Welcome to 'BoomTown': Washington, D.C.

This is a rush transcript from "Hannity," January 25, 2013. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: And welcome to the special edition of "Hannity." Now for the next hour, we are going to be taking a close look at the business of government in Washington, D.C. and how it is making a lot of people very rich with your hard-earned money.

Now, we sent author Peter Schweizer to our nation's capitol to take us inside this new American boom town. Take a look.


PETER SCHWEIZER, GOVERNMENT ACCOUNTABILITY INSTITUTE: Washington, D.C., the nation's capitol. The seat of federal power. And increasingly a town that is very rich. The local Native Americans named the river Potomac which means where goods are offloaded or where tribute is paid.

Today that tribute comes in the form of trillions of dollars of taxpayer money that floods into this city every year.

While one out of every six Americans worries about where their next meal is coming from, Washington, D.C. has the highest rate of fine wine consumption in the United States.

While one out of four Americans has a mortgage that is underwater, seven of the 10 wealthiest counties in the United States are counties around this region. Washington, D.C. now has the highest per capita income in the entire United States. They just passed Silicon Valley.

You are going to discover that Washington, D.C., a town that used to be a town of sleepy bureaucrats is now a town of Maserati Dealerships, fine wines, luxurious homes and luxurious shops. It's the Washington, D.C. that a lot of people never seen when they take their tours or they go to the museums. But if the Washington, D.C. that reflects the reality of our country today.

The great American writer F. Scott Fitzgerald once wrote that the rich are different from you and me. America's previous boom towns became wealthy because they produced something. San Francisco during the gold rush, Abilene Texas, cattle. And, of course, Detroit during the hay day of the American automobile. All of those boom towns became very wealthy in their time because they created something, they created something new.

This boom town comes, its wealth come from extracting it from the rest of the country. Boom town is something that no one in Washington wants to talk about. When they do they tend to blame the other side. But the reality is today that in Washington, D.C., the business is not politics. The business is money.


HANNITY: And joining us now Peter Schweizer and filmmaker Steve Bannon. Great work. Good to see you. We are going to really open up a can of worms here tonight.



HANNITY: All right. So, Washington, D.C., three of the wealthiest, what, counties in the country, seven of the top ten?

SCHWEIZER: Yes, that's right. That's right. And this is the thing that people don't realize about Washington, D.C. We think of it as a seat of federal power. Politics reign supreme. There is a business. There is a business model there. And really what exists is what we call the permanent political class. We think of Republicans and Democrats and there are philosophical differences. At the end of the day, they are all primarily looking for way to make money. And you don't make money by shrinking government. You make money by growing government.

HANNITY: You know, you made some comparisons. One in six Americans in poverty. One in four Americans, their mortgages are under water.

Meaning, they can't even get their way out of their house without losing.

BANNON: It's the great unreported story of our time right now. Because, you have got -- this is extraction. The rest of the country is in a financial and economic crisis. Much of the country is almost in a depression. And, yet, you have Washington with the three richest counties bordering it seven out of top 10, the big number, per capita income is now higher than Silicon Valley. The great technology engine in the United States.

HANNITY: That's amazing.

BANNON: It's the fourth biggest city generating millionaires. Fourth fastest.


If you look at every statistic about people and incomes, Washington, D.C. And the reason is is because you have a massive federal budget that gets allocated through there.

HANNITY: And it goes a little but deeper, Steve. And you're right on all of these points, no statistics should wake people up. But a lot of this is built in. It's like a pyramid scheme. Because they have baseline budgeting, every budget, every area of government goes up six, seven, eight percent a year. Even though still borrowing nearly 50 cents of every dollar they spend.

BANNON: That's right. And Sean, what's interesting is not only the allocation of federal dollars but there is a lot of money that comes into Washington to determine how that money is going to be allocated. So you have got taxpayer money. You have got special interest putting money in Washington, D.C. to influence the process. To steer money in their way it is a town awash with cash. And the sad reality is that it's only going to get worse, it's not going to get better.

HANNITY: One of the arguments that I have made is the president has so successfully used the class warfare arguments that he has. It's interesting. It seems that the politicians are the ones that are greedy.

Selfish, power hungry. They built up their power by granting people government programs. Spending other people's money. How come they have never got tagged as being greedy and selfish as they now steal from our kids' piggy banks.

BANNON: I think no one has ever turned the camera on them. I think that's what we intended to do. We are going to look at this. And this is a bipartisan problem, this is not just beat down on Democrats although they have the party of big government. This is a permanent -- class that is now kind of form an aristocracy. And that aristocracy, that's why nothing changes in Washington, that's why you have these budget debates. And like you said, you're talking about cuts and growth rates of budgets, not cut in the budgets. It's not a downside.


BANNON: They never cut it. And the reason as you can tell, they've really extracted money through taxes in ability to borrow for their lifestyles. In addition, there is no pressure on them to really cut. They really control Wall Street. It's not that money controls Washington. Washington controls the money. They have an industrial logic to this business model just like any other business model. And that is to extract power from the rest of the country in money into centralized location which is Washington.

HANNITY: You know, you mentioned in your piece, Peter about Maserati Dealership and fine wines and expensive restaurants and the home prices, et cetera.


HANNITY: Are these government employees that buy the Maseratis?

SCHWEIZER: It's probably not government employees. It's people that influence government policies. So, it's people like lobbyists. People that are in government relations, people that won contracting firms who really their businesses whose only clients or only customer is the federal government. So, it's money that gets sloshed around in all those different ways.

And the reality is that, you know, I lived in Washington, D.C. in the 1980s, it was really kind of a middle class town with some wealthy areas.

It's a completely different place now. And part of it is the size of the federal budget has grown enormously. And, of course, they take the cut of everything that comes out.

HANNITY: And what are they producing? You are right. We talked about an oil boom. A gold rush. Cattle, et cetera, and all these other -- they have produced something. What is Washington producing except record debts, record deficits and telling old people we are going to means test your Social Security, we're going to raise the retirement age about one hour before you die. So, you get at least an hour's word of what you paid into your whole life.

BANNON: Well, that's it. They have a business model. That business model is government. And it's bigger government. And as long as you have the ability to borrow, right? As long as they can take tax receipts and borrow, they're going to continue to do that. And so, that's why you are seeing now. We are trying to put the camera on this business model. Let you see the lifestyles of the rich and powerful.

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