This is a rush transcript from "Hannity," July 16, 2012. This copy may not be in its final form and may be updated.
SEAN HANNITY, HOST: One-hundred-thirteen days until Election Day, and tonight, the Obama campaign proves yet again that it is in panic mode and in just a moment, I go head to head with James Carville. But first, the Obama campaign stoops to a new low claiming that Governor Mitt Romney may have committed a felony.
Now late last week, the president's deputy campaign manager Stephanie Cutter said that Governor Romney allegedly falsified his SEC filings during his tenure at Bain Capital. Now, the outrageous allegation prompted Governor Romney to demand an apology from the president, but yesterday, Cutter said that Governor Romney should just stop whining. Listen to this.
(BEGIN VIDEO CLIP, "FTN"/CBS)
STEPHANIE CUTTER, OBAMA'S DEPUTY CAMPAIGN MANAGER: He is not going to get an apology. You know, it's interesting, just a few months ago in the Republican primary Mitt Romney said to his opponents though he was crashing at the time, stop whining. And I think that's a good message for the Romney campaign. Instead of whining about what the Obama campaign is saying, why don't you just put the facts out there and let people decide rather than trying to hide them?
(END VIDEO CLIP)
HANNITY: Now, as President Obama and his spin team continue to distort Governor Romney's record of Bain and make wild accusations about outsourcing, I think it's time for voters to start asking what questions about President Obama's record.
For example, why are so many of his surrogates hosting fundraisers overseas? Now, some of the places includes China, Egypt, France, Sweden, Switzerland and the list goes on and on. But this really shouldn't come as surprise. President Obama has a long history of shall we say outsourcing.
Now, remember all of the American tax dollars that were used to create countless jobs overseas, thanks to his failed stimulus plan. And as we saw this weekend, in order to put an American astronaut in space, we have to pay the Russians millions of dollars for the ride. Why? Because we no longer have a space shuttle program. Another case of Obama outsourcing.
So, I guess that explains why people in other countries may want this president to keep his job. Joining me now to react to all of this and much more, the author of the brand-new book, "It's the Middle Class Stupid!" Our good friend James Carville. Welcome out of exile. How are you sir?
JAMES CARVILLE, CO-AUTHOR "IT'S THE MIDDLE CLASS STUPID": Thank you, sir. Good to be here.
HANNITY: Last time we debated, Tim Russert.
CARVILLE: Right, Long Island. That was a lot of fun. I enjoyed it.
And we debated last time in Florida and Orlando and Atlanta and different places like that.
HANNITY: Yes. We've been on the road together. I know that people think we're enemies and we're not. I love your wife, I just don't what she was thinking.
CARVILLE: I don't know sometimes I wonder myself. I look in the mirror, and I look at me and I look at her. And say, man, you know, I'm a lucky guy. But I'll take it.
HANNITY: I think we all are.
HANNITY: You know, you said recently that you are a Clinton guy. Someone was asking a question about a Clinton and Obama, you said that, you really are a Clinton guy, right?
HANNITY: OK. Let me play some comments because we're now in the negative campaign part of this process. Let me play some comments. Hillary and Bill bring you back to the primary campaign.
(BEGIN VIDEO CLIPS)
HILLARY CLINTON, FEB. 23, 2008: So shame on you Barack Obama. It is time you ran a campaign consistent with your messages in public. That is what I expect from you. Meet me in Ohio, let's have a debate about your tactics and your behavior in this campaign.
BILL CLINTON, JUNE 21, 2008: I think that they played the race card on me. And we now know, from memos from the campaign and everything that they planned to do it all along.
(END VIDEO CLIP)
HANNITY: All right. Those are pretty serious allegations.
CARVILLE: Right. You know, if I went back and pick up the things that Gingrich or Rick Santorum or Rick Perry said about Romney during that time, I could find all kinds of stuff like that. The truth of the matter is, the president showed the good judgment to pick then-Senator Clinton to be a secretary of state, they've done a marvelous job. He's the first Democrat on my lifetime that has been ahead on foreign policy.
So, you get in to these primaries, you know, look, Jerry Brown said some things about us in '92 of -- and that happened. It happens in any primary, but you know at some point it's water under the bridge. President Clinton is sending out fundraiser letters for President Obama now. So, big yes but we can all go back and -- we can all go back and find all of the things that Gingrich said. Like I said, Rick Perry.
HANNITY: I don't remember anyone, I mean, the race card is about serious as you get and for Bill Clinton, I don't think Bill Clinton ever got over it myself.
CARVILLE: You know, what? He's on board totally. I talked to him Monday a week ago and he was telling me about he started a fundraising thing. Yes, I think that if she didn't like him she sure wouldn't have been the secretary of state, the most important job of the administration.
HANNITY: All right. You wrote this book, "It's The Middle Class Stupid." You came up with the line, "it's the economy stupid." All right. By the way, I agree with you and it's about the economy, it's about the middle-class we agree on that, right?
CARVILLE: Yes, I hope so.
HANNITY: So, Romney says, it's still the economy and we're not stupid.
HANNITY: Here is the question I have. Are we better off economically than we were four years ago and five trillion dollars in debt ago?
CARVILLE: I think we we're demonstratively better off than the day the president took office. We're losing 750,000 jobs a month, and we tend to forget that. Had this recovery had been everything that we'd hoped for? No. We've now find out the after math of this financial crisis was very tough. The other thing is, we've had, you know, a really understandably but we've lost, I don't know what happened, half a million public sector jobs here.
HANNITY: So some of the Americans working now than when Obama took office?
CARVILLE: The private sector jobs are up. They got more private sector growth in this recovery than there was after recovery in 2001.
