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What is the best way to address illegal immigration in America?

This is a rush transcript from "Hannity," January 29, 2013. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: We have to deal with the 11 million individuals who are here illegally. We all agree that these men and women should have to earn their way to citizenship. But for comprehensive immigration reform to work, it must be clear from the outset that there is a pathway to citizenship.

(END VIDEO CLIP)

SEAN HANNITY, HOST: All right. That was President Obama laying out one of his sticking points when it comes to immigration reform and the nearly 11 million undocumented people living in this country. Now, this is coming a day after a bipartisan groups of senators unveiled their own proposal. Now, that prompted one GOP lawmaker, and that's Texas Congressman Lamar Smith, to say quote, "When you legalize those who are in the country illegally, it costs tax payers millions of dollars, costs American workers thousands of jobs and it encourages more illegal immigration by granting amnesty, the Senate proposal actually compounds the problem by encouraging more illegal immigration."

So, is he right? Joining me now to debate the issue, from the American Center for Law and Justice, Jay Sekulow, immigration attorney Francisco Hernandez. Welcome both of you back to the program.

FRANCISCO HERNANDEZ, IMMIGRATION ATTORNEY: Hi, Mr. Hannity.

HANNITY: Good to see you.

JAY SEKULOW, AMERICAN CENTER FOR LAW AND JUSTICE: Hi Sean.

HERNANDEZ: Hi Mr. Hannity, how are you?

HANNITY: I'm good. Thank you.

Jay, is this amnesty or do you agree or do you like the Rubio plan?

SEKULOW: I actually, I like the Rubio plan, but the president is calling for amnesty. I think what Senator Rubio has proposed is similar to what President Bush put forward in 2007 when then Senator Barack Obama voted against it. And Sean, he voted against it because of the labor unions, the labor unions didn't like the legislation. So, I think we've got to have the reality check here. You said it correct. Proceed, negotiate, negotiate with caution.

But there is another phrase I think we have got to be careful about, Sean, and that's this whole pathway to citizenship as if we don't have pathways to citizenship in the United States and our immigration laws. We do. We have a pathway to citizenship now. The problem is the entire system is broken. My grandfather came and got citizenship through the pathway. That pathway was through Ellis Island, took 14 years to be a naturalized citizen of the United States.

But I think what Senator Rubio has put on the table with the other senators is a great start. I think what we have to do is proceed cautiously. But President Obama's plan is not Senator Rubio's plan, and we have to be really clear about that.

HANNITY: And Senator Rubio, Francisco has been very, very clear about this. He says, look, we don't control the border. We're going to be back here five or ten years. He says that is deal breaker for him. Right now, President Obama doesn't enforce the laws now. That forced Arizona to have to basically come up with their own law which mirrored the federal law.

So, are you with Senator Rubio -- if they don't control the border first and we don't really solve the problem completely, is that a deal killer for you?

HERNANDEZ: For me?

HANNITY: Yes, you.

HERNANDEZ: Well, listen, whether its deal killer or not, it doesn't matter.

HANNITY: No, it matters.

HERNANDEZ: We have to talk something about the 11 million people that are here. Mr. Hannity, you had me on your show first about six and a half years ago. And we seemed to be at polar opposites. But now, we realize we really have plenty of common ground. We have been trying to enforce the border laws and the fact of the matter is, Arizona passed those laws to enforce the federal government to act.

(TALKING OVER EACH OTHER)

HANNITY: I asked you a very specific question. You're ducking my question. I really want you to answer this.

HERNANDEZ: I'm not ducking your question.

HANNITY: Wait a minute. If we don't secure the border, and by the way, I have been consistent on this all the years I have been on television and radio -- if we don't secure the borders first, we're going to be back here debating the same issues. Do you stand -- excuse me.

Do you stand with me and say that is necessity. We've got to do that first before we deal with the 11 million people, is that fair?

HERNANDEZ: I think that is fair. I think you are going to have to address the concerns about the border safety in order for the Republican Party to pass this bill. I agree with you on that, Sean.

HANNITY: First. All right. All right. Welcome aboard.

HERNANDEZ: But Mr. Hannity, you and I have never disagreed on that.

HANNITY: Well, you seemed a little wishy-washy coming up with that answer. Jay, what else -- what about the procedure?

SEKULOW: Yes. Well, look, let's talk about Sean, border security. Because I think it needs to be viewed as a pre-condition. In other words, not simultaneous granting of whatever work permits or work status and I think Karl Rove who was on right before, was right on that. You got to be very clear on what we are actually authorizing. But you mentioned the border security. Remember, it was the Obama administration that sued Arizona because they were trying to enforce border security.

It's ICE agents that have sued ICE because they can't do their job. So, if we get the pre-condition, and that's what I think needs to be a border security, that is the pre-condition to working through the status of the illegal immigrants that are here, that solves the problem. I think that is a fair compromise and a good way to proceed. But I think we had, sounds like we have some agreement here. That we think the border security has to be that precondition.

HERNANDEZ: I agree, but don't you think that finally these 11 million people are is the first step to border security, then we can separate the people who want to build this country from the people that want to harm this country. That we have to get them coming out of the -- at least, give us their fingerprints, so we know who they are. So, that is the first step. We have to do something -- everybody agrees that we have to do something about it. That's what the whole debate has been for eight to 10 years.

SEKULOW: Francisco, look, the first immigration proposals on real immigration reform came through President Bush, it was defeated by again, people like then-Senator Barack Obama. We need to be really clear. This isn't something new that's come out of nowhere. So that is number one. Number two, Sean, I don't think that the way Francisco is phrasing it works. I think you have to guarantee border security and then you can have -- you can have it in place the status of what will happen to the people that are here, but the questions is going to be, do we have real border security for the precise reason that you said.

It's not the person that is working in the field or working as Karl was saying at the hotels. It is that terrorist. If we don't get this border secured, what prevents a terrorist act? We know they are in Latin America and South America, we know the terrorists are operating down there. Our borders are porous. Secure the borders and then work out the 11 million that are here. I think that's how you do it.

(TALKING OVER EACH OTHER)

HERNANDEZ: Mr. Hannity.

HANNITY: Go ahead.

HERNANDEZ: I think we can put this cynicism aside and be happy that it appears that both sides have something to work together on and have common ground in order to pass some legislation.

(TALKING OVER EACH OTHER)

HANNITY: Francisco, this is not even a bill written, and I'll be honest, I don't trust the president. I don't trust Chuck Schumer, I don't trust Dick Durbin --

HERNANDEZ: You don't trust Marco Rubio?

HANNITY: -- unless we verify and measure that the border is secured.

SEKULOW: Proceed cautiously, Sean, you were right about that. Proceed cautiously.

HANNITY: I don't want terrorists to have the ability to cross into our country, it's a national security issue.

HERNANDEZ: We all agree on that. We all agree on that.

HANNITY: So, we have to secure the border then. It's that simple.

HERNANDEZ: I agree, but let's sit down and work on what we have in common rather than what we have against each other.

HANNITY: All right. Let's do that first. Then we can proceed. And we can discuss all those things you want to discuss.

All right. Guys, thank you.

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