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

SEAN HANNITY, HOST: The stakes of the 2010 midterm elections could not be any higher. Now President Obama and his party are able to maintain control of Congress this November, they will be handed a golden opportunity to push their radical agenda forward.

From cap-and-tax, to amnesty, a victory would put anything and everything on the table for the Democrats. And after only about a year in office, Americans know all too well the damage that the president's economic policies can cause.

Now the unemployment rate has soared from 7.7 percent at the time of the president's inauguration to where it currently stands at 9.7 percent. This despite assurances from the administration that unemployment would remain below 8 percent if the stimulus bill passed.

But it's wasteful spending like the $787 billion stimulus package that helped skyrocket the federal deficit to a record level under President Obama. It appears the president and Speaker Nancy Pelosi plan on tackling that deficit in part by raising your taxes.

Now take a look at this. Now currently the top income tax bracket is 35 percent. But President Obama has proposed raising that by five percent. He's also calling for a jump in Medicare taxes from 2.9 percent to 3.9 percent.

But it doesn't end there. Those earning over a million dollars will be slapped with an additional 5.4 percent surtax bringing the grand total for top earners in the country to 53 percent. Now that's up from 42 percent under current law. And by the way that does not include your state income tax, property tax or sales tax.

Now this is the type of change President Obama is bringing to America. And this is what is at stake in November. All of this information and much more can be found in part one of a brand new book, it's "2010: Take Back America, A Battle Plan, the Stakes, the Targets, the Strategy and What You Can Do."

Joining me now is the author of this brand-new book, the one and only, Dick Morris.

Dick, welcome to "Hannity."

DICK MORRIS, "2010: TAKE BACK AMERICA": Good to see you.

HANNITY: And by the way, I'd shake your hand —

MORRIS: What's the elbow bump?

HANNITY: But the elbow bump is because I don't want you to get sick. I've been on the road, and I have a bit of a strained voice.

MORRIS: The hand bump is meaning, not shaking.

HANNITY: Yes, no. I just —

MORRIS: I just got to be really focused here. Yes.

HANNITY: Barack — first of all, I love the book.

MORRIS: Thank you.

HANNITY: I love it. And it is — you get into some great detail here. And there are some great strategies in here. I want to get to all that.

I want start at the beginning because this is important. You got to start to make the case. Barack Obama is ruining America. He's destroying everything that makes us great.

Two stories on Drudge today. White House science "czar": U.S. can't expect to be number one in science and technology forever.

We got another picture of the president bowing before another world leader, Dick, and saying in another piece — Rogan puts it in his piece today — that you know, talking about America, you know, he was comparing us to, you know, a third world dictatorship, for crying out loud.

MORRIS: In your text segment that you used to intro this, you talk about the tax increases he's raising.


MORRIS: If Obama's tax plans pass, the one he's now got on the table, the United States will go from 27th in the list of 30 countries in tax level to fourth. We will be exceeded only by Belgium, Holland and Finland.

HANNITY: In your book.

MORRIS: In the book.

HANNITY: In the book.

MORRIS: And the tax rate. And — but the point you made about the science thing, we have a chapter in here, pessimism is the bodyguard of socialism, that which whenever they're proposing socialism, they say, "Oh well you won't get to see doctors but you wouldn't see them anyway. The day of lots of doctors is over. They'll all be unemployment but it's because we're in an era of permanent unemployment."

And they use pessimism to defend their outcomes.

HANNITY: You know it's funny because I — we've been attacked, those of us — and I did an interview recently. I was attacked for saying he's a socialist. He is a socialist. And you know that's very simplistic.

When 50 percent of the American people, households in America, don't pay taxes any more.

MORRIS: Yes, that's right.

HANNITY: And — if our tax rate is going to go from, what, 43 to 50 some odd percent, doesn't include your property tax, your state income tax, or sales tax.

MORRIS: Right.

HANNITY: We're up to neck nearly 70 percent of what some people will make in states like New York and New Jersey.

MORRIS: That's right. We are. And one of the basic themes of the first part of this book which is called "The Stakes" which we'll talk about in this segment, is that we haven't seen nothing yet. The permanent outcomes that will eventuate if Obama's programs pass is staggering.

One is permanently high unemployment because of the high tax levels that Europe has that we are now adopting. In 2008 the United States ranked fifth behind France, Germany, Italy and Britain in taxes of those main countries.

Now it ranks — unemployment, sorry.

HANNITY: Unemployment. Yes.

MORRIS: Now it ranks first among those five countries in unemployment. So the U.S. is going to have a permanently high unemployment rate —

HANNITY: It's frightening.

MORRIS: — if we give Obama three more years.

HANNITY: You go into this in great specificity. But here's what — I want to go to the basics first. And then I want you to get more specific. Because what you are saying is, is that this vote in November, what you say is the single most important thing you will do.

This is a critical turning point in America's history. Free enterprise, you write, hangs in the balance.

