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Hannity

Cruz picks time and place in Trump debate challenge; Bush, Kasich, Christie talk Iowa

This is a rush transcript from "Hannity," January 27, 2016. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: This is a Fox News Alert. And we are five days out of Iowa and less than 24 hours from the Iowa caucuses, and tonight, we're going to speak with Texas Senator Ted Cruz, former governor Jeb Bush, Governor John Kasich and New Jersey governor Chris Christie.

But first, Senator Ted Cruz just issued moments ago this challenge to Donald Trump.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ, R-TEXAS, PRESIDENTIAL CANDIDATE: I'm going to propose a venue, Western Iowa Tech, Saturday night in Sioux City. We already have it reserved...

(CHEERS AND APPLAUSE)

CRUZ: ... 8:00 o'clock Saturday night, a two-hour one-on-one debate.

Now, if gentle Donald...

(LAUGHTER)

CRUZ: ... cannot handle Megyn Kelly, how about for a moderator instead Mark Levin?

(CHEERS AND APPLAUSE)

CRUZ: Or if he doesn't like Mark Levin, how about Sean Hannity?

(CHEERS AND APPLAUSE)

CRUZ: And if he doesn't like Sean Hannity, how about Rush Limbaugh?

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

HANNITY: All right, that's not all. Moments ago, a pro-Cruz super-PAC, Keep the Promise, tweeted, quote, "Donald Trump, debate Ted Cruz one on one in Iowa before the caucuses. We will donate $1.5 million to veterans' charities, #iowacaucus, #greatdeal."

Here with reaction, 2016 Republican presidential candidate Texas senator Ted Cruz. This has now taken on a life of its own.

CRUZ: Yes.

HANNITY: All right, so you -- Donald Trump apparently is not showing up tomorrow.

CRUZ: It is an amazing thing for a candidate who wants to compete in Iowa to say to the men and women of Iowa that he doesn't respect their views enough to show up at the debate.

Look, I think anyone that wants to win the Iowa caucuses owes it to the men and women of this state to show the humility, to subject yourself to the voters, to answer questions. And that is certainly what I am working to do. I think it's stunning Donald has refused to do it.

But listen, if your colleague, Megyn, is so scary for him, then I've suggested you could moderate, Mark could moderate, Rush could moderate...

HANNITY: I'll be glad to do this. I'd gladly do that.

CRUZ: You would be fantastic. And we've got a venue at Western Iowa Tech.  It's already reserved. I told Donald he can invite half the people and we'll invite half the people. And you know what? If you're too scary, then we said, fine, we'll do no moderator and just have the men and women of Iowa ask questions. That's what we owe the voters.

HANNITY: All right, you -- this group -- because this is not you -- this group laid out parameters that Mr. Trump would have to agree to in order to secure the $1.5 million for America's vets. The debate must take place before this coming Sunday in Iowa. The debate is just between the two of you. The candidate -- you guys get to pick the moderators between yourselves, and the debate is only one hour long. And $1.5 million goes to military charities.

CRUZ: So that's what their press release said. And you know, I got to say, Donald, when he backed out of the debate, he said he was doing it because he was very concerned about veterans. Listen, we all care about the incredible brave men and women who served our country. This is an opportunity for $1.5 million, apparently, to go to veterans' charities if simply Donald will respect the men and women of Iowa and answer their questions, rather than refusing to stand before them.

HANNITY: How big a venue is this? How many people are we talking about?

CRUZ: It seats about 800 people.

HANNITY: OK.

CRUZ: So he can invite about 400. We'll invite about 400.

HANNITY: Can we get a bigger venue?

CRUZ: Look, if he- we could...

HANNITY: Get an arena.

CRUZ: We could take the questions from the people. I mean, that's really what's important, is that, you know, on Monday, we're going to complete what's called the "full Grassley," which means that I will have traveled and done an event in all 99 counties in Iowa, stood before voters and looked them in the eyes.

And it's the reason why this presidential primary begins in Iowa and New Hampshire because, look, if we began in a big state, if we began in California, New York or Texas, it would all be slick Hollywood TV ads.  Here in Iowa -- you know, there's an old joke. Are you voting for so-and- so for president? No, I couldn't possibly. I've only met him five times.

HANNITY: Yes. That's -- that's what it's like here. All right, what does this really tell you? I tend to not think he's afraid of Megyn Kelly.  What do you think it is? Why do you think he doesn't want to do this?

CRUZ: Listen, I don't think he's afraid of Megyn, actually, and I don't think he's afraid of me. I think he's afraid of the voters. I think he is afraid of the men and women of Iowa because he is campaigning, telling people he's a conservative, but his record is directly contrary to what he's saying.

So for example, on amnesty, he has made a big thing campaigning on illegal immigration. But when I was leading the fight, along with Jeff Sessions and Steve King, against Marco Rubio's amnesty bill, Donald Trump was publicly supporting amnesty. He was tweeting in support of Rubio's amnesty bill. He was criticizing Mitt Romney for being too tough on illegal immigration.

HANNITY: Yes, when he was talking about self-deportation.

CRUZ: And Donald's proposal today as a presidential candidate is that he still supports amnesty. What he says is we should deport the people, but then he says once we deport those here illegally, they should be able to come back in as citizens.

As you know, that's called touchback. It's something establishment Republicans have pushed for a long time. You fly them home, they touch the ground briefly and then they come back as citizens. I think that's wrong.

And so many of Donald's supporters don't know that he supports amnesty right now. Many of them don't know that he agrees with Hillary Clinton on health care!