HANNITY: Sixty nine thousand jobs?
CARVILLE: More than the recovery of 2001. At a comparable time, more private sector jobs were created and was created after 2001. It's an insufficient pace, I completely agree with that, but that is a fact. Where the real devastation has been is in the public sector.
HANNITY: But let me give you -- for the first time in American history, we've had our sovereign debt downgraded. We have federal spending, our budget deficit and our federal debt has a percentage of GDP now is the highest since World War II. We have long term unemployment, the highest since the 1930s. More people on government assistance than ever before in history. We now have, what? The fewer people paying taxes than ever before.
Now, Obama said he is going to cut the deficit in half. He said, he was going to get rid of earmarks, he said he's going to turn this economy around, worst economy since the great depression. You are going to say he succeeded?
CARVILLE: Well, you're asking me, are we are better off than we were four years ago?
HANNITY: You really think so.
CARVILLE: We're demonstratively better off.
CARVILLE: Look, we were losing go 750,000 jobs a month, Sean. We're now creating 80,000 jobs a month. You may not say 80,000 is not very good, it's a lot better than losing 750. Look at all of the charts (INAUDIBLE) we didn't know if we were going in a worldwide recession. But the truth of the matter here is, this has been the aftermath of this financial crisis, this has been a very difficult recovery. No problem with that. In terms of the deficit every day, it's 15 percent of Obama's of this deficit are Obama's policies, 85 percent were the policies of the prior administration.
HANNITY: Don't blame Bush.
CARVILLE: When you have a recession -- I'm dealing with what the facts are.
HANNITY: Come on. That's weak.
CARVILLE: And when you have a recession -- when you have a recession, sure tax revenues will go down because not as many people are working and government benefits go up because more people have filed for unemployment and less people are working, and that's the nature of the beast. And yes, it's 15 percent of the current -- what we now as a result of Obama's policies.
HANNITY: Let me tell you the problem that I have with your numbers. And I want to be fair and give you an open shot here on the program. The problem is that the labor participation rate if you're at the level when Obama took office, we would be 11 percent unemployment. He promised, he predicted, his administration, unemployment now be at 5.6 percent. All of his predictions from cutting the deficit in half, all his predictions about the economy have been dead wrong.
And we have found, hang on, you said in a recent interview that the biggest problem in this country has is the deficit. No president in America history has accumulated more debt than him.
CARVILLE: Let me go back.
HANNITY: And you want to blame Bush.
CARVILLE: First of all, they are not my numbers, the number of every analysis, 15 percent of this deficit is Obama, 85 percent is Bush.
CARVILLE: The biggest contributor -- the CBO to any other private thing -- the biggest contributor to this deficit is the Bush tax cuts. But these are not mine. Understand, these are not my numbers, these are the real numbers.
The point here is that, I think that this recession, and as of research we now know, the aftermath of a financial crisis has put this very, very, very nasty recessions. They've gone back and look at that. And that is what happened. This was not a normal, you know, well, you could fix it by interest rates. When Obama took office, the interest rates were zero. They had nothing they could do about monetary policy recession. But it has been tough and I think that -- in my observation, it has been tough on the middle class because the middle class, you know, they lost 40 percent of its wealth between 2007 and 2009.
HANNITY: It's 2007, 2010.
CARVILLE: No, but it will happen about 2009. It will happen about 2009.
HANNITY: It's 2010 is what the statistics.
CARVILLE: No, no, no. But the people that did the research showed the chart, it all happened from 2007 to 2009. They're basically haven't had a race in 30 years and -- it's gone up. The only time that the middle class actually got a raise, it went up was --
HANNITY: What I wanted to say to you is look, if this is the campaign and you are pretty smart political strategist. And I'll be honest I would take Clinton over Obama any day and maybe I was wrong to start to stop the Hillary express. I think I regret it. But here is the bottom line. This president, I call him "President Crybaby." He blames tsunamis, earth quakes, he blames, kiosks, ATM machines. He blames Fox News, talk radio, Karl Rove, Sean Hannity, Rush Limbaugh. Everybody but himself in his own policies. Did he -- do you not say in some way that he failed when all these jobs were outsourced and stimulus dollars went to these foreign countries. Didn't they make you angry?
CARVILLE: Look, if you are asking me what should have happened -- sure, why not? I mean, somebody has got to be president for three and a half years. Would you go back and say, well, do you disagree with this, well, sure. But overall, I think this president has done a doggone good job. And I think he is, you know, he's going to negotiate. So, I think our foreign policy has actually been pretty darn all good.
I think a lot of things that he's put in place have worked pretty good. I think this GM crisis thing was a smart thing that the he did. But, you know, if you say, has he made some mistakes? Of course he has. And who can be president for three-and-a-half years.
HANNITY: Did you see Hillary Clinton getting, you know, tomatoes thrown at her in Egypt for the Muslim Brotherhood? The Arab Spring, the president got --
CARVILLE: The Muslim Brotherhood, they don't like us.
Why didn't the President see that coming? Why he didn't see it coming?
CARVILLE: Why didn't he see it coming?
HANNITY: I saw it coming.
CARVILLE: OK. Look, she is diplomat, one of the things that diplomats do, you go to places where you are not liked. That is the nature of being a good diplomat.
HANNITY: No, I thought -- I felt sorry for her -- I don't want you to misunderstand.
CARVILLE: I mean, I think that she knows that she has a tough job, she is in a tough spot. She's doing a tough job. But again, you just don't go to the people that like you. You got to go to the people that don't like you, that's the nature of diplomacy, that's why diplomacy --
HANNITY: That is why you are here. You are in the belly of the beast.
CARVILLE: I like you guys. You know me.
HANNITY: I'm kidding.
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