This is a rush transcript from "Hannity," January 21, 2011. This copy may not be in its final form and may be updated.
SEAN HANNITY, HOST: Earlier I had the opportunity to sit down with former New York City Mayor Rudy Giuliani. Now in recent weeks, his name has been popping up as a possible presidential contender in 2012. We cover that topic and much, much more. Take a look.
(BEGIN VIDEO CLIP)
HANNITY: How are you, sir?
FMR. RUDY GIULIANI, NEW YORK CITY MAYOR: I'm good, Sean, how are you?
HANNITY: All right. I'm going right to the heart of the matter. Literally dozens and dozens of articles, that you were thinking about making, you're looking at --
-- that you were thinking of making a run for the presidency in 2012.
GIULIANI: Thinking. Haven't decided and...
HANNITY: Thinking seriously?
GIULIANI: Oh, sure, yes. Something like that you would think seriously about. And trying to determine what kind of contribution I could make. What I could add to the debate. And what kind of chance I would have. Given, you know, the results last time, obviously I would do things a lot different. And, you know, can I reorganize to do it that way? So, there's a lot that goes into it.
HANNITY: Yes. But it's interesting because this poll that came out yesterday that showed, you know, one person wins in Iowa, one in New Hampshire, one in South Carolina.
GIULIANI: It's very mixed up.
HANNITY: It is mixed up, and there's obviously no front-runner.
GIULIANI: Well, let's see how that looks in March and so and how it progresses.
HANNITY: Is that about your time frame?
GIULIANI: Who knows, yes, I think so, something like that.
HANNITY: All right. Let's now talk about maybe what you would view as the vulnerabilities of this president. First grade him, if you were going to give him a grade, maybe give him two, one on the economic side, one on foreign policy. How would you grade him?
GIULIANI: On the economic side, I would have to grade him as a failure. I'd say he failed the exam, largely because of the results. Unemployment is still way through the roof. He took what I think was a recession that could have been over a year earlier and extended it an extra year with a disastrous stimulus program that just added to the debt and the deficit, with no discernible affects on the economy. Don't tell me he saved jobs. I never got counted by the jobs I saved. I got counted by the jobs I lost or the jobs I created.
I think then that his Obamacare did tremendous damage to the economy. Both immediately and speculatively into the future. And finally, his tremendous delays on his tax approach, which left our economy in tremendous uncertainty, as late as December, probably hurt our recovery. So, I give him a failing mark on that.
On national security, I give him something like a "C," because I think there are certain things he's done that I agree with. I think sticking in Afghanistan, I appreciate his doing that. I understand the pressure on him to get out from the liberal wing of his party. I think he made a critical mistake in a way that he did it by putting a timetable on it. Because I think that frankly, I think that cost us lives, I think it tells the enemy we are not for real, they can pressure us, they can push us around. But I think the fact that he stayed with it, from my point of view over shadows that because I was afraid he was going to pull out completely and leave a disaster there.
GIULIANI: I think he has continued a lot of the Bush programs, a lot of the interrogation programs even though in some cases, they are given Miranda warnings. And to a very largest extent as they moved along, they realized that President Bush was right. Seems to me, he may be turning on Guantanamo. That's going to be a big turn, that was one of his biggest promises of his campaign. On the other hand, I think the way in which he's handled Russia, China, North Korea and Iran has made things much, much worse, China most recently. The weakness that he shows is terribly damaging.
The idea that he hosts the president of China, has a dinner for him, I don't object to the way some do, I understand that. I worked for Ronald Reagan. Ronald Reagan spent a lot of time negotiating with Gorbachev and having dinners with him. And part that I object to, is he doesn't do the other part of the Ronald Reagan thing which is put tremendous pressure on his opponent. You know, Ronald Reagan pointed missiles at the Soviet Union with the names of the cities on them. Ronald Reagan went to the Berlin Wall while he was having dinner with Gorbachev, but he went to the Berlin Wall and said, tear down this wall Mr. Gorbachev.
GIULIANI: Ronald Reagan increased military spending, astronomically, to the point where -- Gorbachev wrote that Ronald Reagan spent the Soviet Union into oblivion. This guy has reduced military spending.
HANNITY: You used the term weakness. And, you know, Donald Trump said, why would you throw a state dinner for an enemy, he said, and, you know, here they have a trillion dollars of our debt. We've got now, what $14 trillion in debt. They've got a trillion of it.
