This is a rush transcript from "Hannity," July 12, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The White House is dialing back its rhetoric ahead of the 2010 midterms. Now on Sunday, propaganda minister Robert Gibbs floated the possibility that Democrats would, in fact, lose the House this November. Watch this.


ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I think there are - no doubt that there are a lot of seats that will be up, a lot of contested seats. I think people are going to have a choice to make in the fall. But I think there's no doubt there are enough seats in play that could cause Republicans to gain control. There's no doubt about that.


HANNITY: All right. Now clearly, that prediction is part of an effort by the White House to lower expectations for the midterms. And as with anything that Mr. Gibbs says, it should be taken with a grain of salt.

But speaking of Democrats losing control, Texas Congressman Ciro Rodriguez is in the hot seat today after shocking video of his behavior at a recent town-hall event surfaced on the Internet. Take a look at this.


REP. CIRO RODRIGUEZ, D-TEXAS: If we have not done anything in the next eight years, based on CBO - Congressional Budget Oversight - it would have cost $12.1 trillion.

UNIDENTIFIED FEMALE: The CBO is already revising its numbers for Obamacare.

RODRIGUEZ: Let me finish. Otherwise - you're not willing to...

UNIDENTIFIED FEMALE: No. Tell the truth then.

RODRIGUEZ: Ma'am, don't accuse me of not saying the truth. It's not appropriate. I'm not going to take it, OK. If you want to dialogue in a civil manner, but don't say that I'm not saying the truth.


HANNITY: Temper, temper. Now, a short time ago, Rodriguez released a statement apologizing for losing his temper at the event but said that political operatives associated with his opponent's campaign were to blame for the exchange, not him.

Here with reaction are former Democratic pollster, Fox News contributor Pat Caddell and from the Wall Street Journal John Fund. I guess the same thing holds for George Allen and macaque. It's the other guy's fault. It wasn't his. You know?

PAT CADDELL, FOX NEWS CONTRIBUTOR: Well, the operative's. But the interesting point, Sean, is it had to do with what? It had to do with spending.

HANNITY: Has to do with the truth.

CADDELL: He was $2 trillion light on the figure, and the woman corrected him. She actually was right.

JOHN FUND, WALL STREET JOURNAL: And there's no evidence these women were actually anything more than constituents of his.


FUND: They weren't on any payroll.

HANNITY: In one sense, he made the mistake a lot of Democrats, you know, are unwilling to make. They - he actually went out and met people. They're - these guys are hiding in their foxholes.

FUND: I think this tape will convince a lot of Democrats to keep hiding.

HANNITY: Yes, exactly.

CADDELL: Well, that's the problem. People are upset. Even Democrats are upset now with the spending and what's happening on the economic front. The problem with the Democratic base is it's in trouble because the jobs aren't there, and we're not growing. And they're backing out.

HANNITY: So you've hit on something. Democrats, we read in The Washington Post last week their big strategy is they're going to dig up dirt on Republicans.

Thirty-eight percent of independents now, that's it. That's the support Obama gets. Democrats at the - at the governors' convention are livid, because they know their chances in November are not very good.

But here's the problem. Here's the problem. I am concerned Robert Gibbs - this is all a strategy to raise expectations that Republicans cannot meet come November.

FUND: Well, they're going to try to scare the base to come out, because they're going to say the boogieman Republicans are going to take over. The problem is, if you do too much of that, you dispirit the base, and you have them stay home.

CADDELL: It's very tricky, but he's doing exactly what I would do, which is say the truth, which is we have - we're facing losing, try to motivate the base and also try to put pressure on the Republicans, the people saying you have a choice.

The problem is that isn't the choice they're making right now. When you ask about the negative things, that's what we've been doing in campaigns. That's what we've been doing in campaigns when the stakes aren't like they are now, and it doesn't work. Right now people are saying do you want what's going on or you don't? And we're - and Democrats...

HANNITY: In an effort to energize their base - we talked about this earlier with Governor Palin - they're - the NAACP is going to go out there, attack the Tea Party Movement as racist, which maybe it will have some impact on energizing them. All it's going to guarantee is that...

FUND: Sean...

HANNITY: ... every conservative's going to vote.

FUND: Sean, look, what does the Tea Party say? The Tea Party says Obama is a big spender. He's too liberal. And some of them go so far as to say he's a socialist.

Well, Stan Greenberg, who used to be Bill Clinton's pollster, took a poll. A third of Democrats say he's a big spender. A third of Democrats say he's too liberal. Thirty percent say he's a socialist.

HANNITY: Democrats?

FUND: Democrats!

HANNITY: By the way...

CADDELL: Moderate Democrats -

FUND: These are not Tea Party people. Moderate.

CADDELL: Over half, over 50 percent.

HANNITY: Fifty-five percent of people in that poll say that that is the proper adjective for this president, which by the way...

CADDELL: Stunned me. I want to confess something. I had been saying I didn't think the term had that much resonance with the American people. I was wrong. This is - this shocked me.

FUND: This is devastating.

HANNITY: Are you saying Hannity was right? I just wanted to get you on the record.

CADDELL: No. I never - I did not say that, Sean. Let's not go so far here.

HANNITY: Well, I still want to know if you voted for him, because I can't get a straight answer out of you, Caddell.

CADDELL: But you're going to get a straight answer on this, aren't you?

HANNITY: But 55 percent - look, there's no jobs. He can't contain the - so no leadership on the oil spill. And 55 percent of the country thinks he's a socialist. I wouldn't want to be in his position, 113 -

CADDELL: Look, it's beginning to crack. It's beginning to crack for Democrats. And this is the crisis. This is why the governors are so upset. By trying to move, for instance, on securing the Hispanic immigration base, well, Hispanics are cracking on the economy right now. You're beginning to see the first cracks in his Hispanic support.

You cannot - the Democrats cannot win with minority voters and with...


FUND: The Democratic governors told the president, after the health care bill passed, "OK, you dragged us through health care. It cost us a lot of support. The one thing we don't want you to do, don't drag us through immigration."

HANNITY: And they did.

FUND: What has Obama done? By suing Arizona, he's put immigration front and center and not in a favorable light for Obama.

HANNITY: We've got to run. Guys, good to see you both. Appreciate it.

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