, Governor. But I agree with you. I think there's far too many vacation, too many sports teams, too many golf dates, Nantucket, for 10 days, Spain 30 rooms, the Gulf Coast, Maine.

I got to be honest, they've taken more vacation since they've been president than I think I've taken in the last 10 years.

But the side issue. Your comments about the mosque at Ground Zero made a lot of news. And I wanted you to explain why you feel the way you do.

PALIN: I just think this is just one of the worst decisions that ever has been made that will adversely affect New York City. And those innocent victims of families of those who were killed in the 9/11 tragedy, it is -- it saddens me to think that people don't understand what building this mosque at such hallowed ground really represents.

The mosque, fine, we're all about religious tolerance. That's what makes America beautiful and free. We're all about religious freedom. But to provoke even more heartache and more division in our country -- especially there in New York City -- by choosing that specific location, kind of marked territory with this mosque.

I think that it's -- nice in the collective heart of Americans to say yes, build a mosque, but down the road. Build it somewhere where it's not such a painful reminder to those who certainly care about our national security.

We'll never forget what happened on 9/11 and are committed to never allowing that to happen again. The reminder of that tragic day and the tragic days since, I just think building a mosque there is --

HANNITY: You know --

PALIN: -- tough to comprehend why anybody would support it.

HANNITY: Governor, I have the biggest problem with the controversial imam who wants America to be more Sharia compliant. The imam who said America is an accessory to what happened on 9/11.

You know where the money is coming from for this particular mosque.

PALIN: Right.

HANNITY: Judiciary within a judiciary. His unwillingness in the past to condemn Hamas. Those things really bother me so I think in the days to come we'll be debating it.

Governor, thanks for being -- I'm sorry we didn't see a plane taking off this time.

PALIN: There are a couple out there. believe me.

HANNITY: OK. Governor Palin, thanks for being with us. Appreciate it.

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