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This is a RUSH transcript from "The O'Reilly Factor," January 20, 2015. This copy may not be in its final form and may be updated.
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O'REILLY: "Impact Segment" tonight, President Obama's State of the Union coming up shortly. A new poll by Pew Research Center says defending the country from terrorism, strengthening the economy a And improving the educational system are the top three things Americans want done.

Joining us from Washington Senator Marco Rubio, author of the new book, "American Dreams: restoring economic opportunity for everyone". Wow -- that's some title, Senator. If you can defeat the jihad and restore a vibrant economy, you will be president. What say you?

SEN. MARCO RUBIO (R), FLORIDA: Well, first of all, I agree. You can't be prosperous unless you are safe. One of the problems I have with this administration and a lot of people that are involved in this effort is they think that radical jihadists are just not happy because we did something. This is their way to force us out of the Middle East or seek revenge.

They don't understand that the nature of radical jihad is they want the whole world to be under the flag of radical Islam. And they view our government, they view the world order as illegitimate. They view that the only legitimate source of authority in the world is radical Islam -- their version of radical Islam. And they are prepared to extend it. They are prepared to defend it by using very violent methods. That's what we are at war against here.

O'REILLY: Ok. But the President clearly does not want to make this World War III as it has been referred to here. Clearly does not want to throw down the gauntlet against the quote, unquote "Muslim jihad". He simply doesn't want to do it. He's much more interested in social justice, reforming in his view the economic system here, income redistribution.

So I don't see him changing that in the next two years, do you?

RUBIO: Well, I hope he will because if you don't understand the true nature of what you are fighting against you can't effectively fight against it. And look, this is as much a battle within Islam as it is from Islam. I mean within Islam, those who are out there saying that they are moderate Islamists or moderate believers in Islam who do not believe in violence, they, of course, have to step forward. They are fighting for the future of their own faith.

O'REILLY: But they haven't in 14 years.

RUBIO: And that's a problem.

O'REILLY: And they won't.

RUBIO: But beyond it I would say we have an obligation to defend our people by understanding the true nature of what we are up against. It's the same problem with Iran. Iran doesn't view itself -- the Iranian leadership does not view itself as a country. They view themselves as a cause. If you read the Iranian constitution, it makes very clear that the Supreme Leader doesn't consider himself to be the leader of Iran. He considers himself to be the leader of the world and of all Muslims in the world. And they believe that they have a mission, an obligation to make everyone either a believer inherent to radical Islam or they have to die.

O'REILLY: You know, the Shia --

RUBIO: And this is a very serious threat.

O'REILLY: He's a Shia leader. He would wipe out the Sunnis -- the mullahs in Iran. You are absolutely right that it is, but I don't think there is any way on earth that the United States can compel these nations, these Muslim nations, to help us and to police their own without economic pressure. I mean, you have to cut this stuff off to Pakistan.

I mean how outrageous is it that the doctor who led us to bin Laden is still in prison and we are sending a billion dollars over to that country. I mean come on.

RUBIO: It is outrageous. It is outrageous that he is still in prison. By the way the difference between Shia and Sunni -- I mean they both have violent adherence. Shia actually wants there to be an apocalyptic showdown because they believe that that will then usher in the appearance of the hidden -- the 13th imam, the modi (ph). I mean you listen to their speeches, they're very clear about that. And that's Iranian risk.

But radical Islam's goal is everyone has to be a Muslim one day -- that is their stated goal. They are willing to kill people to make that happen. And we need to understand that.

O'REILLY: And if Muslim nations don't rise up and fight it I don't think we can defeat it because we can't kill them all.

All right. Let's get to the economy. You say that you want -- you know, but this is what everybody says. President Obama wants to tax the rich even more. He's going to say that tonight? It's not going to get through, it's a symbolic gesture. How would you stimulate the economy?

RUBIO: Well first we have to understand what's happening now is that people read on the news about how the economy is doing better but they are not feeling it. They are stuck between low wages and high prices and they are frustrated and the American dream is slipping out of reach for them.

There's three things we have to do. It begins by understanding that what we have here is not a cyclical downturn. It is a rapid restructuring of the essence of the economy. And then number one, we've got to win the global competition for investment and innovation. Make America a better place to create those jobs.

We have to give people 21st century skills so they can fill those higher paying jobs and we have to help people with a higher cost of living, a pro family tax code. Repeal and replace Obamacare with something that's cheaper and provides better care and better quality and help people with the burdens of student loans, thousands of students now have thousands of dollars in student loans.

O'REILLY: Would you forgive those loans?

RUBIO: No, it's not about forgiving them.

O'REILLY: And give them free tuition to community colleges.

RUBIO: I want everybody to get a higher education -- it doesn't have to be a community college. Getting a degree is no longer enough. You have to have the right degree. I think we should -- some people should be in vocational training so they can graduate high school ready to go to work.

O'REILLY: I know but does the government just give them that education? I have got 30 seconds. Do you give it to them?

RUBIO: We do now is my point. The reason why most people do not access community colleges is not the price. It's because they don't see where an AA degree leads them to anything that's going to lead to a job. We need to provide degrees that are meaningful, that help people with the skills they need and are relevant for a job in today's economy.

O'REILLY: All right, Senator. We appreciate you coming on tonight. Thank you.

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