MORRIS: My wife wrote that line. And she said voting will be the single most important thing you do in the whole year of 2010.

HANNITY: Yes. And what — interesting, and I don't want to jump to the end of the book. But it's important, because you really make a strong case about what people can do.

MORRIS: Yes. We will.

HANNITY: And it's very different than past years.

MORRIS: Let's cover that more next week.

HANNITY: Correct. You conduct your own interview, Dick. Go ahead.

MORRIS: The first thing is the permanent unemployment. The second is, we're used to concept of inflation. But not inflation that is caused by the government, deliberately, because it's only way to pay down the debt.

HANNITY: You say there's no way — what you say is, Obama has dug us so deeply into debt there is only one way out, and you say it's inflation.

MORRIS: Well, the other way is tax cuts but he's not about to do that. But look at the stat, these are tables I took out of the book. On September 10, 2008 the money supply was $875 billion. On December 2, '09, it was $2.1 trillion.

You can't have an increase like that without unbelievable inflation.

And then there's the issue of the deficit. In 2008 the deficit was 3.2 percent of our GDP. Now it's 12.9 percent of our GDP. In one year it went from four percent to 12 percent of our economy.

What that — now right now we're getting the deficit at a bargain basement rate. We're like the subprime borrowers because we're printing our own money so we can borrow it back and just pay three percent.

HANNITY: And China is buying up all our debt.

MORRIS: Not yet China. What's going on now is — going to a bank, and saying, "Hey, Sean, do you have any mortgage backed securities in your vault?" And you say, "Mortgage backed securities, I'm wallpapering with it."

Well, "Can I pay you 100 million bucks and get your securities?" And you say, "Of course. Here it is." Then the Treasury comes by and says, "Hey, Hannity, do you have $100 million you can lend me?" And you say, "Yes, a moron just gave me $100 million. What rate you'll give me?" And I'll say, "Three percent." You say sure.

But now they are no longer printing the money. They've stopped at this month. What that means is they're going to have to start paying China and Japan and Americans seven or eight percent interest.


MORRIS: Wait a second. What that means is, that out of the $4 trillion federal budget, one trillion of it, a quarter of it, will have to go to pay the interest on the debt. The total take of the personal income tax in the United States, of all 300 million combined, is 900 billion.

We'll pay one trillion just in debt service. We are like the couple that has to sign their paycheck over to the mortgage company.

HANNITY: We've only touched on some of the economic issues. And a lot of which we've discussed on a regular basis. Look at — we've got a picture up on the Drudge Report right now, you know, the president bowing to another world leader.

The White House "czar", America can't expect to be number one. We've got the video right there. He bows again. You know last week the president said if America is hit with a biological, chemical or crippling cyber attack, we won't respond with nukes.

But this — but then this weekend he says Al Qaeda wants nuclear weapons and they would use them but here's a terrorist state Iran is acquiring nuclear weapons and he says they have a right to nuclear technology.

I don't — I don't even think he is making sense of his own policy.

MORRIS: I think he absolutely is not.

The amazing thing about what's going on now with the country, economically, is that the spending and the borrowing are causing the unemployment. They're not curing it. It's like in the Middle Ages when they would bleed a patient to get rid of the evil spirits and if — set of the gun didn't recover they bleed them some more?

So instead our borrowing is elbowing aside the whole private sector. So government borrowing is up 40 percent. Mortgages down 24, car loans down 33, student loans down 40 percent.

The money isn't being lent out to anybody but the government. And as a result there is no economic growth.

HANNITY: We got to a take a break. Now when come back we're going to do some of the special with Dick Morris.

Now we're going to talk about the stakes of the 2010 election. And up next, we're going to reveal the targets. In other words, the vulnerable Democrats that you can help kick out of office.

When we come back, Dick Morris will do that.


HANNITY: All right, so we know the stakes of the November election are huge for the GOP and for the country. So which races will decide the outcome? The Republicans need to pick up 10 seats in the U.S. Senate to gain control of that body.

So is it possible?

Alright. Let's take a look at this map. The retirements of Ted Kaufman and Byron Dorgan have made Delaware and North Dakota almost certain GOP pick-ups. Now Republican prospects are also bright in Arkansas, where Blanche Lincoln doomed herself by voting for the health care bill.

Then there's also Nevada where Prince Harry Reid's days are numbered. And Colorado and Indiana which were also up for grabs.

And if Republicans can pull through in some of the closer races in Illinois, Wisconsin and maybe even take down Barbara Boxer who's struggling in California or Arlen Specter in Pennsylvania, the Senate will be back in GOP hands.

Now meanwhile the House of Representatives is a sea of vulnerable Democrats. Now Republicans need to pick up 39 seats to take back control. Now to put things in perspective the GOP picked up a whopping 54 seats in 1994.

So can it be done?

Dick Morris says these are the 37 Democrats the GOP should definitely defeat in November. Now this gang includes several Democrats who made themselves vulnerable by voting for the government health care takeover. And we know how the American people feel about that.

