How does the White House define 'phony'?

This is a rush transcript from "Hannity," August 1, 2013. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Over the course of the last few weeks, President Obama and his liberal cohorts have been out in full force pushing the White House's official talking points on the many scandals that are swirling around the administration calling them, quote, "phony."

Tonight, we've taken this administration to task. By the way, Mr. President, I hope you are paying attention tonight.

Now for starters, I'm not sure where the White House came up with the erroneous definition of the word phony. In fact, that is the absolute last phrase that I would use to describe the controversies that are plaguing this presidency.

And to help prove our point, we put together a little video and the people you are about to see are not paid actors, they are real patriotic Americans who prove that there is nothing even remotely phony about these scandals. Watch this.

(BEGIN VIDEOTAPE)

PRESIDENT BARACK OBAMA: So far for most of this year, we've seen an endless parade of distractions, political posturing and phony scandals.

UNIDENTIFIED MAN: Last night, border patrol agent, Brian A. Terry was shot and killed in the line of duty.

KENT TERRY, BRIAN TERRY'S FATHER: I want to know what happened to my son that night. Something bad happened out there that night. And I know what happened. I just got a gut feeling more than they're telling us.

OBAMA: Political posturing and phony scandals.

GREG PALKOT, FOX NEWS SENIOR FOREIGN AFFAIRS CORRESPONDENT: On the other side of the U.S. mission walls in this Benghazi neighborhood, the wild mob of attackers breakthrough the main gate of the mission.

JOSEPHINE TERRY, BRIAN TERRY'S MOTHER: My son is dead. How could that be phony? When I was there at the ceremony of the welcoming of the caskets, both Obama and Hillary and Biden and all of the other ones all promised me that they would get back to me to tell me what happened.

OBAMA: Endless parade of distractions and political posturing and phony scandals.

LOIS LERNER, IRS EMPLOYEE: I've been advised by my counsel to assert my constitutional right not to testify or answer questions related to the subject matter of this hearing.

UNIDENTIFIED WOMAN: The IRS sought details of communications that our legislators even in Southern California, that is protected free speech.

UNIDENTIFIED WOMAN: I'm a born free American woman. Wife, mother and citizen. And I'm telling my government that you've forgotten your place.

(END VIDEOTAPE)

HANNITY: And joining me now with reaction, Congressman Jason Chaffetz and Aaron Schock with us.

Congressman Chaffetz, welcome back. Let's see. Brian Terry, four dead Americans, lies have been told. We still don't have answers. The President says it's phony. Reaction?

REP. JASON CHAFFETZ, R-UTAH: That is absolutely appalling. What we've been doing is speaking truth to power. You know, we have been lied to, we have been misled, we have been deceived by this administration. Some horrific, awful, terrible things have happened where people have died. They've lost their lives. They've laid them down for this country.

And rather than telling the truth and coming clean and admitting the mistakes, all they've done is try to personally disparage the people that are trying to get at the truth, distracting people, labeling it something that it's not, and that is just a lie and deception upon the American people that we should not stand for.

HANNITY: Do you think the president himself is responsible for the lies that have been told, the talking points that were put together? Do you think he's aware all these things are lies?

CHAFFETZ: I think at some point the commander in chief has to take personal responsibility for this. It would not continue on in perpetuity for now five years without the commander in chief, the president himself offering some moral direction to what's happening. And when his spokesperson, Jay Carney, stands before the American people and calls these phony scandals, say all this happened a long time ago, what difference does it make from Hillary Clinton. You're talking about the senior most people in the Obama administration, it's a pretty consistent drumbeat. We've been dealing with this for five years. And I see no remedy coming down the pike.

HANNITY: And you've been involved, for example in Benghazi and they obfuscate, they delay, they delay, they don't send the proper information. People invoke the fifth and then say, oh, that's old. Tactic, techniques, strategy?

CHAFFETZ: Yes. It's a regular drumbeat here. Again, going back to Brian Terry, and I'm glad you put that piece together. This person laid down his life. Well, the reality is, the Obama administration knowingly and willingly sent 2,000 weapons, mostly AK-47s, to the drug cartels. We have hundreds of dead people in Mexico. Instead of coming clean, they refuse to give us the documents.

HANNITY: Yes.

CHAFFETZ: And on Benghazi, there can be nothing worse than what has happened in four dead Americans. It's been over 10-and-a-half months now. We have no answers, nobody has been brought to justice, nobody has been killed and you've got an administration under Hillary Clinton that says, what difference does it make?

HANNITY: Yes. And we've been lied too.

Congressman Schock, what's your reaction?

