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This is a RUSH transcript from "The O'Reilly Factor," January 04, 2012. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Now for the "Top Story" tonight, joining us from Bedford, New Hampshire, the aforementioned Rick Santorum, who may be the hardest working guy in politics and it has certainly paid off last night. So am I making any mistakes in my analysis, Senator?

RICK SANTORUM, GOP PRESIDENTIAL CANDIDATE: I think you... I think you have a pretty good accurate, except for the one thing where you talked about me not being able to do particularly well here in New Hampshire. I think we're going to do surprisingly well here. I'm not say we're going to win or anything close to it.

O'REILLY: Who are you going to take from ? You got... you got 10 percent now. You got momentum coming out of Iowa. But you got to take from somebody. Who are you going to take from?

SANTORUM: Well, there are a lot of undecided voters up here and a lot of the folks that... that are supporting Governor Romney are supporting him because well, they think he's going to win and you're going to be with the winner.

And I think a lot of folks are looking not just for the winner here in New Hampshire, but who is going to be the winner long-term? And I think you're going to see our numbers start to... start to pop up in some of these other early primary states. Our numbers are already more than doubled in the CNN flash poll and that was even before the... the announcement and before I even gave either of us came out and spoke last night.

O'REILLY: All right.

SANTORUM: So we feel very good. We've been able to raise almost a $1 million today. So...

O'REILLY: That is amazing.

SANTORUM: ...we're going to have resources. We're going to... we're going to -- we're going to be a much bigger player than I think everybody anticipates right now.

O'REILLY: Well, certainly you can't be underestimated based upon your performance last night. Now you are... are you ready to be demonized, because that's going to come and it's going to come hard at you. Are you ready for that? Are you ready to be demonized?

SANTORUM: This isn't my first rodeo, Bill. I've been in a lot of tough campaigns.

O'REILLY: All right ok. But now it's a national...

SANTORUM: You know that.

O'REILLY: Of course. But it's going to be a national demonization and you're going to be portrayed as an extremist and some of your positions are out of the main stream, according to the polls. Let's run them down: contraception, birth control, you know 90 percent... 98 percent of Americans say contraceptive is fine, 98 percent?

SANTORUM: Yes.

O'REILLY: You say that the states should have the right to ban some contraception. That's right off the bat going to be a big one.

SANTORUM: Well, the states have a right to do a lot of things. That doesn't mean they should do it. Someone asked me if the states have the right to do it? Yes. They have the right to do it, they shouldn't do it. I wouldn't vote for it if they did. It doesn't mean they don't have the right to do it.

As you know, Bill, you're a Catholic, Catholic Church teaches contraceptive is something you shouldn't do.

O'REILLY: I know, I know but it's... that's the question majority of Catholics...

SANTORUM: So when I was asked the question on contraception I said I didn't support it.

O'REILLY: Ok but the majority of Catholics do not follow that and it's almost like a meat on Friday thing, it's not that Jesus said it. It's not a dogma. It's a doctrine made by man.

I'm not justifying it and I'm not giving my opinion one way or another about it. I'm just pointing out that they're going to come after you on that and they're going to come after you on gays in the military, that you want to rescind that.

SANTORUM: Well...

O'REILLY: And they're going to come after you on gay marriage that you would have the federal government rescind the marriage that... marriages license already given, you would have them rescind it. All I'm saying to you is... I'm not debating the issue with you, saying you're right or wrong. I'm not doing that tonight.

I'm saying that this is going to be put on you, that you're an extremist man, out of the main stream. How are you going to reply to that?

SANTORUM: Well, I don't think being for marriage between a man and woman is extreme, Bill.

O'REILLY: To rescind... rescind it after a licenses already given. That's a big deal.

SANTORUM: The federal government would have to pass a constitutional amendment and if the Constitution says that marriage is between a man and woman, then things that are inconsistent with that would not... would be inconsistent with the Constitution so...

O'REILLY: Would you be doing that if you were elected president? Would you be campaigning for a constitutional amendment in that way?

SANTORUM: I would... well, if you pass a constitutional amendment that says marriage...

O'REILLY: So would you... would that be... would that be in the forefront of your... of your administration?

SANTORUM: As you know, Bill, if you've been following me out on the trail, I haven't been talking a lot about this.