HANNITY: And so, he couldn't confront him on the civil rights record. He couldn't confront them on the -- in balance.
GIULIANI: Yes he can.
HANNITY: He couldn't confront them.
GIULIANI: He thinks he can't.
HANNITY: He thinks, OK. He didn't.
GIULIANI: He's making himself a hostage. He's making himself a hostage of their owning about 22 percent of our foreign debt, seven percent of our overall treasuries. That's a lot. Seven percent is a lot. It's not. It is not impossible to work your way out of that, if China were to start selling treasuries. We could find other customers for treasuries. We could buy our own treasuries that might create inflation but we could do that if we had to.
Finally, they would have to be crazy to sell off massive amounts of treasuries, they would ruin themselves. They'd ruin our economy, they believe. Our economy is more important to them than their economy is to us. We are a country that buys from them. This would be like a business killing its best customer.
GIULIANI: What's happens to a business that kills its best customer? It goes under.
HANNITY: Would you have thrown a state dinner?
GIULIANI: I don't know if I would have thrown a state dinner. If I did throw a state dinner, it would have been done in Reagan style. First, I would have proclaimed them the evil empire. Then I would appointed --
HANNITY: Would you have said that about them?
GIULIANI: What would I have said, the evil empire but what I would have done was, I would have increased the size of our military. I would have increased the size of our military specifically, as it pertains to the Pacific. I wouldn't be having Secretary Gates talk about reducing the military when they are growing their military by double digits. The only thing that we can prove to them is if we continue to grow, so they can never catch us. But if they grow by double digits and we do these cuts that weaken our military which President Obama and Secretary Gates has in mind, this is going to really inflame them. This is going to inflame their military and if I understand China well, we're not doing too bad with the president of China. I think we got a somewhat reasonable person there. But he also has a party that isn't reasonable. And he's got a military that seems very assertive.
GIULIANI: We've got to work on that military.
HANNITY: All right. The president gives great speeches, he's known to read the teleprompter, he's got to show up before Congress on Tuesday, maybe they'll all be sitting together, we don't know what the seating arrangement ultimately is going to be. I would assume that he's going to try and say right things. Do you see this president maybe following in Bill Clinton's footsteps and do you think he's going to try and lurch to the center?
GIULIANI: I think he is lurching to the center. I think he's going to try to do it, he's going to continue to try to do it, then there's going to be a moment of truth when he does something that reveals what he really believes, which is, he is basically a liberal left-wing, however you want to describe it, ideologue. He grew up that way, all of his background as a social worker, makes him that. He is going to find it very, very difficult when the liberal members of his party, his base, criticize him for double crossing them, for walking out on them. That is going to bother him. It would not have bothered Bill Clinton. First of all, he wasn't part of that section of the party. He was the centrist Democrat. He had governed a conservative in which he had to make real deals with conservatives. So, I think this is going to really trouble him. It is going to make him feel bad about himself that he's not accomplishing what he got elected to accomplish. And I think that is going to play itself out.
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HANNITY: And welcome back to "Hannity." We continue now with America's mayor, the one and only Rudy Giuliani.
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What about the call for civility? We saw what happened in Tucson. We saw the reaction afterwards, we saw talk radio, Fox News, Sarah Palin and everybody in between any conservative being blamed for this. The president talks about civility. The first debate back, one week later, Democrats are comparing Republicans to Nazis and saying that if you repeal Obamacare, you are killing people.
GIULIANI: Yes. I thought that what happened after that terrible tragedy in Arizona, was one of the most disgusting moments in American politics. This is a true tragedy of bipartisan dimension, goes to the heart, like September 11th, as opposed to some political thing. And all they could think about was, how can we blame it on talk radio, how can we blame it on Arizona, Arizona is a bad state. Sarah Palin's map had something to do with it. Right-wingers have to be controlled. They are out of control. They are causing murder.
Turns out that's totally off base. Completely rejected by the facts. This man, I did many, many cases with people who were insane. I know the insanity defense left and right. And I handled the Hinckley case. I was associated attorney general at the time that Ronald Reagan was almost assassinated and I supervised the Hinckley case all throughout. This man committed murder and attempted murder because of his own individual insanity.