HANNITY: Let me talk about the state of the campaign for you. It's neck and neck here. And I mean, the polls have been insane. What I find fascinating, if you go back to 2000, 2004, 2008, 2012, the polls in Iowa historically have been awfully wrong for both Democrats and Republicans.

CRUZ: Yes. Yes.

HANNITY: Why do you think that is? And what does that tell you about this cycle?

CRUZ: Well, I think a lot of the pollsters are very bad at predicting who's going to turn out. The dynamic we're seeing playing out is really remarkable.

The Washington establishment is abandoning Marco Rubio in droves. I think they've decided Marco can't win, and they're rushing to support Donald Trump. And that is a -- and they've said the reason for that is that they can work with Donald. You know, Bob Dole and Trent Lott both said Donald will cut a deal. We can work with him. And in fact, Donald, when he was laying out why he thinks people should vote for him, he said, you know, Ted's problem is he won't go along to get along. He won't cut deals with the Democrats.

Now, I got to say, as I've campaigned all over the country, I haven't met a single Republican who says the problem with Republican leadership in Washington is that they need to cut more deals with the Democrats. People are frustrated with the betrayal.

And what we're seeing on the flip side is conservatives are uniting behind our campaign. Dr. James Dobson is supporting our campaign. Congressman Steve King, the strongest conservative in Iowa, is supporting our campaign.  Bob Vander Plaats (ph) is supporting our campaign. Just yesterday, Tony Perkins, the leader of the Family Research Council, is supporting our campaign. Rick Perry is supporting our campaign.

And it is extraordinary to see conservatives uniting. This is providing a clear choice to the men and women of Iowa.

HANNITY: What happens if you win Iowa -- and you're showing the potential you could -- tell us how you see the rest of the campaign unfolding.

CRUZ: Well, listen, I am very, very encouraged. Iowa is neck and neck. I hope we win. I believe we can win. It depends on turnout. It depends on conservatives coming out 117 hours from now, Monday night at 7:00 PM.

HANNITY: You've got it down to the minute, too!

CRUZ: Oh, we are...

HANNITY: And the seconds?

CRUZ: ... every minute.

HANNITY: Yes.

CRUZ: This is all about turnout. Look, what I am asking folks to do is show up and caucus for us on Monday, and to bring others -- bring your mom, bring your son, bring your next-door neighbor.

And I don't believe the Iowa caucuses will be won from a TV studio in Manhattan or from New York or from D.C. It's going to be won on the ground here in Iowa, neighbor to neighbor, friend to friend, Iowan to Iowan. And our strength is a grass roots army.

Now, regardless of what happens here in Iowa, I believe we can win. I hope we win. But regardless, we're right now very strong in New Hampshire.  We're very strong in South Carolina. And we are incredibly strong across the super-Tuesday states, the so-called SEC primary.

HANNITY: Let me talk about -- let's say you become the president.

CRUZ: Yes.

HANNITY: And you know what? I would agree with you. And it's interesting. An establishment person called me on day. Did you hear that?  He's comparing Republicans to drug dealers and the cartels.

(LAUGHTER)

HANNITY: So apparently, that struck a nerve with some people. But you stood up, you filibustered, and you got called a wacko-bird.

CRUZ: Yes.

HANNITY: Now, from what I remember, every other congressman and senator that's a Republican, didn't they promise to repeal and replace "Obama care"? So -- you know, because some people say, Well, Ted Cruz, he may not get along with these people.

CRUZ: Right.

HANNITY: What does that mean if you are in that office and they are on the other side of the Capitol Hill?

CRUZ: Listen, if you are going along and getting along in Washington, you're doing something wrong. You know, what I've done from the first day I arrived in the Senate has been two things, tell the truth and do what I said I would do.

And it says something about Washington, D.C., that those are considered radical and extreme acts, that when I said I would fight with every breath in my body against "Obama care," I actually meant it.

When I said I would fight against the debt that's bankrupting our kids and grandkids and I would stand up against the debt ceiling, the Republican establishment was shocked. I mean, they basically say, No, no, no, no.  That's what you say to the voters back home, you actually don't do it.

HANNITY: Did they actually say that to you?

CRUZ: Just about. It is very, very close.

HANNITY: That's chilling.

CRUZ: It is -- you know, as you know, I wrote last year book called, "A Time for Truth," and the very first chapter is entitled "Mendacity," and I describe the fight over the debt ceiling. I described how Republican leadership asked every Republican to consent to lowering the threshold to making it easier for Harry Reid to jack up the debt ceiling. And we were told, If you do that, it will happen, and we can vote no and we can go tell our constituents...

HANNITY: Here's a...

CRUZ: ... we opposed the thing we just consented to allow happening.

HANNITY: There was a poll, I think it was a Fox poll, 60-some-odd percent of Republicans felt betrayed by Washington Republicans.

CRUZ: Yes. Yes.

HANNITY: So there's obviously...

CRUZ: And I'm in that 60 percent.

HANNITY: And many -- I am, too.

CRUZ: Yes.

HANNITY: Although I'm a registered Conservative. So sorry.

(LAUGHTER)

HANNITY: My question is, did they not create this insurgency here in that sense? But yet they don't see that they have played a part in this.

CRUZ: Look, Washington is out of touch. The most frequent thing you hear if you travel this country is, We elect people that go to Washington, they stop listening to us. They're not listening, they're doing what we say.  You hear this from Republicans, from Democrats, from independents, from libertarians.

You know, Sean, almost every day at events across this country, I have people come up to me who say, I'm a Democrat. I voted for Barack Obama.  And I'm with you now. What we're saying doesn't make any sense, and I want someone who will tell the truth and will stand up for the Constitution.

