This is a rush transcript from "Hannity," March 5, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Good news America. At least what Senate Majority Leader, Harry Reid is calling the latest job numbers, released this morning. And despite the 36,000 more Americans who lost their jobs last month and the fact that the nation's unemployment rate remains a stunning 9.7 percent, Prince Harry, he says this is good news. I'm not kidding; take a look:


SEN. HARRY REID, D-N.V., SENATE MAJORITY LEADER: Today is a big day in America; only 36,000 people lost their jobs today, which is really good.


HANNITY: All right, so Harry what the heck are you talking about? You talk about a guy that's out of touch, but even as more and more Americans lose their jobs, President Obama continues to blindly push forward with his plan to overhaul the nation's health care system. So I guess he really didn't mean it when he made this pledge in the State of the Union:


PRESIDENT BARACK OBAMA: That's why I'm calling for a new jobs bill tonight.


HANNITY: All right, now clearly his focus has not been on jobs, it's been on health care and health care and more health care and that's all we seem to hear from this president, day in and day out.


OBAMA, FEB 3: We got to finish the job on health care.

OBAMA, FEB 9: Boy we'd like you to get health care settled, one way or another.

OBAMA, FEB 20: I'm inviting members of both parties to take part in a bipartisan health care meeting.

OBAMA, FEB 22: That's why, we've taken up the cause of better health care.

OBAMA, FEB 25: Health care.

OBAMA, FEB 25: A health care summit.

OBAMA, FEB. 27: The rising cost of health care.

OBAMA, MARCH 3: Reform health care so that it works.


HANNITY: All right so when the President Obama and Democratic leaders like Harry Reid; plan to make jobs their number one focus, and how high does unemployment have to rise to capture their attention? Here with analysis; from The Weekly Standard we Fox news contributor Stephan Hayes; from the Fox Business Network, senior correspondent, author of the book, "The Sellout," Charles Gasparino is with us. By the way welcome to the family, good to see you.

• Watch Sean's interview

Welcome to the show, all right, I found this extraordinarily out of touch, arrogant, and frankly for the people, the 36,000 people, if I was one of them, I'd be livid tonight.

CHARLES GASPARINO, FOX BUSINESS NEWS CORRESPONDENT: I think it's scary. I mean listen, what we have right now is the definition of a jobless recovery. Businesses are making money, GDP is improving, yet small businesses, I don't mean the guy that mows your lawn, I'm talking about companies that employ between 200 and 2,000 people, those are the businesses that generally, out of a recession start hiring the most; they don't want to hire.

Now why is that? Well as he's given Wall Street firms all these benefits, guess what small businesses are looking for? Cap-and-trade, higher taxes, and health care taxes and it's as simple as that.

HANNITY: Steve, but remember, but they'll tell you, no no no we've saved 2 million jobs. How do you make the case that you saved 2 million jobs, when you lost 4 million jobs? Help me out.

STEVE HAYES, THE WEEKLY STANDARD: No, I mean, I don't think they can make the case. They'll point to the Congressional Budget Office and the scoring that the CBO has done, but we know that the CBO estimated that the stimulus package overall was going to cost $787 billion and less than a year, they revised it upwards to $862 billion.

So the CBO is certainly not infallible in there, and there are plenty of other reports that suggest that stimulus package to the extent that it did anything, did very little beyond enabling State governments to hire state workers. So it hasn't done what they've said it's done, plainly.

GASPARINO: That's a great point, I mean right now what you have is three percent unemployment among state workers and city workers; 23 percent unemployment in the construction trades, maybe more than that. That is —

HANNITY: Huge housing decline this week.

GASPARINO: That gets to the scandal here. This is kind of a scandal. He promised us, Obama promised the American people, shovel ready jobs.

Guess what, that money that was transferred to states, as part of the stimulus package, was suppose to go into these shovel ready jobs and it never happened. What they did was they hoarded the cash; they kept the paper pushers in Albany and California working and construction workers are out of work.

• Do you think Obama is focusing enough on job creation?

HANNITY: This didn't take, you know, a genius to figure this out, because the money was spread out 2010, 2011, 2012. So it was really always about the expansion of government and it was about advancing his ideology.