The lesson that should have come out of that which would have been good for this country is, is how do we handle mental health in this country? That's the debate, or as the Obama people say, the conversation that should have emerged. We do not handle it properly. We let all these people out of insane asylums. Many cases good reason. Back in the sixties Senator Moynihan used to tell me this, and then we never figured out how to deal with them in the community. And it's so hard to put a man that we have very dangerous people running around when they are screaming out that they are going to do something horrible like this guy was.
HANNITY: So, this guy, five times the school had to call the police to bring him in. And he had students sitting by the front door because they thought he was going to bring a gun in the class, teachers afraid to, you know, write in the blackboard thinking they were going to get shot at the back.
GIULIANI: And what did, you know, I hate to say this, because it is sensitive. But we want to really find out -- and what did the parents know?
HANNITY: I think they knew.
GIULIANI: What action should they have taken? And in fairness to them and the teachers, was there any action available that could have been used? And it's quite possible there wasn't. Because our laws now should change, so that you can evaluate these people better. If we hadn't had one week of these false accusations trying to destroy American conservatives over something they had nothing to do with, maybe we could have had a sensible discussion about how to really prevent this in the future.
HANNITY: All right. So, you are thinking about this run for the presidency? Hang on. Let's say, you were to get elected. What would be the things that would be your top three priority items the minute you got in office? I think one is health care based on what you are saying here.
GIULIANI: You know, a top priority item, two top priority -- the economy and terrorism. So, the economy health care is tied into dramatically. I see health care as driving the economic problems we have in the country. Obamacare being part of it. Not just what Obamacare does but what it doesn't do. What we have to do with health care, we have to contain the cost of health care.
The reason that states are going into bankruptcy or could go into bankruptcy if the law were changed is because of the cost of health care. Pensions are funded. Underfunded leaves a big liability but there's some money that have to do with pensions. Operating costs you can reduce. Health care costs have never been funded. The city of New York, State of New York, State of California, invested money for pensions, never invested money to pay for health care. It comes out of current expenditures. This is an enormous liability. And it's an enormous liability that's going up by 12 to 18 percent this year.
HANNITY: And more, yes.
GIULIANI: That has to be dealt with if we are going to save our economy. It is a national security issue. If we feel our economy is so weak that we can't deal adequately with China, then our economy is a national security issue.
Obamacare should be repealed and it should be replaced with a real reform. Change the tax deduction, $15,000, free tax money for everybody to buy health insurance. Anything you can get for less than 15,000, you put it into a tax-free savings account.
If you do that, health insurance, companies will start taking $18,000 policies drive them down to $12,000 because the volume will make a bigger profit at $12,000 that at $18,000. Then you have $3,000, you can play it with your own health care. You can negotiate premiums then. You can say, give me a high premium. I can spend $1,000, I can spend $2,000, I can spend $3,000, because now I have it in the bank in one year. I just don't want to spend $10,000. So, give me a big deductible, now the premium comes all the way down.
HANNITY: Catastrophic --
GIULIANI: Interstate purchase of health insurance would drive it down dramatically. And get the federal government the heck out of defining health insurance which is what Obamacare will do. This is why I say Obamacare is going to play out much worse. Americans don't realize that when Obamacare goes into effect, there's going to be a big building in Washington that determines what is health care, and you have to follow what they tell you is health care.
HANNITY: One thousand, nine hundred, eighty six, you know, bureaucratic procedures.
GIULIANI: And they sit there. And they're going to say, you must include psychiatric treatment. You must include this. You must include that, must include dental care, must include this, must include that. This is what drove the cost up in Massachusetts. But Massachusetts is a small state. That was a tiny drive-up of costs. This will be an unbelievable increase in cost.
HANNITY: You are not preparing for debate with Mitt Romney, now?
GIULIANI: No, I think he's admitted it was a mistake, we all make mistakes, I got plenty.
HANNITY: All right. So, in March we'll have an announcement?
GIULIANI: Well, I don't know if I'll give announcement in March. But that's when I will start thinking about it seriously.
HANNITY: Mr. Mayor, good to see you.
GIULIANI: Thank you.
HANNITY: Thanks for being with us. I appreciate it.
GIULIANI: Great job, Sean.
HANNITY: All right. Thank you.
GIULIANI: Thank you.
(END VIDEO CLIP)
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