What lies ahead for the 113th Congress?

This is a rush transcript from "Hannity," January 3, 2013. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: After a day of high drama on Capitol Hill, Congressman John Boehner of Ohio was re-elected Speaker of the House. Now, in just a few moments, you're going to hear directly from a man who previously held that job, former Speaker of the House Newt Gingrich.

But first, today's result was announced following an afternoon that was marked by a series of very tense moments as nine fellow GOP members defected and voted for somebody other than the embattled speaker. Now that development nearly triggered the need for a second ballot.

But while rumors had been circulating for days that Boehner might face a full on challenge from within his own party, that ultimately proved not to be the case, and in the end, it was an emotional John Boehner who once again was handed the gavel and asked to serve a second term as a speaker. Take a look.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, R-OHIO, SPEAKER OF THE HOUSE: Our government has built up too much debt. Our economy is not producing enough jobs. And these are not separate problems. At $16 trillion and rising, our national debt is draining free enterprise and the weakening the ship at state.

In our hearts, we know it's wrong to pass this debt on to our kids and our grandkids. Now, we have to be willing, truly willing to make this problem right.

(END VIDEO CLIP)

HANNITY: Now, the speaker's re-election comes just a few short days after conservative members in the GOP caucus expressed frustration over his handling of the "fiscal cliff" deal. However, top Boehner aides are now telling The Hill newspaper that the days of one-on-one, closed door negotiations with President Obama are over, instead the speaker is now planning on quote, "Recommitting himself and the House to what we've done, which is working through regular order and letting the House work its will."

So, John Boehner claims this is essentially his 2013 resolution and that this is the direction which he wants to take the GOP majority in the House. Now, everybody claims it's the Republicans, they're the ones that are divided. What about the Democrats? Are there even still any Democrats, real Democrats in America?

Now, it's about time that folks like Harry Reid and Nancy Pelosi, well, they've got to make a choice as well once and for all. Are they European socialists or are they Democrats? In other words, are they going to go along with this socialist president who believes in no spending cuts, he spends like a drunken sailor, or are they going to be responsible Democrats who love their children, grandchildren and their country?

Now, it's very clear what the president is, it's very clear how the president acts, how the president treats quote bipartisanship and how this president spends your money. So, will people on the other side of the aisle who call themselves Democrats, are they going to really act like Democrats or will they fall in line and be European socialists?

In other words, will they follow or are they going to stand up for what's in the best interest of America? Will they continue to spend any amount of money, damage the country, damage their future for your kids or are they finally ready to stand up to President Obama, do what's right and stop being puppets of this administration?

Now, at some point very soon, Democrats will have to decide if they are the party of moderate Democrats, Clinton Democrats, or the party of Obama, meaning radical socialist Democrats.

Now, they need to decide what they want to do, do they want to restore America or transform America, they have to decide if they want to avoid the fate of Greece or become like Greece.

So, let's be clear if they cannot stop themselves then it's up to these Republicans to stand strong, to stand strong for our kids, for America, to save America.

Joining me now with reaction is former speaker of the House, former presidential candidate Newt Gingrich. Mr. Speaker, welcome back to "Hannity."

NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: It's good to be with you and Happy New Year.

HANNITY: Happy New Year, Mr. Speaker.

All right. So your thoughts on all that happened today. A little drama on the House floor is not unusual to you?

GINGRICH: No, I went through an election in '97 where we had eight members who voted present or refused to vote on the final vote. I still got to be speaker, as Boehner did today, but I think the last two days may turn out to be a very healthy turning point. The fact that 150 House Republicans voted no is a very good sign. The fact that John Boehner has indicated that he is going to revert to regular order, go through the regular process, legislate out in the open, is a very good sign. Both of these give me some hope that we may well see the House Republicans begin to rediscover their role in the constitutional process.

As you point out, this is not a parliamentary system. They have no obligation to get into closed door negotiations with President Obama. They can legislate on their own. They can appropriate on their own. They can have hearings and do investigations on their own. They're in a position where if they will do their job and then let the president respond to them, they can shape the environment for the next two years dramatically more than the Washington press corps thinks.

HANNITY: You know, it's interesting because we're on the same trajectory. I agree with you, I think this could turn out to be a good thing. Because I think with Speaker Boehner saying no more one-on-one talks, we're going to go through the usual process, I think he's signaling OK, I hear you loud and clear, and I think he understands now that the country voted for them to stop Obama's spending. I mean, Obama won, we know that, but so did they. And maybe now he realizes that. Do you get that impression?

GINGRICH: That Boehner does or that Obama does?