REP. AARON SCHOCK, R-ILL.: Well, look, let's just take the IRS by itself. We were told just a few months ago by the president himself when he did the news conference, that nobody in the Washington, D.C. knew about this, nobody in the White House knew about it, it was a few rogue agents in Ohio that were responsible for this illegal targeting of conservative groups. And in just two months of investigating by the House Ways and Means Committee, we found that those statements by the president were false.

So to your question about what's happening, either the president is lying to the American people or the people giving him information are lying to him. In either case, the president has done a poor job of holding people to account.

We now know that these cases of illegal targeting by the IRS were not just rogue agents in Ohio, but extended to offices in California, in Texas and all over the country. We know now that people in Washington, D.C. knew about it. The IRS agents in Ohio are testifying that they were directed to do this illegal targeting by their supervisors in Washington, D.C.

So the question that begs not just members of Congress but the American people is, how come the president would tell us this if he knows at the end of the day the facts are going to prove otherwise? In other words, we're just starting the investigation here and we're already finding out that what the president has been telling Congress and what the president has been telling the American people is not the truth.

HANNITY: Yes. So we have executive privilege, we have talking points that are false, testimony that's false, the Fifth Amendment is invoked. We're told rogue agents in Cincinnati, none of these things are true. Now, where do you go from here? Congressman Schock?

SCHOCK: Well, I think we follow facts. And I've been very quick to remind my constituents back home and my colleagues here on the Hill, is look, we don't need to jump to any conclusion. We just need to let the facts to lead us to where they go. Because I think where there's smoke there's fire. And you take the case just of Lois Lerner for example who happens to be on the paid administrative leave. Dave Camp, the chairman of the Ways and Means Committee just sent a letter basically detailing Lois Lerner who is at IRS, who is communicating with the Federal Election Commission about the political activities of different 501c3 organizations and so on. Completely illegal for somebody involved in tax exempt status to be communicating with the FEC.

And so, we don't have to make any of this up. In fact, you couldn't make it up if you tried. Some of the questions, I mean, when we find out that the IRS is asking people the content of their prayer, asking the applicants for a 501c3 status. Would you agree not to run for office in exchange for your tax exempt? You can't make that stuff up.

HANNITY: The Tea Party Patriots have created a website, HannityforSanity.com, because they put these ads and they're trying to get these ads out. And it's a testimony of people that are saying, hey, I was targeted because I'm a conservative.

All right. Let me ask you both this question. There's something that the president said -- the president seems to say one thing and do another quite a bit. And I got this quote of the president. I'll read it to you.

"We're constantly reminding Malia and Sasha of the slightly unreal environment that they're in and that that's not the norm and they shouldn't expect to be the norm. And Malia and Sasha have cousins who know what it's like to struggle and know what it's like to have to scrape by. They know that those kids are just as worthy as they are. They just haven't had as much luck."

I'm thinking, wait a minute, why are Liberals -- if his family is struggling and he's worth millions, why isn't he helping them? Congressman Chaffetz?

CHAFFETZ: The cruel part of everything that's happened here, is the president has not paid attention to jobs and the economy. We're worse off for his excessive spending. They went out and spent over $800 billion on this stimulus. We look back now, what did we get for it? We're mired in scandal, we have more than 100,000 -- Sean, there are more than 100,000 additional federal workers on the federal payroll since President Obama took office. Has anybody seen a difference? Does suddenly transportation work better because oh my goodness, we were just short on personnel? No.

And we're doing what he said, what he campaigned on. The reason he's losing independents and liberals is because what he said and what he did are two different things from the NSA scandals that we're going through, I mean, you just name it, it's really getting to those people that are independents and liberals.

HANNITY: Congressman Schock. I mean, I'm thinking if he has got relatives that struggling, I pinpoint out to our daughters, they have cousins that are struggling. I'm thinking, what a cheap skate. I'm like, liberals only generous with other people's money? He can't help out his own cousins that are struggling and spread the wealth around because it's his patriotic duty?

SCHOCK: Well, Sean, not only are they not generous. But when they are generous, they're generous with other people's money. And they're not very good at being generous. Look, I share the president's vision. I want to help people that are struggling, that want to better themselves that are looking for work, that are out of work, that are unemployed. The problem is, his policies don't work. We've had five years of real life implementation of far left wing policies.

They don't work. Just look at the states. Why does my home state of Illinois, the president's home state have twice the unemployment of Iowa, with the Republican governor, Wisconsin with a Republican governor, Michigan and Indiana with Republican governors. The states and Republican conservative policies speak for themselves.

HANNITY: All right. Guys, thank you both for being with us.

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