HANNITY: All right, stay right there. We're going to come back. We have much more with Senator Ted Cruz.

Breaking news tonight. A super-PAC -- actually, a couple of them -- that support Ted Cruz -- it's actually called Keep the Promise -- has put out a challenge that if Donald Trump will debate Ted Cruz one on one between now and Sunday, $1.5 million will be given to a military charity or charities.

All right, now, we have asked Senator Ted Cruz -- we jumped on his campaign bus earlier today, and we have a lot more coming up. We'll talk to him about that.

And then later -- we caught up with former Florida governor Jeb Bush at his headquarters in Des Moines, and we're going -- we met him at campaign headquarters. So is Jeb's brother going to join him on the trail any time soon? That answer and Governor Kasich and Governor Christie will join us Straight ahead.

(COMMERCIAL BREAK)

HANNITY: And welcome back to "Hannity." And we are live tonight from Des Moines, Iowa, and we continue with Senator Ted Cruz.

All right, what drives you? I mean -- and this may sound like a crazy question. I know what bothers me the most. I feel like America is in decline.

CRUZ: Right.

HANNITY: I love this country. It's been so good to me -- 95 million Americans out of work, 50 million in poverty, 46 in food stamps, and then you got median income down. And then I got Iranian mullahs...

CRUZ: Yes.

HANNITY: ... that are going to have a nuclear weapon.

CRUZ: Yes.

HANNITY: What motivates you to do this every day and five, eight stops a day?

CRUZ: Look, I've had two passions almost my entire life. The first is the Constitution. I mean, going back from when I was in high school and studied and memorized the Constitution...

HANNITY: You and Mark Levin are the only two that I know that have done that!

CRUZ: But...

HANNITY: Go ahead.

CRUZ: Well, you know, and then Mark would tell you, Sean, the Constitution matters! You got protect the Constitution!

(LAUGHTER)

CRUZ: And it's almost as good as your Mark.

(CROSSTALK)

(LAUGHTER)

HANNITY: All right, we're competing Mark Levin's here. But you're right.  But now I have a passion for it.

CRUZ: Yes. Yes. It is, and it has been a passion my whole life. And then the second passion comes from my family story. You know my dad.

HANNITY: Yes.

CRUZ: You know, my dad as a teenager was imprisoned and tortured in Cuba.  And when he came to America, he came here with nothing. He was 18. He had $100 in his underwear. And washed dishes making 50 cents an hour.

And when you're growing up in Texas, as I was, and you're hearing stories of your father being beaten, have his nose broken, having his teeth shattered out of his mouth, and he talks about -- I remember that 1980 election between Reagan and Jimmy Carter. I was 9 years old in that election. And I remember standing by that TV and cheering for Ronald Reagan as a 9-year-old!

HANNITY: I was 18. first time I pulled the lever.

CRUZ: And it was -- and that difference -- you know, when your dad has seen freedom taken away, there's urgency to defending freedom. And when you ask me at 3, 4, 5 years old what I wanted to do, I would have said I want to fight for freedom because my dad would say when I was a little kid, If we don't have principled men and women in office -- that's the only way we protect ourself from tyranny.

HANNITY: Hillary said about one of the candidates, I don't know who, but I think she was referring to all candidates, is they don't think America is great. I think America is great, but America's in decline.

CRUZ: Look...

HANNITY: And a third Obama term is going to -- not going to help it.

CRUZ: I believe in America with all of my heart, the principles that built America, the free market principles, the constitutional liberties, the Judeo-Christian values.

But for seven years, we have galloped away from it. We've seen a federal government bankrupting our kids and grandkids. You know, my daughters, Carolyn and Katherine -- Caroline is 7. In her life, the national debt's gone from $10 trillion to over $18 trillion.

HANNITY: Crazy.

CRUZ: I mean, I think about what kind of world am I giving my daughters?  And you know, when you're on the campaign trail -- we're going 16 hours a day, six days a week. And yet I jump out of bed every day because I think our country's in crisis. And I feel so blessed to have the opportunity to fight to save it, and I am inspired. When you see the grass roots movement across Iowa and across the country, millions of courageous conservatives rising up to save this country, it inspires me!

HANNITY: Donald Trump says he's the most electable. Actually, the polls show you and Rubio do a little better in the matchup. I don't trust these polls. They're still early. Walk me through a general election against either Hillary, Bernie, Biden...

CRUZ: Sure.

HANNITY: ... you know, Elizabeth Warren, whoever it ends up being, right?

CRUZ: The polls show Trump loses to Hillary and I beat Hillary. That's part of the reason why you've got so many Democrats echoing Donald's attack on me, is they don't want to face me in the general election. How do we win? Number one, we win by standing for truth, but speaking the truth with a smile! I think 2016 is like 1980. We win by painting in bold colors, not pale pastels.

HANNITY: Has the country changed that much in 30-some-odd years?

CRUZ: You know, it's changed a lot less than people think. A lot of the mainstream media wants us to think it changes, but we win by bringing back to the polls the millions of evangelical Christians who stayed home. 54 million evangelical Christians did not vote in 2012!

HANNITY: I don't -- what do you worry about in an electoral map where if you're a Republican presidential candidate, you're told you got to run the table? You got to win Florida, North Carolina, Virginia, Ohio, then New Mexico, Colorado, and pick off Iowa and New Hampshire.

CRUZ: Well, look, Colorado, I've got a 10-point lead against Hillary Clinton right now. And the other key to changing the map...

