This is a rush transcript from "Hannity," April 13, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: This November the GOP looks to retake control of Congress. It will no doubt be a difficult battle. But joining me now are two men who know how to win and they are here to share their keys to success.

Lou Holtz coached the Notre Dame Fighting Irish to a national championship and Doug Schoen is an expert political analyst, pollster, and Fox News contributor.

A warm Villages welcome for these guys. Good to see you.


HANNITY: Alright. We've got to get in out way, Coach. Because you live here in the Orlando area.

LOU HOLTZ, FMR. NOTRE DAME FOOTBALL COACH: I love The Villages. And I'll tell you why, because the people here are positive, they're upbeat, they're always smiling. You got these some places they act like the world is on the back of their shoulders. It's great to be around people who love life and love this country.

HANNITY: They love — I agree with that. Now — but there's rumors running all around Florida. There are people that are speculating that you, Lou Holtz, are going to run for Congress out of Orlando. And I figure the people in The Villages tonight want an answer whether or not that rumor may be true. Are you considering a run, sir?

HOLTZ: My wife told me if there is any rumors about me it better be about politics and not about my social life.


HOLTZ: And I promise you, I cannot run at the present time. My health with a neck injury, et cetera.


HOLTZ: I will support — I believe in this country. I believe we have a lot of decisions to make. And I cannot run. I'm so old I don't buy green bananas any more. But I would support the people who are running against Doug.

HANNITY: Well, all right, in fairness, Doug is a Democratic strategist, but you have been one of the few voices in the Democratic Party that has spoken out against the radicalism, the extremism of the president, the Congress, their tactics.

You have taken a lot of heat as a Democrat. You're a lifelong Democrat, right?


HANNITY: What's — what has happened with the party? Where are the Blue Dogs?

SCHOEN: Sean, I'm a moderate Democrat. I believe in Democratic principles, American exceptionalism, giving people a chance to get ahead through the free market and incentives.

Probably doing more than you and Coach Holtz would — to give a social safety net to those in need. But core principles, freedom, liberty, those are core principles I was brought up with.

John Kennedy talked about them. There was a bipartisan tax cut under Ronald Reagan. Bill Bradley, a great scholar athlete pushed it through.

So, Sean, I think the Democratic Party has to come back to the kind of core principles that Bill Clinton —

HANNITY: Why are you laughing, Coach? Why —

HOLTZ: He's a Republican and he doesn't even know it!

SCHOEN: I'm not. I'm not.

HOLTZ: He just knows what he believes in, that's what we believe in!

SCHOEN: I'm a Democrat. Absolutely I'm a Democrat.

Bill Clinton balanced budget. George Bush, biggest surplus — biggest — deficit

HOLTZ: Wait, wait, wait.

SCHOEN: — in the history. Clinton, welfare reform.

HOLTZ: Wait.

SCHOEN: Cut entitlement —

HANNITY: Yes, but wait — all right. Go ahead, Coach.

HOLTZ: 2008, the Democrats took over Congress. That's when the spending went out of sight. You go to — no president can spend any money unless it's appropriated by the House of Representatives and that's when the Democrats — that's what changed.



SCHOEN: Pat Caddell and I have been critical of their health care bill. We wanted a more incremental approach. We think that Coach Holtz is right. There has been too much big government. The American people want limited government but they don't want no government. They believe that there is a center in this country that we all share.

HANNITY: Alright. But let me ask you this.

Has — but you are critical of Barack Obama. You're critical of the Congress. What has happened to the Democratic Party you're advocating old Blue Dog style Democratic politics? Where are those members in the Congress? Where are they in the Senate?

I don't see any voice of moderation in Washington, D.C. There is just this unending, you know, debt, deficit, taking a sledgehammer to every child and grandchild in this country.


HANNITY: To their piggybanks.

SCHOEN: It's absolutely clear that the Democratic Party has moved too far to the left. It's absolutely clear that the administration's voice is the loudest one. We will see in November the impact of these policies.

But that doesn't make Blue Dog centrist Democratic policies and core principles wrong. It doesn't.

HOLTZ: Now I'm not very smart. I went to school —

SCHOEN: You are smart.

