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O'Reilly: Debt Crisis Will Damage Obama No Matter What Happens

This is a RUSH transcript from "The O'Reilly Factor," July 28, 2011. This copy may not be in its final form and may be updated.

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LAURA INGRAHAM, GUEST HOST: Continuing now with our top story: the standoff over the debt crisis. Bill O'Reilly, who once again was supposed to be having a day off has instead been monitoring the situation, joins us now by phone from Los Angeles with his analysis. OK, O'Reilly, tell us what you're seeing here. How is it playing out for both parties? The White House, House Democrats, House Republicans.

BILL O'REILLY, HOST (VIA TELEPHONE): First of all, it was a good interview with the guys up top. But I noticed a little tone change from your posture last week when I was anchoring and you were -- you were the interview subject to now when you're the anchor, I saw a little -- a little softening of the -- of the hard-line position. Did I pick that up wrong? Have you changed a little bit?

INGRAHAM: Well, no. No. I don't think you're picking it up correctly at all. My point right now is that they've gotten the best deal they can get with the leverage that they've exercised. If the Tea Party just agreed to whatever they had agreed to, you know, several days ago, Bill, which was my point last week, then they wouldn't have gotten the deal they have now. And so exercise the leverage.

O'REILLY: OK, so you -- you think that now the Tea Party should probably say OK, we're going to go along with Boehner?

INGRAHAM: I think the Tea Party -- yes, absolutely.

O'REILLY: OK, OK.

INGRAHAM: Because this is the best they're going to get. They're going to get a worse deal if this thing goes down in the House, no doubt about it because the debt ceiling is going to be raised one way or another.

O'REILLY: OK. All right, so let's look at the big picture then because I think you're correct. I think that if the whole thing blows up, once again the Tea Party is going to get blamed and they are going to be damaged. But they're all going to be damaged, not just the Tea Party.

It's interesting because I'm on my way out here and I'm doing some PR stuff for the company out in Los Angeles. I talk to a lot of people. People come up to me all the time. And there is a lot of buzz about this story in the last few days. It's really picked up some populist sentiment. I mean, people are dialing in. "The Factor's" ratings are very good. And interestingly enough, because I've taken a pretty moderate stand here, our ratings are so much higher than everybody else's in cable news. It's amazing. So people are coming in and they are listening to what we have to say, and here is -- here is my analysis of the big picture.

President Obama has not shown leadership. That is going to hurt him drastically going forward no matter what happens. So no matter what happens in this, the president is damaged, and I don't believe in the short-term. I believe it's going to carry over to the election. That's No. 1.

No. 2, the Democratic Party is basically seen as a party that doesn't get it in the sense of the debt. They don't get the drastic nature of a $14.5 trillion debt. They are clueless, if you want to use an Alicia Silverstone analysis. And the Republican Party is looked upon as divided by the American people. That you have the Boehner wing and you have the McConnell wing, the John McCain wing and then you have the Tea Party. And those people are working against each other. So the Republican Party is divided. So if you look at, step back objectively and look at the big picture, nobody's going to win even if a deal gets done.

INGRAHAM: Well, Bill -- Bill and we've seen the market drop 480 points in the last five days.

O'REILLY: And who predicted that?

INGRAHAM: And most people are predicting that the market will drop precipitously -- bonds are also down -- if in fact no deal is reached.

O'REILLY: And I predicted -- I predicted that three weeks ago. Three weeks ago.

INGRAHAM: OK, right. Right and -- and Bill, we all know that this debt ceiling is going to be hiked because there are at least 300 people in the House who've said it's got to have to go up and there are enough senators.

O'REILLY: Right.

INGRAHAM: So the point now is what is the best deal you could get?

O'REILLY: I don't know.

INGRAHAM: If you're a conservative and that's…

O'REILLY: I can't -- yes, I can't tell you what these pinheads are going to work out. I can't tell you. It's impossible. And I'm not even going to waste the viewer's time with conjecture on it. I will tell you this: that the American public is now losing confidence in all of the parties and absolutely in the current president, been losing confidence.

INGRAHAM: But the -– yes, but the president last Friday was clearly losing momentum, Bill. When he came out there at 6:00…

O'REILLY: He is MIA. He's MIA. It's like, where are you?

INGRAHAM: Yes, Charles -- Charles Krauthammer -- Charles Krauthammer said that evening was when the momentum shift happened. He looked pathetic and he looked extremely weak to most people. Even his own party were incredibly annoyed. Then Sunday comes around, the whole thing blows up.

O'REILLY: Look, there's no -- there's no question that worldwide -- America's image all over the world has taken a hit. The German newspapers are saying that the USA's power is now beyond -- diminished beyond return. And I don't believe that, by the way. But the president is taking an enormous hit, not only in the country but worldwide. The only thing that can save Barack Obama at this point is craziness on the right. The only thing that can save him and get him re-elected.

INGRAHAM: But look -- but Bill, when you say -- right, when you say craziness, let's just review. Col. Allen West, a big Tea Party guy, a congressman, he's for the Boehner plan. Mike Pence, big Tea Party guy, he is for the Boehner plan. Paul Ryan, the only guy to advocate -- what is it? -- $6 billion in cuts in his budget that would have actually satisfied all these credit rating agencies that are -- that are saying you need at least $4 trillion in savings. He's for the Boehner plan. So right now you have a minority of Republicans and God bless them, I think they were smart to hold everybody's feet to the fire and they are smart to do that -- but a very small minority of Republicans are going to blow up the whole deal and harm the Republican Party.

O'REILLY: That could absolutely be possible.

INGRAHAM: Well, it's going to hurt the Republican Party enormously.

O'REILLY: You know, obviously -- but it's not only going to hurt the Republican Party, which has already been hurt, OK? But it's going to save President Obama, who they…

INGRAHAM: Exactly. That was my next point.

O'REILLY: …who they hate. They don't like him. And the irony is the people who dislike President Obama the most on talk radio or cable news, wherever it is, the people who dislike him the most are helping him the most. You've got to stop this hateful rhetoric. Some of the rhetoric is so hateful that independents will spin their head around. And then you have to say, listen we are at a point in history now we have to save the country. You can't have, as you pointed out absolutely rightfully, a collapse in the stock and bond market. You can't do it. You're going to help the man. And I mean, it's really, it's a fascinating political story. It really is fascinating. But I just hope that they all say what's good for the country. Let's go do what's good for the country.

INGRAHAM: All right. Bill, thanks so much. We appreciate it.

O'REILLY: All right, Laura.

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