HANNITY: You're not in favor of legalizing marijuana.

CRUZ: I am not.

HANNITY: But you're for the states.

CRUZ: Yes, I am for -- the Constitution answers a lot of questions. But the other key to winning is changing the electoral map. You got to bring out evangelicals, but you got to bring out Reagan Democrats, working class, blue collar Catholics across the Midwest up into New England.

CRUZ: Can you win Pennsylvania?

CRUZ: Absolutely, we can win Pennsylvania. We can win Ohio. We can win Wisconsin. We can win Michigan. We can win New Hampshire. But you can't do it if you support amnesty.

HANNITY: Last question...

CRUZ: You can't do it if you're not -- because if you look at those Reagan Democrats, they're steelworkers, they're auto workers, they're truck drivers...

HANNITY: They're getting killed!

CRUZ: ... and mechanics -- they're getting hammered by the Obama-Clinton economy and the establishment Republicans that want amnesty. Whose jobs do you think they're taking?

HANNITY: Low-skilled labor, let's say, in that case. You have more people competing, driving down wages and opportunities.

CRUZ: Yes.

HANNITY: It's really crazy. You'd build a wall. How fast would you get it up?

CRUZ: We will build the wall, we will triple the border patrol, we'll increase fourfold the fixed-wing and rotary-wing aircraft. On day one, I will revoke every one of Obama's illegal executive orders, including his amnesty.

And we will solve illegal immigration. There's a reason Steve King is supporting me because he knows that I stood and fought when the battle was being waged.

HANNITY: Will Hillary be the candidate for the Democrats?

CRUZ: You know, I would not claim to be an expert on Democratic primary voters. I will tell you this. I can't wait to stand on a debate stage with Hillary Clinton. And if Donald is so afraid of Megyn Kelly, how on earth is he going to stand up to Hillary, particularly given that he's contributed to Hillary? He gave $100,000 to the Clinton Foundation!

HANNITY: I would be willing to moderate a debate and take questions from the crowd. I'll bring -- Mark -- I would go there with Mark. I'll go there with Rush, anyone who wants to do it. So...

CRUZ: I think it'd be fabulous...

(CROSSTALK)

HANNITY: ... $1.5 million this PAC is saying that...

CRUZ: So I understand it.

HANNITY: Yes. All right.

CRUZ: And the most important thing for the people in Iowa to know is Monday night, it's all about turnout. Come out and caucus. Bring your friends. If conservatives stand together, we're going to win.

HANNITY: All right, Senator. Thanks for your time.

CRUZ: Thank you, Sean.

HANNITY: Thank you.

And coming up -- we caught up with former governor Jeb Bush at his headquarters earlier today and asked if his brother will be joining him on the campaign trail. We'll have that next.

Also later, countdown to Iowa continues. We'll check in with Governor John Kasich and Governor Chris Christie here as we continue from Des Moines.

(COMMERCIAL BREAK)

HANNITY: And welcome back to "Hannity." And only five days to go until the Iowa caucuses, and former Florida governor Jeb Bush has been pounding the campaign trail. Earlier today, I met up with Governor Bush at his Iowa headquarters, where he talked about tomorrow's big debate, and of course, the state of his campaign. Take a look.

(BEGIN VIDEOTAPE)

HANNITY: All right, we are here. Governor, good to see you.

JEB BUSH, R-PRESIDENTIAL CANDIDATE: Hi, Sean.

HANNITY: We're in Des Moines...

BUSH: Yes.

HANNITY: ... at your headquarters. It goes way back there.

BUSH: Yes.

HANNITY: How are you all doing? Is this a phone bank? How are you guys doing?

(CHEERS AND APPLAUSE)

HANNITY: You know, I just asked you off air. I want to ask you on air.  George W. Bush has not been out on the campaign trail much with you.

BUSH: No, he's -- he's been helpful. He's raised money. But we're going to get him out and get the old boy off the -- dust him off and get him out there.

HANNITY: See if he has the same skills?

BUSH: I think he does.

HANNITY: Yes.

BUSH: He turns out to be the most popular Republican in -- that's alive.

HANNITY: Yes. You know...

BUSH: So it's not a bad thing to be the brother of a great president and a great brother, so...

HANNITY: He said to me way before anybody else that he wanted you to run.  When did he first bring it up with you?

BUSH: He has been consistently that way for the last three or four years.  And you know George. He's disciplined and focused. And he just -- look, he's -- he's one of the guys that served in that office. He knows what it takes. And we need leadership right now, and I think he thinks I can do it.

HANNITY: All right, we have the final debate, five days out of Iowa. We got some news where one of your competitors is not going to be showing up, apparently. What is your reaction to that?

BUSH: Well, first of all, if he can't deal with Fox News questions, then how's going to deal with Putin? My response is that this is -- we're running for the presidency of the United States, and if Donald Trump actually believes that he's been treated unfairly by the press -- I mean, that's pretty laughable, given how he manipulates the press like a fine -- he's like a, you know, violinist playing a Stradivarius.

He just totally -- his message is -- he's a genius at this stuff. So I'm not sure why he's doing it. Doesn't make sense to me. People in Iowa, I don't think, will think it's a good idea that he kind of ignores this. And so it changes the dynamic for sure.

HANNITY: One of the things that has surprised me -- I mean, there has been movement in the polls, but the last couple of months really just between Cruz and Trump. Why not any more movement in the polls? That's sort of been static, in my mind. What do you think?

BUSH: Well, the national polls don't matter and they are static.

HANNITY: Right.

