This is a rush transcript from "Hannity," October 28, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: A situation is developing on Capitol Hill tonight. Senate Majority Leader Harry Reid is vowing to push a government option through the Senate no matter what it takes.

Now centrists on both sides of the aisle, you know, Democrats like Joe Lieberman and Blanche Lincoln, and then Republicans like Olympia Snowe are standing firm against a government option which is causing problems for Senator Reid and the rest of his far left contingent.

Now these holdouts may force the senator to fall back on a procedure that is known as reconciliation. Now that would allow the government option to pass the Senate with a slim 51-vote majority.

But when the Democrats took over, now weren't they the ones led by the president himself who vowed to negotiate with and persuade their opponents rather than jam legislation through by the slimmest of margins?

And don't you think that when it comes to the most significant legislation facing this country in the past half century, well, that that might be appropriate?

Well, it turns out that President Obama thinks so, well, at least he thought so. Listen to what he told "The Concord Monitor" back in 2007.


PRESIDENT BARACK OBAMA: Got to break out what I call the 50-plus-1 pattern of presidential politics. We are not going to pass the universal health care with a 50-plus-1 strategy.


HANNITY: All right, so how will the Democrats proceed? Joining me now is the author of The New York Times best-seller, "Culture of Corruption," we're joined once again by Michelle Malkin.

Video: Watch Sean's interview

Michelle, welcome to the program.


HANNITY: All right, first of all, Harry Reid is not having a good day, a good week. Here's what he's now calling this. The government option co-op with an opt-out. Now we had Senator McCain on last night. He can't explain it. Can you explain it to this audience?

MALKIN: No. There's nothing to explain. We still have the CBO waiting to receive whatever Harry-care is supposed to be. And as Democrat senators have pointed out, there is nothing to analyze yet, so this is really the ultimate in vapor legislation which is a great term that the Heritage Foundation has used to describe this entire process.

And we've had this threat of reconciliation for the last seven or eight months now, and the phrase that Jim Mannly, Harry Reid's spokesperson, used several months ago was that they would pass this thing, quote/unquote, "by any legislative means necessary," unquote.

And Sean, it's so important to keep shining light as you are on the way that they are subverting the deliberative process to get this down our throats.

HANNITY: All right, now, there is this war — we've got Joe Lieberman promising to filibuster with the Republicans which I think is a significant development here if they go forward with the government option, but you have other, more moderate Democrats, Blanche Lincoln, Evan Bayh, Kent Conrad, Mary Landrieu.

All these Democrats are saying they don't want any part of this. Then you've got this other side of the Democratic Party saying no government option, we're not supporting it. So how do they resolve this internally?

MALKIN: Well, it's — well, they're going to do what Harry Reid has been threatening to do which is to use this reconciliation process, cut off debate, and remember that with this process, it severely limits the number of hours that they'll be able to debate this on the floor to 20 hours, severely limits the amount of amendments that they can place on this and they will try and do this by sheer force.

And you know what Harry Reid is going to do, too, of course. Despite the fact you have all these Democrats dropping like flies, he's going to demonize Republicans and blame conservatives for his own failures here. He did it when the doctor fix failed last week. That $250 billion evasion plan to cut that out of the CBO analysis and buy out the doctors.

Didn't work. He blamed the AMA, blamed the Republicans, and that's what they're going to do this time, too.

HANNITY: For those who don't understand what doc fix is all about, they were basically trying to hide the real cost of this, or at least $250 billion of it, by putting it in another form of legislation which is just a deceptive tactic.

I want to show you and I want to show our audience, Michelle, what Politico reported on today. They have — you know, Barack Obama's campaign arm. They have 20 finalists of this health care video contest and they got the American flag splattered with graffiti, and I want to show this and get your reaction to it.

Click here to watch the video

Your thoughts?

MALKIN: Well, I've been following this health care reform contest and I'm not surprised. This video was produced by someone who bills himself as the king of graffiti in Los Angeles. And this is where they turn for their agitprop and their propaganda.

It's all about emotion. It's all about tarring and feathering the opponents of the government health care takeover as somehow unpatriotic and the defacing of the flag, of course, is well within the mainstream of far left propaganda tactics. It's also interesting.

HANNITY: All right — yes, go ahead.

MALKIN: Go ahead.

HANNITY: No, you go.

MALKIN: I was just going to say it's also interesting to take a look at the other finalists and I urge people to do it and I link to it on my Web site because when they're not defacing the flag they're exploiting children and putting Obama-care propaganda and culture of entitlement lines into the mouths of children.

There's another video that I think is equally appalling that has all of these kids talking about how they deserve government health care, and if you don't give it to them then not only do you wish death upon children but puppies and everything that's American as well.

HANNITY: That's pretty shocking, pretty amazing. It's going to be interesting now that this has been revealed in what happens in the days to come.

I want to go back because you pointed out how the Democrats with this doc fix tried to manipulate the numbers. Remember, they voted twice in the House and the Senate. They don't want to put this bill online for 72 hours and let the American people dissect this.

Now there's one other interesting battle. For those that remember — remember John Kerry said, "I voted for the $87 billion before I voted against it," and that became a big issue in 2004.

Is it possible that Democrats can be a little bit sneaky? That they can vote for cloture, in other words, allowing the legislation to move forward, and then voting against the legislation so that that tag without having voted for it? Isn't that cloture vote going to be the significant vote? Isn't that ostensibly a vote for the bill?

MALKIN: Yes. And I don't think that some of these Democrats who have issues and problems with Harry-care, Obama-care, whatever you call it, are going to fall for doing the Kerry approach to this. And Evan Bayh has actually been quoted in the papers today saying that he sees no substantive difference between the cloture vote and the policy vote.

So I think this is doomed. And I think Harry Reid is in a lot of trouble, so is President Obama. And that's why you're seeing such desperate measures as this Organizing for America video drive. They have nothing left but fumes, vapor, emotion and anecdotes to try and sell this plan on.

HANNITY: Yes, well, and then he said he looks at those votes as one of the same. All right, last question, changing the topics a little bit. We've been discussing at length, you know, Alan Grayson, Congressman Grayson, and as of yesterday morning, he wasn't going to apologize for using the term "K Street whore" to describe a woman.

Then I guess he — there was some political pressure from within the Democratic ranks and he apologized. What would be the reaction if it was a Republican?

MALKIN: Well, you know, we'd be strung up by our toes. Imagine if you had said something like this, Sean, about a lobbyist on Capitol Hill or any other Democratic public figure. That is the massive Grand Canyon sized double standard that conservatives always have to deal with in public policy.

So Grayson has at least given the semblance of some sort of apology or backing off. My question is where is the apology or backing up from this White House? Because President Obama praised Alan Grayson as a paragon of congressional virtue at a fundraiser in Florida this week.

HANNITY: You know.

MALKIN: That's his standard of civility?

HANNITY: It's a great point. I got to tell you, Michelle, this is so important because for all the town halls and everything that happened this summer, these are the critical weeks if you don't want health care. It's going to be this week, it's going to be next week, so we appreciate you as always being with us. Congratulations on the book.

Michelle, thanks for being with us.

MALKIN: Thanks, Sean.

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

Content and Programming Copyright 2009 Fox News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2009 CQ Transcriptions, LLC, which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, LLC'S and CQ Transcriptions, LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.