Hannity and Phil Donahue Square Off

This is a rush transcript from "Hannity," March 18, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: And you can feel the tide starting to turn against TurboTax Tim Geithner, as the anger is growing about the AIG bonuses and the number of unanswered questions are growing as well. And that is our headline this Wednesday night, day number 58 of false hope, loose change, "What Did They Know and When?"

It's what everyone from Capitol Hill to Wall Street to Main Street were asking today. What did the administration know about the AIG bonuses and when did they know it? And if they're going to, you know, be taken at their word that they only learned about this last week. Then why did it take so long for them to find out?

At a White House briefing just two weeks ago press secretary Robert Gibbs told Jake Tapper of ABC News that the administration could account for all of the bailout money given to AIG, but now we find out they may not have been true whether or not Gibbs knew it or not.

And there is Mr. Geithner, members of Congress began calling for his head today as more people asked why didn't the man who drew up the original bailout plan for AIG know anything about these bonuses.

Now it's frightening that the very same people who want to manage the largest government expansion in this nation's history are already having such problems keeping track of your money. So what does this mean for where the country is headed?

We're going to have much more later in the show with our very own Karl Rove, but it's such a pleasure, joining us back in studio, former television icon, host of — by the way, an executive producer of the award-winning documentary, "Body of War," Phil Donahue.

• Video: Watch part 1 I Part 2

We will continue. How are you?

PHIL DONAHUE, FORMER TV HOST, EXEC. PRODUCER "BODY OF WAR": And we'll be back.

HANNITY: And we'll be back in just a moment.

DONAHUE: How are you doing.

HANNITY: All right. I — first of all, I want to talk about your piece there in a minute. I spoke to you briefly yesterday, and I was a little surprised. I'll tell you why. Here we have the biggest expansion in government history, $634 billion that we're going to lay down as a down payment for nationalized health care.

You're not happy with the direction of America. Why?

DONAHUE: Because we're spending a trillion dollars a year on things that go boom. America has become a warrior nation. We have military bases in — I'm almost finished.

HANNITY: I didn't even start to interrupt you.

DONAHUE: In over 150 countries. We are dropping bombs on crowded cities at night where old people and children are sleeping. We now have a guy in a control room in Arizona with a joystick that controls an unmanned aerial vehicle over Pakistan, can see what's happening on television with a camera that sends a signal halfway around the world, and firing an incendiary device into what we believe are insurgents, rebels, Taliban, whatever it may be.

HANNITY: Right. Before...

DONAHUE: By the way, the London Times quotes a bystander as saying that the other couple of weeks ago we killed three children. We can't — we shot down a private airplane, Sean, along the Peruvian border that was occupied by Christian missionaries from Michigan.

HANNITY: But...

DONAHUE: A young woman by the name Valerie — Veronica Bauers (ph), and her 7-month-old daughter Charity were killed. We did this. We knocked a ski lift off the cable.

HANNITY: All right.

DONAHUE: We are adventurists, and we are killing people around the world, and it is jeopardizing the well-being of our children.

HANNITY: I'm giving you due deference. I'm going to address all of this. I don't like your comment about saying that we're just bombing indiscriminately — women and children. But before I get there, and I promise you we'll spend time on this. Do you not like your new president? Because I can go back — I looked at your interview with Milton Friedman from years ago.

DONAHUE: You saw.

HANNITY: I did see it.

DONAHUE: Yes.

HANNITY: And...

DONAHUE: Greed is good, he said.

HANNITY: Greed is good. And you still didn't answer his question, and I'll give you a chance tonight, but are you saying you don't like Barack Obama? Are you unhappy with him? This — you want bigger government. You...

DONAHUE: No. I cried when the hand went up and he took the oath, honestly. I did.

HANNITY: You really cried, literally.

DONAHUE: Oh I did. Yes. I think this was a moment. And what a gorgeous family. I mean I can't take my eyes off these children. His smile may save us all. I mean the guy is a very compelling political figure.