HANNITY: Well, that the Republicans and Speaker Boehner.

GINGRICH: Yes, look, I think Boehner understands the reality which is by almost two to one his own conference repudiated the agreement that there's enormous anger over the way this has been going. I find it very, very bad to have these secret negotiations and then have the Senate step in at the last second, pass a bill nobody's read, send it to the House, ram it through the House. This is exactly the opposite of why people in 2010 returned the House Republicans to a majority.

The American people want to see business done out in the open. Take the example of the bill that's being passed as an emergency measure for New York and New Jersey. I was told this afternoon that the Senate bill, 64 percent of it, does not get spent in the next 10years. In other words, what happened was, senators saw a train coming through, called emergency relief, they decided they had a whole bunch of additional cars called pork for back home, and the train now is two-thirds pork, one third relief.

HANNITY: Unbelievable.

GINGRICH: Well, the House Republicans ought to pass the relief part of that bill and leave out the non-relief parts, they would save literally two-thirds of the cost of the bill.

HANNITY: Could you imagine if that was a Republican president, went into New Jersey, embraced by Chris Christie and he hasn't said a word about this, I know they're blaming Speaker Boehner, but the president hasn't moved on it either or led.

Let me ask you this, would the Republican Party going forward, because the "fiscal cliff" is over. The big test for the country right now is whether we're going to continue to borrow 46 cents of every dollar and rob from our children and grandchildren. That to me is a defining moment. We're either going to save America or we're going to be Greece, it seems to me. Sixty two percent of Americans favor across the board spending cuts. Would it be in the party's best interest, do you think, to be the party that says, we're going to stop robbing from our kids, and make that case?

GINGRICH: I think if Republican Party became the party of our children and our grandchildren, if the Republican Party said -- because after all, all appropriations start in the House. You have to have -- if the House doesn't appropriate it, it doesn't exist. And let me give you an example of the spending bill. I sympathize with Governor Christie's frustration yesterday, but I would also say, what the House Republicans ought to say is, billions for New York and New Jersey for relief, but not one penny for pork.

And I think you could divide that bill up, pass all of the relief parts of that bill and would have total legitimacy doing it, save the taxpayers about $35 billion, and then put the pressure back on the Senate to explain that they really aren't interested in relief, they're interested in pork. I think the country is disgusted with politicians who are spending their children and grandchildren's money and I think you in fact would have a winning issue.

HANNITY: I don't think it's ever been this dysfunctional. So, let me ask you some specific procedural issues. So, as -- I have no doubt the president, probably emboldened by the election, emboldened by the "fiscal cliff" deal, is probably going to push this debt limit to the very last second. So, what should the posture be? What should the strategy be? What tactic should be employed by the Republicans knowing what they're dealing with in the president?

GINGRICH: Well, I think that's three things House Republicans ought to do immediately, the first is, they should form an alliance with the 30 Republican governors, 24 of whom have Republican legislatures. People will realize this, 315 electoral votes are being governed by Republican governors, 51 percent of the country lives in states that have republican governors and Republican legislatures. They're doing smart things, they have smart reforms, they're working to save money, they're balancing their budgets and they have lots of ideas. There should be a real alliance between the Republican governors and the House.

Second, they ought to have a whole series of hearings on waste in federal government so people get sickened by the way this government is throwing away our money and our children and grandchildren's money.

And third, they ought to start passing common sense bills right now. If we passed a bill to use the government's lands for oil and gas and other natural resources the same way you would the private sector, we could generate $50 or $60 billion a year additional revenue without a single tax increase. That's the kind of argument we want to have for responsible development of a balanced budget over the next few years.

HANNITY: And so the strategy would be that they should go forward with their agenda and let the president, let the Senate deal with it and at that point, they either say yea or nay.

GINGRICH: Yes. And but don't negotiate, start doing the right thing, start passing the right thing. Start letting it pile up on the Senate side, focus on communicating back home, you've got 230 members who can communicate in their districts and in their states, work with the 30 governors who can also communicate, and then let the president respond to the things you're doing. Don't sit around in a closed room with him where he can dominate the media from the White House.

HANNITY: Would you also agree that they have to be willing to shut the government down, at least some functions of the government, otherwise it will show weakness and they won't be able to strike a good deal?

GINGRICH: Oh, I think that they should be pretty clear from right here on about things that they're not going to appropriate and agencies that ought to plan to be closed because they will get no money out of the Republican Congress at the end of this fiscal year.

HANNITY: All right. Mr. Speaker, always good to see you and of course, Happy New Year to you.

GINGRICH: Take care.

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