All right, when we look at real numbers, this is what you do for a living, and we look at the real unemployment rate, those that have given up looking for jobs and those that are under-employed, are we really at 16.8 percent?

GASPARINO: Yeah, we're at 17 percent and that's where this gets really scary; when you know you know people that have given up, people that still can't find — I mean what's scary about this recession is that people are out of work a real long time. I mean I know people that are out of work two years, I mean that's a long time, particularly when you have what's known as, at least according to GDP, the recession is over. That's what bizarre about this thing.

HANNITY: Steve, I interviewed a guy from the Weekly Standard and he said, he has an article, and he said, the coming recession of 2011, 2012. Is it possible that we run into a lost decade situation like Japan?

HAYES: Yeah, I mean, you know Lord let's hope not. I mean I there are conflicting signs, I'm sure Charles can speak to this probably better than I can, but there are certainly signs that we've seen an end to the massive hemorrhaging of jobs that we've seen over the past year and to that extent it's good, I mean the household survey, the establishment survey, those things are suggesting that we're in this sort of middle area.

The big question I think is, do we go back, is there a double dip or do we, or is this an actual recovery in the way that the numbers suggest?

GASPARINO: Well, we're going to get some pick up in jobs, I mean it may go down to nine percent, by the way, nine percent is nothing to write home about. Eight percent is nothing to write home about. That's a pretty lousy recovery.

And then here's the problem that we have, because he spent so much money, because there is a fear of possible inflation, particularly with stocks, with financial stocks going up as massively as they are, one of the reasons why, interest rates are so low. They are going to have to raise interest rates at some point. When they start, when the Fed starts raising interest rates, that's going to kill whatever recovery we have.

HANNITY: Now there's going to be a false sense that we're getting a lot of jobs back, because we're now hiring at $20 an hour, and by the way for people that are out of work, for the three, four months that they're hired by the government to do census work, I'm glad at least it helps them temporarily. But come July, those jobs all go away.

So those numbers — we're going to see an artificial reduction in unemployment that is going to go back up in what, July and August?

GASPARINO: Probably, probably, listen unemployment is going to probably come down, but it's coming down from such a high base that this is, this is still very bad for this country.

HANNITY: At nine percent —

GASPARINO: At nine percent, think about it, if I come to you and say, hey we're going to have eight percent unemployment in two years, what would you say about that?

HANNITY: No, I wouldn't be happy.

GASPARINO: It's a lousy recovery and it's a lousy recovery because small businesses don't want to hire.

HANNITY: And that's the point, there's not a lot of money in the economy, Steven. Let's go to our opening introduction here. Where we're talking about, regardless of what the president said in the State of the Union, there's still the fixation that is on health care, health care, health care, health care — it's like they keep banging their head against the wall, this is their Holy Grail. And the American people don't want it. They want people to focus in on jobs. Why do they focus in on health care?

HAYES: Well I think it's all driven by the president. Look, President Obama came to office — and you made this argument as well as anybody — he came to office to be a transformative president. I mean he does have, I think, a fairly radical big government agenda. He came to be a transformative president

If health care fails; if this initiative that he spent a year on fails at this point, he becomes Bill Clinton. He wants to be Ronald Reagan, he said that himself in an interview during the campaign. If health care fails he is not able to do that and I think that's really what's driving a lot of this return to health care, even though it doesn't make a lot of sense.

HANNITY: I'll ask you both this last question. I understand his radical ideology; I feel like I had him pegged almost from day one, I got a lot of criticism, a lot of heat. Here's what I don't understand. I don't understand the Democrats that are going to walk the plank for him? Why would they give up their careers and follow him down this path?

GASPARINO: I'm sorry I was trying to be polite for a change.


HANNITY: You're polite. We've only got 45 seconds.

GASPARINO: Well the reason why is simply this, a need a political victory and most of them are dumb when it comes to economics and because the economics are this, if you pass health care, by the way if want to know what could kill this sort of lousy recovery we might get, it's health care, it's small businesses.

HANNITY: What about their own political survival though, when did that instinct kick in?

GASPARINO: I agree, you know, I don't know I'm watching this thing, it's absurd.

HANNITY: All right good to see you, thanks, welcome aboard by the way. Steve always good to see you and we appreciate you both for being with us.

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