Now Dick Morris outlines all of this in his brand-new book just out tomorrow "2010: Take America Back." (ph) And we continue now.

All right, let's go through the Senate quickly.

MORRIS: Sure. Well, you have four open seats that we will pretty clearly win. Delaware with Castle, Indiana with Coats or Hostettler, North Dakota with Hoeven and Illinois — Kirk is now five or six ahead of Giannoulias. And Giannoulias is mired in a scandal with the family bank. He's state treasurer and his family owns a bank that's going bust. And he's involved in that.

Then you have four incumbents that are the walking dead. Specter in Pennsylvania, he's eight points behind Toomey. Reid in Nevada, he's behind all three possible Republicans —

HANNITY: By a large margin.

MORRIS: Lincoln in Arkansas, she's more than 20 points down. And Bennett, the appointed senator in Colorado who Norton is probably going to defeat. So that's eight seats. But we need 10.

Now the ninth seat will be Boxer's seat in California where very important news just out that —

HANNITY: Obama's going there.

MORRIS: That Campbell.


MORRIS: The former congressman is now only two points behind Boxer. Fiorina six behind Boxer in Rasmussen. But either one could take her. That's nine. That happens — Biden votes for Democrat and we lose by one seat.


MORRIS: That means we got to pick up either Gillibrand in New York or Murray in Washington, Wyden in Oregon, Feingold in Wisconsin, Blumenthal in Connecticut.

HANNITY: Feingold — and Tommy Thompson — if Tommy Thompson runs —

MORRIS: If Tommy runs, that's good.


MORRIS: But I'm not sure that he will. Now what we do in this book is we give you all the dirt on these incumbents. We go through every one of Harry Reid's corrupt land deals. Every one of the lobbying clients.

You know all four members of his family, all four sons, are or were lobbyists?


MORRIS: We go through how the casino industry supports him. We got through how he once built a bridge not to nowhere but on his own property with federal money.

HANNITY: We've talked about it.

MORRIS: We go through the whole bit about everything this guy has done. And then we get to Gillibrand, who is my favorite target.

HANNITY: New York.

MORRIS: Appointed senator in New York. She served for one year as deputy counsel of HUD. You know what she's in charge of? Subprime mortgages. Her job was to get new products launched. And that meant subprime loans to the poor.

Then she leaves Washington, goes into private practice. And in 2005 and 2006 she and her husband do a lot of trading in the market. You know what they bought? They shorted subprime mortgages.

HANNITY: Unbelievable.

MORRIS: They shorted Countrywide.

HANNITY: How come we haven't heard of this?

MORRIS: The companies she set up in the subprime she shorted and made 40,000 bucks profit on doing that.

HANNITY: Unbelievable. Alright.

MORRIS: And by the way she also — before that distinguished herself by spending her whole legal career — hiding the documents that proved that the cigarette company CEOs were committing criminal perjury.

HANNITY: Alfight. So — if Massachusetts was a shock.


HANNITY: Who would you like to see run on the Republican side?

MORRIS: Well, there are bunch of good guys.

HANNITY: You got Lazio.

MORRIS: Well Lazio is for governor. Blakeman is a good guy.



MORRIS: And DioGuardi is being talked about. Malpass, another guy they're looking at it. They could win.


MORRIS: And in Washington State, you want Dina Rossi who is the former governor candidate to run. But if not him, you've got —

HANNITY: We're going to mention Lazio because I've heard Steve Levy flipping from the Democrat to Republican who might be a deal —

MORRIS: He'll run as governor, I hope. Well, Lazio could come over and do that.

HANNITY: It'll be interesting.

MORRIS: That would be good.

HANNITY: All right, now quickly, the House.

MORRIS: The House.


MORRIS: The key thing is this. On DickMorris.com, my Web site, we have a new program. We'll be announcing it in the next couple of weeks. Adopted Democrat. We want everybody to pick a Democratic congressman who they love and we have a whole list of the ones that are vulnerable. And adopt them and contribute money to his or her defeat.

And every penny you give will go right on the air attacking the Democrat who you adopt. And this way we can get wealthy people in Georgia to focus on their guy or South Carolina to focus on Sprat or Ohio focus on Space —

HANNITY: In other words, people that are unhappy with the state of the country, they can get — for example, if their seat is not in play they can go find someone who is.

MORRIS: We'll give you an extra one.


MORRIS: I was talking to a guy in Shreveport and I was saying why don't you adopt Mike Ross, southern Arkansas? He's a gem. He voted against health care on the floor when it didn't count but for it in committee to get it out on the floor when it did.

HANNITY: Dick Morris, love the book. Out tomorrow.

MORRIS: Tomorrow.

HANNITY: And we're going to be out on tour together.

MORRIS: Yes, we will.

HANNITY: And we'll see you there.

— Watch "Hannity" weeknights at 9 p.m. ET!

Content and Programming Copyright 2010 Fox News Network, Inc. Copyright 2010 Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.