BUSH: And you see a little bit of moving of the top two. Everybody else is pretty much where they've been. But in the early states, there's been some pretty good movement. I mean, in New Hampshire, we're making -- we're making a move. Kasich (INAUDIBLE)

HANNITY: Well, you've also come up nationally, I've seen, in Reuters in double digits and I saw you in double digits in New Hampshire.

BUSH: Yes.

HANNITY: What -- how -- define success in Iowa for you?

BUSH: Beating expectations, for sure. And we've got the team to do it.  I'm totally confident that we're going to be able to do that.

Look, as people get closer to this, they want to know, do you have a steady hand? Do you have a backbone? Can you make tough decisions? And the advantage of being a governor, a reform-minded governor, comes into play because others talk about what they'll do. I can tell people what I want to do but also what I did. And that's a big advantage.

HANNITY: When I first interviewed you about a year ago at CPAC, I went over...

BUSH: That was wild.

HANNITY: Yes, it was fun, wasn't it?

(LAUGHTER)

HANNITY: That was pretty (INAUDIBLE) I remember it well. I went -- I read 400 pages on you, and it's still locked up here in my memory somewhere.  But I read -- and then I read your record as governor and the jobs you created and you went to a AAA bond rating and you were the first state to implement vouchers, et cetera.

BUSH: Yes.

HANNITY: And I don't know why that story seems to have not gotten out. It seems that early on, the narrative on you with conservatives was, immigration and Common Core. But not the record.

BUSH: Yes.

HANNITY: What do you say to people?

BUSH: So when I go do town hall meetings in Iowa, which I'll do about eight of them between now and Monday, and New Hampshire, I can tell the Jeb story unvarnished by, you know, the intermediaries. And that's a story of the most conservative, reform-minded governor in 30 years in the country, bar none. And that story is one that people...

HANNITY: Tell us that story, for the people that maybe don't know it. I mean...

BUSH: Sure.

HANNITY: I know you've done a lot of interviews. You've talked some about it, talking to (INAUDIBLE)

BUSH: So we cut taxes every year, totalling $19 billion. We eliminated career civil service protections for state workers and reduced the government workforce by 11 percent. Three million people moved to Florida during my time. They voted with their feet. We're one of two states to be AAA bond rated.

We ended Affirmative Action and replaced it with a leadership model that actually allowed for minorities to -- more minorities to attend our universities. We created an environment where 1.3 million jobs were created. We led the nation in small business growth.

It's record...

HANNITY: Balanced budget, surpluses...

CRUZ: $9 billion of surpluses, eight hurricanes, four tropical storms ion two years. No one complained about Florida's leadership. We...

HANNITY: By the way, in New York, they're still plowing the streets that they haven't touched from last Saturday's snowstorm!

BUSH: Yes, that was a pretty big storm, but eight hurricanes and four tropical storms and $150 billion of losses. You know, we put on our big boy pants, didn't complain, didn't blame the federal government. We went out and did it.

HANNITY: Yes.

BUSH: And on education, no one comes close to the record we have in terms of turning the system upside down on behalf of kids. So it's -- when I get to tell the full story and then say, You can trust me when I say that I'm going to disrupt what's going on in Washington because I was the disruptor in Tallahassee -- balanced budget amendment, line-item veto, power back to the president, term limits, allowing -- disallowing lobbying by elected officials, six-year lobbying ban -- all of this, whether it's done by constitutional convention or by Washington, we need to do it.

HANNITY: Yes.

BUSH: And we need career civil service reform in Washington, D.C., as well.

HANNITY: You seem energized, optimistic. Third place in Iowa?

BUSH: You know, I'm not in the game of predicting all this stuff, but I am -- I wake each day saying, Wow, I'm running for president of the United States. This still is the greatest country on the face of the earth.

We talk it down a lot, but our military is still second to none. We need to rebuild it. We need to make sure that America is engaged in the world to keep us safe. But this is the time that we should be saying, Let's fix these things so that we can lead the world for next two generations of time (ph). I -- I -- to me...

(CROSSTALK)

HANNITY: Look, I think the economy -- I would view America, yes, as the greatest country ever, but in decline, and we need to fix it.

BUSH: Exactly.

HANNITY: Stop it.

BUSH: Completely agree. It's our government that's messed up. The American people can still rise up.

HANNITY: Definitely.

BUSH: They need a leader that believes in them.

HANNITY: All right, I got to also give you credit...

(CHEERS AND APPLAUSE)

HANNITY: I am a big -- where are you going? Woody Johnson!

BUSH: Woody!

BUSH: Woody!

(LAUGHTER)

HANNITY: I'm a big Jets fan, and the owner of the Jets (INAUDIBLE) Woody Johnson over there. He's been a big supporter of yours.

BUSH: Woody's all in for Jeb. He's been (INAUDIBLE)

HANNITY: Ten and six!

(CHEERS AND APPLAUSE)

BUSH: Ten and six, ten and six, this year. And beat the New England Patriots, which was a great Sunday.

HANNITY: All right, thank you.

BUSH: Wait. By the way. We don't disparage Patriots in the campaign.

HANNITY: I got it.

BUSH: I have several favorite states. Iowa, New Hampshire, South Carolina, Nevada.

HANNITY: Let me guess.

BUSH: Treat them with a little more respect, Sean.

HANNITY: I got it. Governor, good to see you. Thanks for your time, appreciate it.

BUSH: Thank you. Thank you.

