Obama's second term goal to 'break' the Republican Party?

This is a rush transcript from "Hannity," January 22, 2013. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: It's billed as an effort to unite the country, but in the end, President Barack Obama's second inaugural address turned out to be nothing less than a hyper partisan campaign style stump speech. And years from now, it will be remembered not only for its divisive combative tone, but also because it exposed the blueprint for Obama's radical second term agenda. Let's take a look.


PRESIDENT OBAMA: We must make the hard choices to reduce the cost of health care.

OBAMA: We will respond to the threat of climate change.

OBAMA: Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law.

OBAMA: Our journey is not complete until no citizen is forced to wait for hours to exercise the right to vote.

OBAMA: Our journey is not complete until we find a better way to welcome the striving hopeful immigrants who still see America as a land of opportunity.


HANNITY: All right. While Obama remains hell-bent on tackling national security threats like climate change, the president made no substantive references to economic matters like putting you the American people back to work, nor that he adequately address the single biggest threat that we face as a country and a world, that of course, being the rise of Islamic extremism. Instead, he just wants you to believe that all is right with the world.


OBAMA: A decade of war is now ending. An economic recovery has begun.


HANNITY: Joining me now with analysis of the president's second term agenda and a preview of tomorrow's vote on the debt ceiling is House Majority Whip California Congressman Kevin McCarthy. I promoted you earlier, I apologized. Welcome back.

REP. KEVIN MCCARTHY, R-CALIF.: Thanks for having me, I appreciate it.

HANNITY: All right. First of all, let me -- to the issue, that was all, we just played it, that's it, that's all that he said about the economy. Eight point three fewer Americans are working today than there were four years ago, what is your reaction to that?

MCCARTHY: Well, just shows you how out of touch he is. I mean, normally when a president gets elected, especially, remember, he had no landslide here either. It's the time that you build together, you find common ground and you work forward. This person's main goal is to continue to try to break the Republican Party. He's out of touch where America is at and what he's trying to do. It was more of a speech for a progressive party agenda not something for all of America to get behind.

HANNITY: Yes. How ironic, too, the president lecturing the country on tone and civility once again. Did he forget that his campaign accused Mitt Romney of killing a steelworker's wife and not caring about sick kids and all that? Seemed like he forgot that part and the media did as well.

MCCARTHY: Well, when you listen to the speech, normally on a big presidential speech just as this, in the inaugural, you usually have a take away line. What is the take away line that unites the country? And normally, when an election is over, it's time to govern. What did he do? He moved his campaign committee over, so he's keeping the campaign going when he can't even run for a further office.

HANNITY: Never ending campaign.

MCCARTHY: This is what this individual does. He can't govern, but that's what he continues to do is just politics.

HANNITY: All right. You're a leader of the Republican Party in the House, one area of government where I hope conservatives will rule. Because if not, this agenda goes unchecked. I was not happy, Congressman, with the way the Republicans handled the "fiscal cliff." I felt you did your business, you passed your budget, the Senate hadn't passed the budget in three and a half years. Then there were negotiations and then there was a last minute deal.

You have a plan to deal with the debt ceiling. I want you to explain it. I've been skeptical of it, but I'm coming around, I'm beginning to see that there might actually be some wisdom behind it and I'm giving you credit as a strong credit of the cliff deal. Explain it.

MCCARTHY: Well, what's going forward right now, we do not want to give any long-term new debt limit as you go forward. So what we're saying is, here is the Senate that has not produced a budget. You know it, Sean, your listeners know it, but not many across America. The last time this Democrat-controlled Senate passed a budget, the iPad wasn't even introduced yet and they've already gone through what, through three different versions?

So, we're doing a short-term moving the debt limit past the April 15th deadline, because the most responsible thing any elected officials do is do a budget. How do you plan for the future? So, we move it to there, and if you don't pass the budget you don't get paid. And you know what? Before that time, those cuts that we fought for in the last debt limit? They go into effect the first of the month -- March.


HANNITY: Sequestration.

MCCARTHY: Sequestration, people, they don't to what that is, they don't know how to spell that, but remember, that was the cut, dollar cut for the debt limit increase last time, and we're holding the president to it. And we're going through that, so you're going to see for the first time government being cut year over year by this Congress. We have done it now three years in a row, that hasn't happened since World War II, only two other times.

HANNITY: Now, the president just got his big tax increase, he got everything he wanted. Now, he says he wants more. Now, Chuck Schumer is saying -- I'll play this in the next segment -- that he wants tax reform, but tax reform means another increase of revenue, in other words, another increase in taxes. Is this even negotiable? Will House Republicans hold the line? And how do you stop this president?

I mean, can you shut down the government? Are you willing to shut down the government if the president won't deal with entitlement reform where all the spending is?

MCCARTHY: Look, you have to deal with entitlement reform if you want to save Medicare, that's where the president has been so wrong. We've passed one of the toughest budgets anybody has looked at, saving Medicare but also reforming where we grow this economy, 13 million people are out of work, we put them back.

Look, this is a very conservative Congress, we've stand on our met, we've tried to move through a balance budget. This fight is going to put us on stronger ground but more importantly the American people are going to be with you from the standpoint that if you can't pass the budget, you shouldn't be paid and how could you move forward giving anybody a debt limit increase if they can't tell you how they're going to spend it.

HANNITY: And you'll hold the line on the issue of-- the president got his tax increase, no more tax increases, no more reforms that we say are tax reform, but end up being tax increases, that won't happen?

MCCARTHY: Look, the tax increases automatically happened last time based upon a vote of 12 years ago, article one section seven says, any taxes start in the House. This house is not raising taxes because that hurts the small business. That hurts the economy. We're going to do tax reform to let people keep more of what they earn, grow an economy and be able to save for your children's future and buy a new house.

HANNITY: All right. Congressman, we're going to continue to follow it. We do appreciate you coming on. Thanks for being with us.

MCCARTHY: Thanks for having me.

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