This is a rush transcript from "Hannity," December 16, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The Senate is preparing to vote on the health bill, but liberals are fuming that the public option, the single-payer plan, the Medicare buy-in and the state opt out have all been dropped from the bill.

Now former DNC chair, Howard Dean, among others, is angry at the watered- down bill in consideration and is accusing his party of playing politics. Now here is what he said earlier today on "Good Morning America."


HOWARD DEAN, FMR. DNC CHAIRMAN: We've gotten to this state, George, and you know this better than most, in Washington where passing any bill is a victory. And that's the problem. Decisions are being made about the long-term future of this country for short-term political reasons, and that's never a good sign.

We are now committed to a solution using the private insurance companies and you will be forced to buy insurance. If you don't, you'll pay a fine. And 27 percent of the money that you put in will not go to your health care. It'll go to CEOs who make $20 million a year.

This is a bigger bailout for the insurance industry than AIG. And not one person — excuse me, a very small number of people are going to get any insurance at all until 2014 if the bill works.

This is an insurance company's dream, this bill.


HANNITY: Well, the White House is not taking that sitting down. Propaganda administer Robert Gibbs, he fired back at Dr. Dean later this afternoon. Let's take a look.


ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: If this is an insurance company's dream I think the insurance companies have yet to get the memo. Insurance companies have spent hundreds of millions of dollars lobbying against this legislation. Nobody will be required to purchase something they cannot afford. There are hardship exemptions and subsidies based on income levels that help people afford insurance.

I don't have the slightest idea where the fact of 27 percent came from. So, you know, I don't know what piece of legislation he was reading.


HANNITY: All right, now, meanwhile the president is pushing the bill harder than ever, and he is bombarding Americans with a litany of nightmares that he says are sure to happen if we don't pass his bill.


PRESIDENT BARACK OBAMA: If we don't pass it, here is the guarantee. That the people who are watching tonight, your premiums will go up. Your employers are going to load up more costs on you. Potentially, they're going to drop your coverage because they just can't afford an increase of 25, 30 percent in terms of the cost of providing health care to employees each and every year. And the federal government will go bankrupt.


HANNITY: All right, now, oddly, he painted the same dire scenario when pushing Congress to pass that stimulus bill. Remember this?


OBAMA: I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity.

And our nation could lose the competitive edge that has served as a foundation for our strength and are standing in the world. In short, a bad situation could become dramatically worse.


HANNITY: All right. So it looks like when the president gets desperate, his go-to move is to scare you, the American people.

Joining me with reaction is Fox News contributor, we call him the architect, the one and only Karl Rove.

Karl, welcome back.

KARL ROVE, FOX NEWS CONTRIBUTOR: Sean, thanks for having me.

• Video: Watch Sean's interview

HANNITY: All right, how irresponsible is it if an American president says, either you pass this bill or this country can go bankrupt?

ROVE: Yes, this is a constant tactic of the president. Look over here, but for God's sake don't look over here. I'm going to scare the heck out of you, but that's going to hopefully distract you from fundamental facts about this bill.

This bill will increase everybody's premiums higher than they would otherwise be. This bill will increase health care costs faster than they would otherwise be. This bill will not cover 30 million new Americans with health insurance as he said on Sunday. Fifteen million of that 30 million will be forced onto Medicaid, which is government-run health care.

I mean it's a constant tactic. Look over here, pay attention to my scare tactic, but for God's sake, don't look over here and see what the real facts are.

HANNITY: All right, are there any moderate Democrats that you see in the Senate — Ben Nelson, Evan Bayh, Mary Landrieu, Blanche Lincoln, Joe Lieberman? Anybody that you see in the Senate that would oppose whatever this bill is, because nobody really knows what it is?

ROVE: Well, look, they're trying to find a way for every one of these people to get an excuse to vote for it. I give this little fig leaf to small business. Or, you know what? We've got some abortion language in here. Are we trying to do this, are we trying to do that?

Let's be clear about it. Even without a public option, even without a Medicare buy-in, this is a bad, an appallingly bad bill. And nothing that they are talking about now goes to solve the problems in this bill, which are it's too expensive. It doesn't solve the problem. It increases the government's hold in our health care decisions.

And it fundamentally takes all the bad parts of the current system and makes them worse by disconnecting the consumer more from the decision on health care.

HANNITY: And it's that and also the latest CBO number shows that 25 million Americans will still remain uninsured in spite of this huge price tag.

ROVE: Sure.

HANNITY: We had Senator Coburn, I talked to him earlier today, and he says they're planning a vote on Christmas Eve in the Senate. Is that possible? Are they going to stay there until Christmas? Nancy Pelosi, they packed their bags in the House, they're going to home.

ROVE: Yes. Well, the House is out of here, but look, Harry Reid is desperate to try and get a bill. We've heard this before. The president said, I want a bill before you go home on August 7th. I want a bill by the end of September. I want a bill by the end of October. I want a bill by Thanksgiving.