(APPLAUSE)

(END VIDEOTAPE)

HANNITY: All right, coming up, live on our set, Ohio Governor John Kasich is now surging in the polls in New Hampshire. But what outcome is he anticipating in Iowa on Monday? He'll join us next. Then later, New Jersey Governor Chris Christie, he has been hitting the campaign trail hard. He'll be live on the set, all of that and more as we continue live from Des Moines.  

(COMMERCIAL BREAK)

HANNITY: Welcome back to HANNITY. There are only five days left until the Iowa caucuses right here in Iowa. But some candidates are already looking ahead to New Hampshire. Our next guest has been gaining traction in the polls in the granite state. Joining us, the governor of the great state of Ohio, 2016 Republican presidential candidate John Kasich.

All right, let me get right to it. You become president. Walk me through a Kasich presidency. I know your record in Ohio and I know your record as the House budget committee chairman.

GOV. JOHN KASICH, R-OHIO, PRESIDENTIAL CANDIDATE: First 100 days we will put in a program to freeze all federal regulations for one year.

HANNITY: Freeze everything?

KASICH: Except for health and safety. We do a complete review of all federal regulations. And Sean, anything over $100 million the Congress is going to have to vote on it, period.

Secondly, lower taxes for businesses. Take it down to 25 percent corporate tax rate. Bring the profits home from Europe at a very low rate to get started and then no double taxation, and write off your investment plan and equipment.

HANNITY: Would you spend less than they spent the year before, because government never does that?

KASICH: Let me get to it. I'm getting to it. Then we would lower the individual taxes, and then we have a fiscal plan, fiscal restraint. We look at everything. It's $100 billion more for defense, Medicare form seven to five, Medicaid from five to three, frees all nondefense discretionary and that will give us the job growth we need. See, that's what -- what you need to create jobs is you need regulatory common sense, you need lower taxes, and you need a fiscal plan.

HANNITY: The repatriated money, the trillions of dollars overseas, you give them a tax break to bring it back?

KASICH: I'd have five or six percent, something like that. But then after that, no more double taxation. If you pay somewhere else, you don't pay here. That's a good plan. We have a plan on --

HANNITY: But baseline budgeting assumes an eight percent increase.

KASICH: No, no, no. We don't assume anything like that. We're going to freeze all nondefense discretionary, period.

HANNITY: Freeze it?

KASICH: Freeze it.

HANNITY: Not a penny more.

KASICH: No. And we might even do better than that. We need to create jobs. Look, the wages have not grown fast. We are in Ohio, faster than the national advantage. We have to get the job growth up. That's what it's all about. There's three things that matter in politics, three issues -- jobs, jobs, and jobs. So we have do get the economy moving.

HANNITY: Peace and prosperity drive elections?

KASICH: And I told Paul Ryan. I said Paul used to be an aide on the budget committee when I was chairman. I said, Paul, in the first 100 days I will have so much in front of you it will make your head spin. And he just chuckles. He knows it's true.

HANNITY: How are going to keep us safer? ISIS? The mullahs in Iran spinning centrifuges?

KASICH: You have to destroy ISIS. I was the first one. All these other people, we better do it. Air, ground, coalition just we had in the first Gulf War where we had the Arabs and we had the west and we went and drove Saddam out of Kuwait.

HANNITY: We now politicize wars, and then we pull out after we win.

KASICH: No. You just go take care of it, and then when it settles down you let the regional powers figure out ISIS. Russia, you want to talk about Russia?

HANNITY: You're in Iowa now. You haven't spent as much time here, but you've been spending a lot of time in New Hampshire and it's paying off in the polls. I saw a couple with you in double digits now. Some polls have you in second place.

KASICH: Yes. No, I think six of the last seven I've been in second. And by the way, I've been endorsed by seven out of eight newspapers in New Hampshire. Amazing.

HANNITY: I hope they're not liberal newspapers.

KASICH: How many liberal newspapers do you think there are in New Hampshire? Anyway --

HANNITY: I've seen a lot of liberal newspapers around the country.

KASICH: Yes. But, Sean, look, this is a big state. You have to actually fly from city to city. It's hard to do. I got in a race in July. But in New Hampshire, it is 1.3 million. People are condensed. They live where you can get around. And, you know, that's why we spent so much time there.  That's my breakout opportunity.

HANNITY: If you break out in New Hampshire, you think you can go all the way?

KASICH: I do because, you know, we are organized in South Carolina. We're organized in Nevada. We're organized in the south.

HANNITY: If you don't break out?

KASICH: Yes. If I don't break out? I probably will cry for little while.

(LAUGHTER)

KASICH: But I think --

HANNITY: That's the best answer I've ever gotten.

KASICH: Sean, we also have the -- Gordon Humphrey, he said you have the best ground game in 40 years. We are going to do well in New Hampshire.  I've been telling you for a long time.

HANNITY: You have been.

KASICH: And just watch.

HANNITY: And you've got somebody very close to me to agree with you.

KASICH: All right, thank you. Thank you.

HANNITY: Thank you, governor.

And coming up, New Jersey Governor Chris Christie will join us on set.  And later we are less than 24 hours away from the Fox News Republican debate. Kirsten Powers, Rich Lowry, they're here with reaction as "Hannity" continues live from Des Moines.

(COMMERCIAL BREAK)

HANNITY: And welcome back to "Hannity." So we're just five days away from the Iowa caucuses and less than 24 hours away from the Republican debate right here on the Fox News Channel. Here on the set in Des Moines, 2016 Republican presidential candidate, he's the New Jersey Governor Chris Christie. By the way, I'm glad that you were able to pave your roads in New Jersey compared to New York.

GOV. CHRIS CHRISTIE, R-N.J., PRESIDENTIAL CANDIDATE: Yes. We cleaned all our roads.

