This is a rush transcript from "Hannity & Colmes," October 31, 2008. This copy may not be in its final form and may be updated.

SEAN HANNITY, CO-HOST : With John McCain's defeat last night and the GOP losses in Congress, party leaders are looking for a new direction.

Our next guest has been dubbed a rising star in many GOP circles and seen by many as the future face of the Republican Party.

Joining us now Louisiana governor, Bobby Jindal.

Governor, thanks so much for being with us, sir.

BOBBY JINDAL (R), LOUISIANA GOVERNOR: Good evening. Thank you for having me.

Video: Watch Sean and Alan's interview with Louisiana Governor Bobby Jindal

ALAN COLMES, CO-HOST: Do you see the Republican Party as fighting for a face for a direction, or do you not see it that way?

JINDAL: Well, I think the party has got to do at least three things. Number one, we've got to match our actions with our rhetoric. For years, we've talked about being the party of low taxes, cutting spending, we went to Washington to change Washington, we got changed by Washington.

Number two, we've got to stop defending corruption. We got to rightly criticize the other party. And then finally number three, we got to be the party of ideas and solutions.

Now the good news is there's precedence for this. Back in the '90s under President Clinton , it was Republican governors that championed welfare reform, balanced budgets, putting people to work.

I think we need to apply conservative principles to the issues that are important for people today, and that includes the rising cost of health care, the rising cost of energy, so I think there's a path forward for the party.

We just got to -- we've got to be consistent with our principles and stop making excuses for corruption and wasteful spending.

COLMES: Did the party go too moderate? I mean, look, Chris Shays lost in Connecticut. That may be different in New England. I mean that's surprising. But is there going to be a fight between the left and moderate wing of the party?

JINDAL: No, look, I think we win elections by being authentic. If voters want to elect somebody who's going to have liberal positions, they'll elect the candidate that's authentically liberal.

I think that we can be true to our conservative principles, but we have to apply those principles to issues that matter. Let's take health care. There is one approach, a single payer, government run health care system. We don't believe in that but for years we've been silent.

We've tried to beat something with nothing. We've got to show the American people we've got real solutions that involve reforming the marketplace, making health care affordable, whether your child has got asthma, diabetes or if you're health, it should be affordable for all Americans.


JINDAL: We don't need to become liberal to win elections, but we have to offer real solutions.

COLMES: That's what Obama ran on. He's not running on a single-payer system. He's running on a system that would mainly keep your private health care and have alternatives including your government systems so, I mean, what you're talking about is very much in keeping with what the Democrats ran on this year.

JINDAL: Well, I think -- first of all, congratulations to President- elect Obama, he ran an incredible campaign, a great victory last night. And as an American first, not a Republican first, as American first, I certainly wish him well.

We'll support him. When I disagree with him, we'll stand up and speak against those policies I disagree with. I think you're going to see bills in this Democratic-controlled Congress that will try to expand Medicaid, try to expand Medicare, before you know it.

HANNITY: Hey, Governor.

JINDAL: . you're going to have government trying to tell doctors how to practice health care and medicine. We don't need that.

HANNITY: Governor, Sean Hannity, good to see you. And thanks for being with us.

By the way, you did a phenomenal job when the hurricane came. I watched you very closely, and I was glad to see real leadership. I think the state needed it, especially after Katrina.

All right, here -- I put up on my Web site.

JINDAL: Thank you, Sean.

HANNITY: . ten items for victory on Hannity.com. They're actually up on my Web site right now for conservatives. I'm a conservative more than a Republican.


HANNITY: And the first one, they got to be the party of national security. They've got to be the party of fiscal responsibility. No more earmarks. The party energy independence, the party of free market solutions for health care, Social Security, education, Medicare, the party of the American dream, among the many items.

You're right. This poll shows, that I mentioned earlier, 60 percent of respondents think that the Republican Party lost their way and became incompetent.

Is that a big part of yesterday's loss?

JINDAL: Absolutely, Sean. You're exactly right. We were saying one thing, and yet the Republican Party was defending earmarks and spending we never would have tolerated if the Democrats have proposed it.

We've got to be the party of confidence. Look, Katrina was a huge embarrassment, not only for our state, the federal response, not only in the immediate storm, but the recovery afterwards. We can't tolerate that.


JINDAL: The week before the election you've got the most senior Republican senator convicted of federal charges, we can't accept that as well. But I think your list is exactly right.

HANNITY: All right.

JINDAL: We need to be the party that stands for the American dream. It should be easier, not harder for people to work hard and do well.

HANNITY: Governor, there is an emerging reform minded new group of Republicans that I think are leading the party, and I think you're right up there. I think Governor Palin is right up there. I think Tim Pawlenty is up there. Mitt Romney is up there.

You're going to be in Iowa pretty soon. And you're going to give a big speech there. Am I allowed to read anything into that?

JINDAL: Well, they've got great weather in the fall. I want to go visit -- you know, the honest streak is like -- I've been in several states campaign for.


HANNITY: The weather?

JINDAL: Yes, the weather. They've got corn fields. I've never been to Iowa before.

HANNITY: I'm reading into it.

JINDAL: I'm going to do some sightseeing. But, no, the reality is I've been to other states to campaign for other candidates. I've been in Texas and I just.

HANNITY: We got to run, Governor.

JINDAL: I support this group. I look forward to going there.

HANNITY: All right.

JINDAL: Thank you.

HANNITY: We appreciate it. Thanks for being with us.

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