This is a rush transcript from "Hannity," June 24, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: My next guest pulled out a stunning upset victory against Strom Thurmond's son Paul in South Carolina's GOP primary last Tuesday. Now along the way he gained the support of the Tea Party Movement and a key endorsement from former Alaska Governor Sarah Palin.

When he was elected to the state legislature two years ago he became the first black Republican elected to that body in more than a century.

There's no question he is a rising star in the GOP. Joining me now is South Carolina congressman — candidate, or congressional candidate, Tim Scott.

Mr. Scott, welcome to the program.

CONGRESSIONAL CANDIDATE TIM SCOTT, R-S.C.: Thank you. Good evening, how are you?

HANNITY: You know, I read something that really shocked me. And you would become the first black Republican congressman since my good friend J.C. Watts retired in 2003.

Why do you think there aren't more African-American candidates and members in the Republican Party in the House?

SCOTT: It's exciting — this is an exciting year for Republicans. The truth is that all across America we've had more African-Americans running as Republicans this year than any year since Reconstruction. So my perspective is that this is the turning year because the Obama administration is driving more people to take a serious look at the Republican Party.

That's good news for us. We'll have more candidates. And I look forward to having company in Congress.

HANNITY: You know what? But it drives me nuts. I'm going to be honest. As a conservative, if we break down demographics which we always do in every election cycle. We always s find 90 plus percent of the African-American vote goes to the Democratic Party.

Why do you that is?

SCOTT: There's a tradition. I think when you look to the future what you'll find is that the Republican Party is building a bigger party base on stronger values. The future of the Republican Party and the future of America is based on a values system and the issues that drive those values are on our side.

So I believe that in the next generation we'll see a number of African-Americans, more Hispanics, and we'll see that the strongest party that we can be is a party that's based on values. And that's what we'll continue to do.

HANNITY: All right, according to your bio, you grew up in poverty. You had you a single mother. Your mom worked 16 hours a day to keep you and your brother in school. How do you think that impacted your political point of view?

SCOTT: I think it helps me to realize that every day there's — there are Americans all throughout this country that are struggling just to make ends meet. I think about my grandfather who's 89 years old, and the last thing he needs is more money out of his pocket.

We have to make sure that the American people continue to keep more of their money. We have to limit the size of government. And that's one of the reasons why I've taken a serious stand against Obamacare.

As a state legislator I was the first legislator to write a bill to nullify Obamacare because in the end it taxes too much, it's bad for business and it's unconstitutional.

HANNITY: If you were going to grade Barack Obama, what grade would you give him?



SCOTT: Well, if you look at the — the expansion of the government, you look at a $13 trillion deficit. That is more than problematic. You think about the $76 trillion of unfunded liability.

You think about the move toward socialism. Our country can't afford it. We have been brought to the brink of bankruptcy. And that is not good for us. We are spending money of an unborn American. We've got to stop the insanity in Washington.

And the fastest way to do that is to limit the size of our government, limit the spending of federal government, by taking a look at our constitution and heading back in that direction.

HANNITY: Many of my friends who are conservative, and African-American, experience — they are called all sorts of names, horrible names. We just had Erik Rush on recently, he wrote a terrific new book about this.

Have you experienced that in your life?

SCOTT: I have. I've had the good fortune of being an elected Republican for the last 15 years, on a local level and now in the state level. What I learned in the beginning was that it's a tough road to hoe.

The first time that I was elected I was called the Judas Iscariot of the black community because I took a stand that was inconsistent of cutting across the grain. Now in my community, I probably receive between 25 and 30 percent of the African-American vote because I consistently stand on the principles and the issues.

I think the black community by and large is a very conservative community. We have to consistently engage all Americans on the issues that we stand for as a party. And I think if we consistently do that, everywhere in this country we will find that people and our message resonates with the people.

HANNITY: You know, there's always somebody behind people that achieve a lot in their lives. And obviously you've achieved a lot. And you've broken a lot of barriers in your life. You talk about your mother.

You have an interesting story. You had you a mentor. A Chick-fil-A operator. What can you tell us about him?

SCOTT: Well, I'll tell you. When I was in the 9th grade I was flunking out of high school. And that's why I'm so encouraged by the fact that America is the place where opportunity and American exceptionalism is alive and well.

As a freshman in high school I was flunking out. I failed world geography, civics, Spanish and English. And when you fail Spanish and English, they do not consider you bilingual. They may call you bi-ignorant because you can't speak any language. And that's where I found myself. But I had a mentor. John Moniz came along at the right time. A Chick-fil-A operator, a Christian and a solid conservative. And he started teaching me that you could actually think your way out of poverty.

You didn't have to entertain your way out of poverty, you didn't have to play professional football. But as a small business owner you could think your way out of poverty. And it was amazing lesson for a 15-year- old.

But over time, 25 years later as a small business owner what I realized is that John was 100 percent right. He told me a great story which was, you can add to your income if you're an employee. But if you're creating jobs — and the only place you can create jobs is in the private sector — so if you're creating jobs you can multiply your income. And that was just an important lesson.

And 25 years later, once again, as a small business owner I realized that we must consistently put the money in the private sector and get it out of the hands of the government.

HANNITY: Tim Scott, and now I know after meeting you why you are considered by many a rising star in the Republican Party. Thanks for being on "Hannity" tonight.

SCOTT: Thanks for having me.

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