This is a rush transcript from "Hannity," March 7, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: And more bad news for Americans. With summer just around the corner, oil prices spiked to almost $107 a barrel. Now, that's up 26 percent from just three weeks ago. And once again, this administration is standing on the sidelines. When asked whether the president would tap into our strategic oil reserves, White House Chief of Staff Bill Daley couldn't give a straight answer.


BILL DALEY, WHITE HOUSE CHIEF OF STAFF: The issue of the reserves is one we are considering. It is something that only is done and has been done on very rare occasions. There's a bunch of factors that have to be looked at and it's just not the price.


So as the White House considers its options, get ready to empty your wallet at the gas pump. And that's not the only frightening economic news facing the nation. Treasury Secretary tax-cheat Tim Geithner delivered this sobering message to Congress.


TIM GEITHNER, TREASURY SECRETARY: The housing market of the United States is still in a very difficult state. The damage caused by this crisis is still deep and very broad. Even with the economy growing again, it is going to take a long time for us to repair the damage caused by the crisis.


HANNITY: And even The New York Times is offering up evidence that the president's policies are failing, noting that businesses all across the state of New Hampshire are hurting because quote, "at many workplaces here, the rising cost of health care is prompting insurance companies and premiums to skyrocket while coverage is shrinking."

So from oil prices to the housing market to the costs, the health care, not to mention the budget battles taking place all across the country, the question we must ask is, can you afford four more years?

And joining me now with the answer is the author of the brand new best-selling book "Revolt," former Clinton Advisor Dick Morris is back. Dick, welcome back.

DICK MORRIS, AUTHOR, "REVOLT": Well, the subtitle of the book suggests my answer. It is how to defeat Barack Obama and repeal his socialist programs. I've give you one great example, that Geithner quote about the housing industries and the swamps. Why is the president of the United States trying to repeal the home mortgage deduction? Nothing could kill the housing industry more than to adopt his program to repeal that deduction.


MORRIS: And when you talk about gas prices, why is he trying to tax carbon emissions which will disincentivize the use of oil at the same time that he wants to incentivize drilling for oil or should want to. The whole point about this Sean, is that the economists said that the recession ended in June of '09, and that seems stupid, because things are still bad. But they are right, this is the new normal. This is the way things are going to be for the rest of our lives if we don't get rid of Obama.

HANNITY: You know, maybe, it's what, do you remember when -- it was Senator Daniel Patrick Moynihan who said, "defining deviancy down," and he was talking about the culture. But in one sense, I think we've now reached the point where we finally, when we stop counting people that are unemployed, because they stop looking for work, so, the unemployment number goes down but those people are still out there unemployed. You know, it's sort of like, you know, with these new manufactured numbers, you know, our expectations have been so greatly reduced I guess at this point. Oh, it is below nine percent, but we are not counting five million people.

MORRIS: Yes. Well, I write in "Revolt" that there are two signature accomplishments in this administration. The first is they have reduced the unemployment rate by successfully persuading five million people just give up and stop looking for work. And secondly, they've slashed illegal immigration by eliminating the jobs in the United States, so they are not coming in the same numbers.

HANNITY: Yes. Well -- New York Times -- now, here's the difference, Republicans want $60 billion in cuts which by the way is 1.6 percent of overall spending, 4.7 percent of discretionary spending. Now, on top of it -- this is a $3.7 trillion budget, this is really just a drop in the bucket.

You know, after the Obama administration increased nondiscretionary spending, we are literally talking about they raised to 25 percent, if you add the stimulus, they raised it 85 percent. You are talking about a miniscule amount. And all Democrats could offer this weekend at a maximum, is that all they think they can find is $10 billion. So, isn't this the showdown for 2012, it's those that want big government, those that want to balance the budget, it's going to be a head to head battle?

MORRIS: It is. And the Republicans have to either shutdown or shut up. Because at some point, the Democrats are going to stop agreeing to cuts and then the Republicans will still have a long way to go toward their 61 billion of prorated deductions.

And in "Revolt," I have a very specific proposal and I hope that people understand that we didn't get to discuss this last week. In the negotiations, the Republicans are saying I'm going to cut all kinds of programs, hundreds and hundreds of cuts. And the result is, you really can't describe what they are because they are so many of them. What I propose is if the shutdown comes, the Republicans say, there are three specific programs we're going to eliminate, and that's where all of our cuts will come from.

One, a moratorium on highway construction, new highway construction. Not repair and maintenance but new construction. That saves 30 billion. Two, we can stop the Obama program where he pays the debt service on state and local construction bonds. That's 11 billion. And three, we're going to stop his infrastructure building program, that's five, which is pork barrel, that's five billion.

And then you throw in eliminating the subsidy to PBS, the endowment for the humanities and cutting Congress back to its '08 levels in spending and you are there. And I believe that way the Republicans go to the country and say we're not shutting down the government. We are shutting down three unnecessary programs, zero funding them. And if the Democrats still cling to those programs that they want to shutdown the government --

HANNITY: Let them do it.

MORRIS: Well, then the onus is on them.

HANNITY: I think that's a good idea then there can't be the political backslash.

Let me see if I can give some perspective. Maybe I'm wrong, but I think Americans are getting lost in millions, billions and trillions, 3.7 trillion is a lot. In three years, Obama accumulating nearly five trillion in debt is a lot of money. At the end of fiscal year 2007, not that long ago, right? Our budget deficit was 161 billion for the year. For the month of February, this past month, the budget for the deficit for the month was month 223 billion. Not quite twice, but almost twice what it was for the entire year in 2007. It seems to me that Americans now want and those conservative governors are being rewarded for, fiscal responsibility. So, why wouldn't the next presidential candidate for the Republicans get the same benefit?

MORRIS: Oh, they absolutely need to. And the Republicans need to stand firm in this current fight. By the way, I have an idea I'd like to float out there, it's also in "Revolt" about the gas situation, the gas price.


MORRIS: I think that Congress should suspend the collection of the gas tax. And if the gas tax -- reduce it -- and if the gas price goes above $5, suspend it entirely. And then if it drops down below four again, re- impose the gas tax. Releasing oil from the Strategic Petroleum Reserve undermines our National Security. It's why they call it the Strategic Petroleum Reserve. But cutting the money for the gas tax stimulates the economy, reduces the impact of this on the average American and all it does is shrink government.

HANNITY: Yes. All right. Dick Morris, congrats on the book. And thanks as always for your insight.

MORRIS: Thank you.

HANNITY: We appreciate it.

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