So now they're saying we need a bill by Christmas. They understand the faster that they try and pass this thing, whatever this thing is, you're right, we don't even — we have not seen — shown legislative language beyond what came out a couple of weeks ago. We haven't seen Harry Reid's so-called manager's amendment, which is an entirely new bill, but what we have seen is bad.

And they know that the longer that people get to look at whatever it is they put out there, the less support there is. All of the polls, Washington Post/ABC came out today, this bill is in trouble. Wall Street Journal is coming out tomorrow. This bill is in trouble. And as a result, President Obama, who entered the year with sort of so-so but sort of midrange numbers is ending the year with the worst job approval numbers of any elected president in modern history.

HANNITY: Well, and for good reason, I would argue. But now, all right, you brought your whiteboard and there are a number of ways that this can unfold. And we've obviously got the House version, we've got the Senate version. Then they're going to go to conference committee. You see two ways that you think this bill could unfold. What are they?

ROVE: One of them is they could go to the conference committee, where they take the Senate bill and the House bill and have a vote, work this bill over, then have a vote at which a majority of members from each branch — from each House, from each chamber, come together and support a compromise measure.

But there's another way to go about doing this that doesn't involved a conference committee. It's called ping-pong. The Senate sends its bill back to the House. The House basically writes a bill that is not exactly the House bill but something not exactly the Senate bill and sends it back to the Senate, hoping to force the Senate into accepting whatever the House has written.

This could conceivably happen several times where the Senate says, OK, well, you did that, we'll do something a little bit different and send it back to you.

HANNITY: I don't see it.

ROVE: Generally you can only on a big thing like this, you can ping-pong at once. But I think we're likely to see a conference committee and it's likely to be ugly and we're likely to see things that we think are gone now, come back again in conference committee because there you watered down the impact of moderates and increase the pressure to do what the party wants you to do.

HANNITY: All right. But now back to the polls. This president in one year has the worst approval rating of a president in modern history. You've got 61 percent of the American people against this bill. Most Americans would now rather do nothing according to a poll that comes out today. And yet, they're still forcing this, still pushing us against the will of the American people.

What are the political consequences as we now head into a midterm election?

ROVE: Well, look, and we're going to see a lot of Democrats get defeated in the United States Senate races. We already have five Democrats who are now behind their Republican opponents. Five incumbent Democrats behind their Republican opponents.

That is amazing.

I'm looking at numbers for incumbent Democrat members of Congress that are worse than Jon Corzine had at the beginning of his losing bid for re-election in New Jersey. We are likely to see a sweep in Senate races next year where the power of incumbents is weaker and where we've got a lot of Democrats who have voted too many times for too many bad things that the American people and their constituents back home don't like.

HANNITY: And the reality is, with all the talk about a government option, no government option, Medicare buy-in, no Medicare buy-in — no, you cannot tell the American people tonight, nor can they what is actually in this bill. We don't know. Nobody knows.

ROVE: Yes, I can.

HANNITY: You can.

ROVE: You have $450 billion in Medicare cuts.

HANNITY: That we know.

ROVE: … which are — you have $80 billion of taxes on drugs. You have $40 billion worth of taxes on medical devices. You have hundreds of billions of dollars in new taxes which will have to be paid for by medical consumers. You have huge numbers of new government agencies. And as Senator Coburn probably pointed out to you, 1,357 instances where the secretary of health and human services has to write rules and regulations that every health provider in America has to live by.

HANNITY: All right. Putting aside all the bad things that are in the bill, we don't know what their new plan is. I probably should have worded it different — we don't know what their new plan is, short of what we know that they definitely have bought into which is bad.

ROVE: Well, we know they're about the exchange. But you're right. What's going to happen is, is that in the next couple of days, something is going to emerge from the CBO, evaluating language that the American people have not had a chance to see and that Harry Reid is going to try and jam this thing through as American people's attention is being taken away by relatives arriving in town and last-minute gift shopping and an attempt to get the tree up and celebrate the holiday.

This is the worst kind of cynical leadership that Harry Reid is saying, I don't trust the American people to look to what we've got and accept it.

HANNITY: Hey, listen.

ROVE: So what I'm going to do is jam it through as quickly as I can with their attention taken elsewhere.

HANNITY: I have two words for Harry Reid.

ROVE: Look over here, don't look here.

HANNITY: I have two words for Harry Reid. And it's not "Merry Christmas." It's "Bye-bye, Senator."

ROVE: I think he's gone.

HANNITY: I think he's gone.

ROVE: I mean I think one of the reasons why he's in bad trouble in Nevada, the only thing that was going to keep Harry Reid from being defeated is if conservatives in Nevada cut each other up so badly that the people say, you know what, that person is worse than that guy that we really don't want to have back in there. And we're going to go for Harry Reid.

Heck, his own son is running away from him. Rory Reid who's running for governor of Nevada this year was asked about his father's incredibly bad ratings and walked away from his old man. I mean that really shows you're in trouble.

HANNITY: It doesn't get any worse than that. Karl Rove, thanks for being with us.

ROVE: You bet.

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