O'REILLY: No.

SANTORUM: Although I strongly believe in it. What I've been talking about as I did last night on my acceptance speech where didn't talk about this issue, I talked about the importance of getting this economy going and talked about my grandfather and coming here for freedom. And this is the fundamental issue in this campaign is whether government is going to be big and obtrusive and telling people how to manage their... their lives or... and are they going to support the basic values of faith and family that allow government to be limited and allow our economy to be strong.

Those are the things I talked about and did across Iowa. I'll be talking about those things here in New Hampshire.

O'REILLY: All right so you're going to be de-emphasize...

SANTORUM: And those are basic American values and principles.

O'REILLY: You're going to de-emphasize the controversial social stuff and then get into the smaller government, more self-reliance and the economy stuff.

Ok. Now, Newt Gingrich got into trouble. And this really hurt him... by the judges thing, saying that look, if the judges couldn't explain their rulings, he was going to bring them to Washington. They could be impeached. Marshals might be sent out.

You've said that you would call on Congress to abolish the 9th Circuit Court of Appeals in San Francisco.

SANTORUM: Right.

O'REILLY: Now, how is that different from what Newt Gingrich said?

SANTORUM: Great question, Bill. And I would not subpoena individual judges. I think that is... that's going too far. What I said is that I would abolish the... I'd like to abolish the 9th Circuit completely, but I think ultimately what I would have to do is take the 9th Circuit... and this has been proposed by many others, not just me for a long time. The 9th Circuit is by far the biggest circuits in the country and should be, in fact, two circuits.

And so I take the 9th Circuit and take all the judges in the 9th Circuit and move them... move them into two states, California and Hawaii and then create a new circuit with new judges and allow California to attempt to live with the... with the judges that are there right now, which have a... a reversal rate somewhere close to 90 percent.

O'REILLY: No, I understand. We're no fans of the 9th Circuit.

SANTORUM: This is... this is a court that is way out of whack.

O'REILLY: So Congress would have to do that and draw, you know, jurisdiction of lines. I'm not opposed to that. I think the 9th Circuit Court of Appeals abused its power all day long.

Now, you made a comment and I'm not harping on this, but again, I'm just telling you what... I'm like the ghost of Christmas present. I'm telling you what's happening now. You said, quote, "I don't want to make black people's lives better by giving them somebody else's money," when you were talking about welfare.

SANTORUM: Yes.

O'REILLY: And the point you were trying to make, because I want to be fair to you tonight, is that look, we got to get away from this entitlement society. We got to get people back to work and give them an incentive rather than giving a reason not to work.

SANTORUM: Right.

O'REILLY: But you threw in black people when most of the people, as you know, on welfare are white people. You think that's going to be a problem?

SANTORUM: Yes. No, it's not going to be a problem. First up the overall point that you made is exactly correct. And I was talking about not just in that... in that quote, but throughout the course of my conversation.

I looked at that and I didn't say that. If you look at it, what I, what I started to say is a word and then sort of changed and it sort of came out and people said I said black. I didn't. No one in that audience and I've talked to a lot of people...

O'REILLY: Now we looked at it, it is a little blurry.

SANTORUM: I looked at it very closely. It is.

O'REILLY: All right, all right, I'm going take you on your word.

SANTORUM: I don't use... I don't... first off, I don't use the term "black" very often. I use the term African-American more than I use "black". And I -- and I can tell you as someone who -- who did more work for historically black college, I use to have every year, I used to bring all the historical black colleges into -- into Washington, D.C. to try to help them because they got -- they get very little federal money through the -- through the bureaucracy and so I helped to try to introduce them to... to people in the Department of Education so they could have a more resources.

We had two historically black colleges in Pennsylvania which I've given commencement addresses at...

O'REILLY: You don't have to convince me Senator. I don't think you're a bigot...

SANTORUM: Well but I just... yes, I'm not saying it's a bigot, but I'm just saying that I'm actually proud of my record and working in these communities and... and so I think sometimes you want to give someone the benefit of the doubt if it's a little bit...

O'REILLY: And absolutely. I think that's the fairest thing to do.

All right, Senator we hope we'll be talking to you down the road. We appreciate you coming on this evening and congratulations in the Iowa deal.

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