HANNITY: D.C. still has streets that haven't been --

CHRISTIE: And we offered, I offered to send our New Jersey equipment over to help de Blasio since he can't get seem to get the roads cleared in Queens. We'll be happy to help.

HANNITY: You like Kasich have spent more time in New Hampshire. Fair?

CHRISTIE: Fair.

HANNITY: OK.

CHRISTIE: Yes.

HANNITY: Why New Hampshire? Why not as much time here?

CHRISTIE: Listen, I think for me in New Hampshire I had an infrastructure that had been built over time. I had been up there in campaigns for a number of their gubernatorial candidate over time as our G-8 chairman. And I had a group of folks that were supporters up there. This got built in Iowa later. I have a group of real good supporters connected to the Governor Branstad really just this past September. So since September we spent a lot of time here in Iowa. In the early part of the campaign we spent more time in New Hampshire.

HANNITY: All right, what's happening tonight is pretty fascinating. You know the news about your friend Mr. Trump. And now a super PAC is offering, a supporter of Ted Cruz, $1.5 million if between now and Sunday Trump will debate Cruz one on one. And this just crossed the wires. Carly Fiorina said if he will debate her, $2 million. All this money, by the way, is going to go to military charities.

CHRISTIE: Yes.  

HANNITY: What are your thoughts on the whole thing?

CHRISTIE: Listen, I think it's a big mistake by Donald, and I said that.  Things don't always go your way. You remember. I got sent down to the undercard debate by Fox Business News. I didn't think it was fair. But I didn't whine and moan and complain and walk away. I went to the debate. I argued my points. That's what a leader does. You go and you fight through adversity.

HANNITY: What do you think this shows them? What are you saying it shows about him?

CHRISTIE: I think it shows that when he gets criticized, he can't take it.  And I think that's a shame. I don't think as president you are going to be able to deal with it that way. There's no other conclusion to come to.  Why else would he do this? Why is he picking on Megyn Kelly? Why is he picking on Fox News? I don't understand that. It makes no sense. This guy has got more coverage on this network by a multiple of five or six than any of the rest of us, and he says he is treated unfairly? That's a really thin skin, Sean.

HANNITY: He has been treated fairly on this show. I know Bill has treated him fairly. Greta has treated him fairly. "Fox & Friends" have treated him fairly, and Bret Baier has treated him fairly.

CHRISTIE: Please. And he phones into every darn show. None of the rest of us do that. He sits in the jammies in Trump tower and phones in.

(LAUGHTER)

HANNITY: You're picking a fight with Trump here.

CHRISTIE: I'm not.

HANNITY: He's going to offer $1 million to debate you.

CHRISTIE: I'll debate him for nothing. But the fact is I'm not picking on him. It's the truth.

HANNITY: Are you saying you don't think he has the temperament to be president?

CHRISTIE: What I'm saying is that voters are going to look at this now and they're going to wonder.

HANNITY: You think this is a game changer? Because you've got to admit, he has defied all conventional political gravity.

CHRISTIE: Yes.

HANNITY: He just does.

CHRISTIE: Yes. But what I've told everybody is when the lights are on and they get bright, you either shine or your melt. In this business, the lights get really bright right near when people are going to vote.

HANNITY: Let's talk about your path to the presidency in your mind.

CHRISTIE: Yes.

HANNITY: You want to do well in Iowa. You spent more time in New Hampshire. How well do you have to do in these two states?

CHRISTIE: Listen, what I think I have to do is be the best governor.  That's what I want to be in these two races.

HANNITY: By the way, people were surprised that you went back to New Jersey. I followed your whole career because you're picked up in the New York tabloids and you've always gone back.

CHRISTIE: It was not a hard call.

HANNITY: I was mad at you when you went with Obama. I was furious.

CHRISTIE: When you hear that you are going to get a foot-and-a-half to two-and-a-half feet snow, you're the governor, you go home. You do your job. And by the way, Sunday morning, all the roads were cleared. New Jersey transit up and running by noon. Believe me, they want to hire me in New York City. I'm happy to come and help.

HANNITY: By the way, Comrade de Blasio can probably use your help.

CHRISTIE: He can use my help. I'm happy to consult with him at any time.

HANNITY: How can you get us to a balanced budget? How can we get these people that are in poverty, in food stamps out of work back to work? How do we get that done?

CHRISTIE: Two things. First of all, you've got to reinforce the work requirement which this president has not done. He's waved it all over the place. Secondly what you need to do is go and fix entitlements, Sean. And 71 cents of every dollar in the federal budget is for entitlement and debt service.

HANNITY: We can't sustain this.

CHRISTIE: We cannot. And I'm the only person in this race, you know this, who had put forward a detailed --

HANNITY: You want to steal my Social Security that I paid into?

CHRISTIE: I don't want to steal your Social Security. You know what, Sean, you don't need the Social Security and everybody out there, everybody in that camera knows that that's true. You don't need it.

HANNITY: I paid it in my life.

CHRISTIE: Guess what, the government stole it from you. So what do you want me to do, get it off the magic money tree in the backyard?

HANNITY: Do you have a magic money tree?

CHRISTIE: My mother told me that. We never had one. I kept looking for it the whole time, the magic money tree.

(LAUGHTER)

CHRISTIE: You know what, how about the other night in the debate? They asked Senator Rubio what was his entitlement reform plan? He gave an answer on tax reform. Then they asked Cruz, he gave another answer on tax reform. They won't answer. This is hard.

HANNITY: You're saying means testing, raise the eligibility age.

