Countdown to Government Shutdown: GOP Budget Puts Spending Crisis in Perspective

This is a rush transcript from "Hannity," April 5, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: As we were just discussing with Congressman Paul Ryan, time is running out for any last minute deal to avert a government shutdown. And after today's meeting, President Obama and Speaker Boehner, well, they didn't seem like either side is ready to give in.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Right now, there is no reason why we should not get this done. Nobody gets 100 percent of what they want. And we have more than met the Republicans halfway at this point.

SPEAKER OF THE HOUSE REP. JOHN BOEHNER, R-OHIO: Now, we are not going to allow the Senate, nor the White House to put us in a box where we have to make a choice between two bad options. You've heard me say for the last three months that we have no interest in the government shutting down. But we are interested in cutting spending here in Washington, D.C.

(END VIDEO CLIP)

HANNITY: And joining me now with reaction from the Fox Business Network, the host of "Varney & Company," Stuart Varney and former White House Press Secretary, Fox News contributor Dana Perino.

What were you saying about Mr. Varney's tie?

DANA PERINO, FOX NEWS CONTRIBUTOR: Nothing. It's lovely.

HANNITY: That's not what you were saying.

PERINO: It has an interesting emblem on it.

HANNITY: All right. It looks like -- did you ever work for the al-Jazeera Network?

STUART VARNEY, HOST, VARNEY & COMPANY: What? Is this a new show called ambush?

PERINO: Ambush, exactly. I had to take you down somehow tonight.

HANNITY: You called her establishment once, so I think this is fed that she finally got you back.

VARNEY: Let's see now, establishment, al-Jazeera, which would I choose?

HANNITY: That's a good point. All right. So, we are headed for a government shutdown or are we? And I personally think, first of all, we'll get to Paul Ryan's budget. I love the budget, $6.2 trillion is serious cuts. These are serious times. But the $61 billion matters to me.

PERINO: That's why I actually think the timing of Congressman Ryan's budget coming out was brilliant. It was -- I think that they were even going to kick it to next week. And I think they were smart to bring it forward. Because it put into perspective what we are really talking about.

HANNITY: It's a great point.

PERINO: This next six months, $33 billion, $30 to $60 billion whatever it might be is just so small. And it put it all into perspective for us.

HANNITY: Yes. And if the Democrats are rooting for a shutdown over $61 billion, if the Republicans don't whole the line on that Stuart, I don't think, how are they going to stand firm on $6.2 trillion?

VARNEY: Really? You are right. I mean, look, I think this government shutdown issue the $61 billion worth of cuts or not, completely overshadowed by the Ryan plan, which is talking trillions in cuts. And really getting our country back on track. I think one overshadows the other. But what stands out to me is this orgy of demagoguery that we are now engaging in by the Democrats. Whether it's the $61 billion with the cuts, or the Ryan plan. This thing is being demagogued to death.

HANNITY: Already. And it's just, already.

VARNEY: Nancy Pelosi has marched right out there and saying, you are starving seniors. Because of a five percent cut in a program which delivers meals to seniors at home. A five percent cut, she says, you are starving seniors.

HANNITY: That is nothing. This is the cat food, dog food, want you to die, is all coming.

VARNEY: Where is the leadership here? Who got us into this mess? It was the Democrats, it was the Obama administration. Now, where is the leadership to get us out? It is Paul Ryan, it is not the president.

PERINO: The reason that we are having a discussion about a possible budget shutdown is because, when the Democrats actually ran the House and the Senate and had the White House, they didn't pass a budget. So, now all of a sudden it is Congressman Boehner's fault?

But let's go back for a moment, Speaker Pelosi in 2010 right after they took their thumping in the election, she said, we will not allow these spending cuts that they're going to propose, because it will hurt the economy. Now, they are about to take credit for getting to a $35 billion cut in this year's budget. I mean, I think by any measure the Republicans have stayed unified and kept the pressure on them, and they're going to get these cuts.

HANNITY: I think there's been this undercurrent of fear by the Republicans about the shutdown. I think, and that's why they have got to be willing to let the Democrats shut it down. Because otherwise they are going to be held hostage as we debate real cuts, $6.2 trillion.

VARNEY: Don't you think that the Ryan plan has shifted the argument?

HANNITY: Yes. Dana's point was dead on.

VARNEY: Because it is talking about trillions of dollars, because it is the only plan around. And it is dealing with the big comprehensive picture. It is overshadowed any concept of a government shutdown or $61 billion worth of cuts, that is all politics. Ryan is talking real money, the country's financial future. It is a frankly brilliant plan.

HANNITY: Yes.

PERINO: But the Democrats are sort of in a time warp. But they are still back behind before the election in 2010, and they're thinking -- that's why they're using it. They are playing the same old cards over and over again.

I do think that President Obama, if he really believed that the Democrats were going to take the blame for a shutdown -- I'm sorry that the Republicans would take the blame for the shutdown -- he would not have come out to the briefing today and tried to answer questions. And he told Reid and Boehner to grow up. I mean, it is so petulant. And what you can do at the White House as president is he could have, in that room today said, let's make a deal and make it look like everyone won something.

HANNITY: But there's a bigger picture here. The president, you know, he said when he was running for office that he was going to cut the deficit in half, these are the largest deficits we've ever had. Nancy Pelosi five trillion in debt, Obama is not far behind her. So, the reality is he punted and now they are going to try and pick apart, use class warfare, demagoguery, hyperbole to demonize Republicans. Will it work?

VARNEY: No, it won't work. Because I really feel that the Ryan plan shifts the political debate. This thing about the government shutdown $61 billion, that's like inside baseball, it's miniscule. It's inside baseball. Ryan has shifted the whole debate.

HANNITY: You agree with me that money matters. Because if they give into the threat of being blamed for a shutdown.

VARNEY: In the short term, a little bit of push and pull, a little bit of political game play, OK, it matters. But Ryan has shifted the debate.

HANNITY: Why do I say, if the Democrats want to shut it down because they can't cut $61 billion of a $3.7 trillion budget, I say, let them go make that case to the --

PERINO: But I think Boehner, even if they agree ultimately to somewhere between $30 and $40 billion in cuts, Boehner has won. Because where they started was, we are not going to do any cuts at all. Then the Senate Democrats suffered $4 billion, then the White House offered $6 billion, we are now talking $35 billion and it's less than a rounding error.

HANNITY: He should hold out for every penny.

PERINO: He's not going to get to every penny.

HANNITY: Why not?

PERINO: They won't get there.

HANNITY: Then shut the government down.

PERINO: Remember, they only control the House.

HANNITY: This is not 1995. I think they could withhold funding from a very obscure area of the budget and --

PERINO: I think the best way to do it is not allow back pay for any government staffers, including those who work for the members of the House and Senate on the Republican and Democrat side and I guarantee you this will be solved by tomorrow.

VARNEY: Demagoguery won't work, the Democrats are exposed.

PERINO: I also think we could probably --

VARNEY: They haven't got a plan. We are facing a crisis. They have no plan, demagoguery won't work. The political argument has shifted.

HANNITY: This plan is the debate for 2012.

VARNEY: Exactly.

HANNITY: This is it. Guys, good to see you. By the way, I guess --

PERINO: I do think that -- I would say that, I think you could only say "orgy" on television with a British accent.

VARNEY: With an al-Jazeera tie, what?

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

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