I wish he hadn't invited Rick Warren to call Jesus down for his blessing on the inauguration.

HANNITY: Oh, boy, that's a horrible — he crossed the line there.

DONAHUE: I mean he — he likened gay people to pedophiles. I mean this is not — this is what promotes homophobia, and so I was disappointed as were a lot of people, but I want him to succeed, and the guy hasn't even had a chance to hang up his coat, and you're all over him. You're all over him.

By the way, can you think of any more problems that we want to put in his lap? And I also think that Afghanistan could do to Barack Obama what Vietnam did to Lyndon Johnson. This is awful. We have 170,000 troops in Afghanistan and Iraq and Pakistan.

HANNITY: Let me now get into some issues with you because I think I've given you a pretty fair opening shot.

DONAHUE: You did, I thank you.

HANNITY: All right. Iraq was full of torture chambers, Phil. We lost 3,000 Americans. You know I watched your video, and I'm going to get into that. We have North Korea, we have Iran, we have Ahmadinejad.

The former Soviet Union, we have now the current state of Russia which is not good. We have the communist Chinese, we don't have free press there, we can go to Zimbabwe where the life expectancy has now been cut in half. We have Burma, we have the Sudan, we have Europe suffocated by socialism.

And I'm thinking for all your talk about the imperfections of the United States, I'm thinking — I don't understand why you, Phil Donahue, who's benefited as much as anybody, doesn't ever extol the virtues we beat back Nazism, we beat back fascism, totalitarianism.

The 9/11 Commission Report said they were at war with us, Phil, we weren't at war with them. What do you want us to do? Sit here as sitting ducks.

DONAHUE: I'm happy to answer your question. What I want us to do is to obey the United States constitution. I can argue that I'm more of a patriot than you are. I believe in the Bill of Rights.

HANNITY: Do you believe that?

DONAHUE: I believe in the Bill of Rights.

HANNITY: So do I.

DONAHUE: I believe a woman's home is her castle. I don't think you should go rummaging through anybody's e-mail without any proper judicial warrant.

HANNITY: It's a simpflication of what the issue is.

DONAHUE: I also think, I also think you shouldn't put a man in a cage for six years, no phone calls, no Red Cross, no visitation, no nothing. You're fooling with the bedrock of this nation. If we had obeyed the — I also think the United States Congress is the only agency that can declare war.

HANNITY: All right.

DONAHUE: The framers were right. You can — you know, conservatives keep telling liberals that they don't love America. I love it more than they do.

HANNITY: I — well — Phil, Phil...

DONAHUE: You've turned your back on the Bill of Rights and the constitution.

HANNITY: No. No. Wait a minute. I watched your film, and this is the case you make here. I'll pull out in the next segment, you tell me where in the constitution it says the specific words that must be used in a declaration of war because we did have, as your movie points out, we did have Democrats, Republicans, they passed a resolution.

The resolution was the authorization of the use of force in Iraq.

DONAHUE: That is not obeying the constitution.

HANNITY: Wait a minute. Wait a — well, in your view — the constitution — you give me the exact words that it says we must use to declare war. It doesn't exist.

DONAHUE: Article...

HANNITY: It's not in there.

DONAHUE: Article 1, section 8.

HANNITY: Give me the words. Give me the words.

DONAHUE: "Only Congress can declare war."

HANNITY: Wait a minute.

DONAHUE: Wait a minute.

HANNITY: Authorization of the use of force is what?

DONAHUE: Let me quote James Madison. It's too much of a temptation for one man. That's why only Congress can declare war. What this Congress — and by the way, Congress has not done this since the early '40s. They don't want the job because it's a third rail issue.

This Congress for the Iraq war resolution...

HANNITY: We got to break.

DONAHUE: ... said here, Mr. President, if you think you have to, go ahead.

HANNITY: All right.

DONAHUE: Go ahead. Then if he goes ahead and it doesn't work, they're going to say well, I didn't.

HANNITY: Phil...

DONAHUE: And he did.

HANNITY: Parting shot. Answer this one.