CHRISTIE: Yes.

HANNITY: And if we don't face the truth, then we're going to go broke.  That's what you're saying.

CHRISTIE: I'm saying --

HANNITY: You feel like the only adult in the room that's taking it on.

CHRISTIE: I'm the only one who has taken it on. Go on anybody's website and see if they have an entitlement reform plan, any, let alone mine that's --

HANNITY: I have to sacrifice the money I paid in for 40 years, that is part of the deal?

CHRISTIE: Yes. The government screwed you. Sorry. I hate to be the bearer of bad news. They lied to you and they stole from you.

HANNITY: They lied to me and they stole from me and you're just telling me that it happened?

CHRISTIE: I'm the bearer of bad news, but you know what --

HANNITY: So I can vote for you.

CHRISTIE: That's right, because I'm the adult who can fix the problem, buddy.

(LAUGHTER)

CHRISTIE: I'm the adult who can fix the problem.

HANNITY: All right, Governor, good to see you.

CHRISTIE: Nice to see you, Sean. Thanks for having me today.

HANNITY: Good luck on Monday.

CHRISTIE: Thank you.

And coming up, less than 24 hours way from the Republican debate here in Iowa, Kirsten Powers, Rich Lowry are on the set with us next as we continue from Des Moines.

(COMMERCIAL BREAK)

HANNITY: Welcome back to "Hannity." We're less than 24 hours until the Republican debate here in Iowa. Joining us now, Fox News contributors Kirsten Powers, Rich Lowry. All right, I guess we have got the battle of millions going on here. A Ted Cruz super PAC, $1.5 million if Trump will debate Cruz one on one.

KIRSTEN POWERS, FOX NEWS CONTRIBUTOR: Right.

HANNITY: Then we've got Carly Fiorina apparently just tweeted out something. So what do you think of the whole thing? And who are the winners and losers in this?

POWERS: I think in terms of the debate, Trump missing the Fox debate seems like a mistake. Now, of course I now think I have to say the opposite of whatever I think with Trump because usually he defies conventional wisdom.  But it seems like there probably are undecided voters out there. He is doing a lot better in the debate, and he probably could have won over some people. And I think sort of anecdotally we've been talking to people out here in Iowa who said I was supporting Trump and this is too much. You've got to show up to the debate.  

HANNITY: What is the real reason? And look, in all honesty he was the one that started saying he's going to pull out. He put FOX in a position to say these are our anchors.

POWERS: Right.

HANNITY: I don't think networks are going to start changing who moderators are.

RICH LOWRY, FOX NEWS CONTRIBUTOR: There seemed like a couple rational reasons to do it. One is he thinks he's ahead and he wants to freeze the race in place. But I think if you want to freeze the race, you show up at the debate, keep your head down, and come out OK, which he's done in prior debates. Or he just fears Ted Cruz. He knows Ted Cruz is loaded for bear.

But I actually think it is genuinely Donald Trump being petty and vindictive and un-presidential. And I think that is the big risk. If he actually does not show up on that debate stage it's going to be the biggest event of this week. And I don't think it's necessarily going to play well in Iowa.

HANNITY: Ted Cruz is hammering him. I don't think it's Megyn Kelly. I think it's ted Cruz. National debate champion, and in the last debate Ted started really turning on Trump. Is it that he doesn't want that exchange?

POWERS: I mean, he may not want that, but I tend to feel like his ego is too big to process what you just said, the idea that there is somebody that would beat him. And I don't say that to be disparaging.

HANNITY: He sees the polls. He knows that Ted is close in Iowa.

POWERS: But I'm saying I'm not sure that he really believes Ted Cruz could outdebate him. And I do think he has demonstrated towards Megyn a very bizarre hostility that doesn't match up with her actions.

HANNITY: It's six months later.

POWERS: It's really obsessive. And so I think that there's something there that's very strange.

LOWRY: So far every single spectacle has worked for him, so maybe this one will work as well. But this close to Iowa trying to select next president, do you want this psychodrama in the White House? I think that is the big potential downside for him.

HANNITY: But, Rich, every time, every pundit, every professional has predicted his demise, he does better.

LOWRY: He can show up at the debate and shoot someone and his polls would go up.

(LAUGHTER)

HANNITY: That I think is probably my favorite line. And, by the way, I have a sense of humor and I knew what he was saying. And I think some people take a lot of his words out of context. What does this say if he does win the presidency? Four very entertaining years, or can he solve America's problems?

POWERS: What I think it says is that people are really, really angry and fed up with what's happening. And I think it's true if he wins the primary whether he wins the election. He is legitimately, I give him much more credit today than I gave him when he started, and I think that he has tapped into something that is very real.

HANNITY: Republicans in Washington created him.

POWERS: That is exactly right. I said that to somebody yesterday.

HANNITY: Do you agree with that?

LOWRY: I don't think Republicans should nominate him, but they should learn from him. They need to take immigration more seriously, both illegal and legal.

HANNITY: They have squandered their chance. And this is what created him and Ted Cruz. That's why it's the year of the insurgent.

POWERS: But the other thing is, though, I think the Washington establishment created him and Bernie Sanders.

HANNITY: I've got to roll. This is actually live and if I'm late --

(LAUGHTER)

HANNITY: All right, good to see you both. That's all the time we have left this evening. As always, thank you for being with us. Don't forget, tune in tomorrow night at 12:00 a.m. eastern after the debate is over.  That's 12:00 a.m. right after the debate. We'll have reaction from the candidates and more. Have a great night. Thanks for being with us from Iowa.

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