DONAHUE: It's a cover your butt maneuver on the part of spineless Congress.

HANNITY: OK, you can blame them. But they did authorize force, and force is war, Phil.

DONAHUE: It wasn't an authorization consistent with the mandate of the constitution.

HANNITY: That's what it said.

DONAHUE: All right. Ask a scholar.

HANNITY: The constitution doesn't mandate any war.

DONAHUE: Yes, it does.

HANNITY: It does not.

DONAHUE: It does not give one man the power to declare war which is what this Congress presumed to give the books.

HANNITY: I will give you $10,000 to pass out copies of your video if you show me the specific words that must be used to declare war.

DONAHUE: So it's your view that any president whenever he thinks we have to...

HANNITY: No.

DONAHUE: You know, you believe all men are created equal unless we're scared.

HANNITY: No, I don't.

(LAUGHTER)

DONAHUE: That only Congress can declare war unless we're frightened.

HANNITY: All right. We got to take a break. More with...

DONAHUE: We could have saved so many babies if we had obeyed the constitution.

HANNITY: Why don't you do it? And we'll be back...

DONAHUE: And we'll be back in just a moment.

HANNITY: And we'll continue with Phil Donahue right after the break.

DONAHUE: Not much time.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HANNITY: And you know what, I think the number one problem in America...

DONAHUE: You didn't hear my question.

HANNITY: I'm answering your question.

DONAHUE: You don't like my question.

HANNITY: I'll answer it my way. The number one problem in America, in my view, is failure to take responsibility.

DONAHUE: Thank you for the speech.

HANNITY: That's my, that's my position.

DONAHUE: Yes. But you haven't answered the question.

HANNITY: And I'm encouraging people to take responsibility for their actions and I think adults who get pregnant – there’s no reason for an adult to get pregnant...

DONAHUE: And I'm encouraging you to take responsibility for my question.

(END VIDEO CLIP)

HANNITY: The debate between myself and the legendary talk show host Phil Donahue started back in 1994, and it continues tonight.

Boy, you look the same.

DONAHUE: You look like you just made your first communion.

(LAUGHTER)

HANNITY: First thing you said I agree with. All right, I want to move on a little bit to — you had a debate with Milton Friedman some years ago, and he challenged you, and he made the assertion, the greatest achievements of mankind were made into capitalism, and you said well, it's based in selfishness. And I look at all the advancement in human kind, and I agree with Milton Friedman.

DONAHUE: Yes, he said greed is the best energy to propel the free market.

HANNITY: Right. Pretty much.

DONAHUE: And that no one's been able to find a better way to do that.

HANNITY: You disagree with him?

DONAHUE: Well, as you know, he's a Nobel Laureate. We shouldn't talk ill of the dead, but what he misses, I think, is that, you know — by the way, what's happened to Adam Smith and the invisible hand here, you know, as the country spirals downward, you can't — you've got to have a certain amount of regulatory restraint on capitalism.

If you don't, you get what we've got. We are in a desperate spiral, as I don't have to tell you, and it's because there are 3,000 lobbyists in Washington who went after Congress on behalf of the financial industry and knocked down all regulations.

Don't take my word for it. Check WallStreetWatch.org, and you'll see one of the best analyses of how we got into this financial mess that's out there.

HANNITY: Well, this is what — we got into the financial mess because it was the government that demanded and forced through regulation starting with Jimmy Carter, double downed with Bill Clinton, that every American should own a home whether they can afford it or not, and see, this is why I don't understand you, Phil Donahue.

You know what, you look at all medical advancement, pharmaceutical advancement. It was the United States of America. It was capitalism. A standard of living that is the envy of the world. The poorest in America — I've been to housing projects. They have things that the third world would crave for.

Capitalism. The pursuit of profit while serving your fellow man.

DONAHUE: Yes, but not unfettered and without regulation, Sean, you can't let the people have a lot of money pay a lot of money to people to go to Congress and say we don't want this, we don't want that, and pretty soon you've got a casino, a casino where only the house wins, and what happened over the last several months is the house has lost now.

HANNITY: Let me take Milton Friedman's position. Tell me a better system. What system would you like to do?

DONAHUE: I'm all for capitalism. I've done pretty well with it, as you may have noticed.

HANNITY: I know you did. Very well.

DONAHUE: But I want it regulated. I don't want to knock out all the speed bumps against the barons who will come in. And for example, I want to go back to the day when the butcher called my mother by her first name, the time when a mom and pop store could survive and wouldn't be killed by the category killers that come in now and blow out all the strip malls, all the local people who make a better muffin baked that day.

HANNITY: Do you want nationalized health care?

DONAHUE: I want to get the insurance business out of health care.

HANNITY: You want to nationalize — it's a different question.

DONAHUE: Wait a minute. I want single payer. The only thing separating us from Canada is an imaginary line. If you're skating on the Ottawa River in the wintertime and you fall down and injure yourself, you're covered.

HANNITY: The Canadians...

DONAHUE: Are there problems with it? Yes.

HANNITY: They prompted the U.S. ....

DONAHUE: You're going to tell me they have longer lines. Listen, nobody's perfect, but we're paying $1,500 a car.

HANNITY: Let me put up...

DONAHUE: That's how much we're paying.

(CROSSTALK)

HANNITY: They have socialized...

DONAHUE: That's how much Detroit has to pay for health care.

HANNITY: Let's put up from the Daily Mail. This is — the National Health Service, they had an article last week. Thousands of patients in Great Britain with terminal cancer were dealt a blow last night after a decision was made to deny them life prolonging drugs. The government's rationing body said two drugs for advanced breast cancer and a rare form of stomach cancer is too expensive.

People from Canada flock to the U.S. why would you want to ruin the best health care system in the world with the greatest advancement of pharmaceuticals and technology?

DONAHUE: My understanding is that people are going to Canada to buy drugs because Canada buys them in bulk. Thereby, reducing the cost to its working class people so they can afford...

HANNITY: We're inventing the drugs, and they're coming here for health care.

DONAHUE: Well, that's — you know, that's a Kennard (ph) — I'm telling you that there's — the only thing preventing us from having a reasonably, modestly costly health care system is ideology. We're afraid of national, national.

HANNITY: All right.

DONAHUE: What, you know, it's killing us.

HANNITY: I want to give you a thought for this.

DONAHUE: Thank you.

HANNITY: Because I watched it — by the way, and the mother of this hero even said negative things about me in the movie.

DONAHUE: Yes. You get it.

HANNITY: I got a negative shot on...

DONAHUE: You were mentioned in the movie.

HANNITY: But these guys are heroes. If you please see this kid, will you tell him he's in my prayers and thank him for me in spite of...

DONAHUE: Thomas Young of Kansas City is watching tonight. This film is available on Netflicks. It's also available on Pearl Jam's Web site. Eddie Vetter wrote the signature song for our film.

HANNITY: There's one thing you forgot in that video, though. And I'm running a little late here. You forgot the video of the dead children in Iraq that were gassed, and I would asked that you add this.

DONAHUE: Yes, they were gassed with gas that we sold Saddam Hussein.

HANNITY: But you...

DONAHUE: Remember, he was our SOB.

HANNITY: All right.

DONAHUE: Remember the picture of Donald Rumsfeld shaking his hand?

HANNITY: But there was another ...

DONAHUE: So you don't tell me that we're this...

HANNITY: There were 17 resolutions, too, sir. All right, I've got to run. This debate will go on forever.

DONAHUE: So I hope you'll come Friday night to Teaneck, New Jersey where MFSO, Military Families Speak Out...

HANNITY: All right.

DONAHUE: We'll show the film, and I'll be doing a Q&A. Thank your for the plug.

HANNITY: All right.

DONAHUE: I'm off.

HANNITY: Thank you, Phil Donahue. God bless him.

Watch "Hannity" weeknights at 9 p.m. ET!

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