HOLTZ: I went to school and (INAUDIBLE) no other basic reason. But let me tell you the difference I see. That one time we had one objective. Republicans, Democrats, make this country the very best. Give people a chance to be the very best.

SCHOEN: Still my objective.

HOLTZ: Now ,the minute you're worried about all the people such as lobbyists and the unions and anything else, and every time you object to satisfy them, our objectives to make this country great is —

HANNITY: Is he right?

HOLTZ: That's why we have a problem.

SCHOEN: Well, he's absolutely right.

HOLTZ: That's why there's a problem.


SCHOEN: We have to break the ties with both parties to lobbyists, to unions, particularly, Republican (INAUDIBLE) unions. If we don't that and have an independent Congress, we're sunk.

HANNITY: Look at, look at — alright. Currently in this country the top income tax bracket is 35 percent. We've got the president now calling for a five percent increase on that. He's going to raise Medicare taxes, a full percentage point, 25 percent.

He's going to add a millionaire tax 5.4 percent. So that means that the top earners in this country, their tax rates are going to be 53 percent. And if you live in a state like New York, add 10 more percent, add your property tax, add sales tax, a proposed value added tax, and we're at 70 percent of people's income.

SCHOEN: Well, Sean, you and I should follow the lead of the people in The Villages and move to Florida. That's for sure.

HANNITY: That's true.

SCHOEN: But that being said, we need —

HANNITY: They told me I'm too young, I can't move here for seven years.

SCHOEN: Well, I'm old enough.


SCHOEN: But you know what? We need pro-growth policies.

HANNITY: I want to move tomorrow.


SCHOEN: We need payroll tax holidays, we need incentives for small business.


SCHOEN: We need to return to the policies that John F. Kennedy supported in the '60s to prime the pump.

HANNITY: Alright. But — where was Evan Bayh? Where were any of these Democrats that would come out that would oppose not only the process, the bribery, the intimidation on health care and all the tactics that were used? But also the record deficits? Where were all those Democrats that you are appealing to?

SCHOEN: Well, Evan Bayh has spoken out. Sadly he's retiring.

HANNITY: Spoken out. It's too late.

SCHOEN: But he's spoke out about what's happened. We need Democrats who'll speak out which is why I'm here tonight to make it clear we need to go back what Coach Holtz and I agree on — free enterprise, hard work, American exceptionalism. And the centrality of our nation in the world.


HOLTZ: I believe — we all pay taxes. I'm happy to pay it, but I hate to have it abused, money wasted, no accountability. That's going to bother you. The other point is this. What we're trying to do is we're trying to punish people that are most successful. Like, if you're successful, man you must have done it illegally rather than with hard work and things like it.

I love what Laura Ingraham said the other day. She wanted to come up with "Hug a Rich Person Today." I mean, I think it is critical that we understand we start rewarding people with hard work and dedication.

HANNITY: Alright. Hang on. We've got to look at where we think the direction's going. Whether this intensity will continue, and I have a lot more with Lou Holtz and Doug Schoen. Coming up right after the break.


HANNITY: We continue now with the former head coach of the Fighting Irish Lou Holtz and FOX News contributor Doug Schoen here with us.

Alright. You've been warning your party that they're headed for a massive defeat. You have taken a lot of heat for this. How massive of a defeat do you predict for the Democrats?

SCHOEN: Sean, I got together with Pat Caddell last night, had one of our strategy sessions. We estimate 40 to 50 seats in the House, eight to nine seats in the Senate, very close to what Dick Morris predicted on this program last night. That's what our count is, Democrats —

HANNITY: You're predicting that the Republican — that Nancy Pelosi is fired?

SCHOEN: There's a pretty good chance. Fifty-fifty.

HANNITY: Fifty-fifty. OK. And you're saying that, you know, an outside shot that Republicans can take back the Senate even?

SCHOEN: There is an outside shot. The Democrats have to change their message and change it fundamentally to have a chance to survive.

HOLTZ: You can change the message all you want. The key is, are these people going to get out and vote? Are they going to go vote for the things to change this country the right way? If they get out to vote, it's over for Nancy Pelosi.

HANNITY: Yes, but voting in the Villages, it's — this is one of the biggest voting blocs in any one community in the country.

HOLTZ: I thought we were on national TV.

HANNITY: We are.

HOLTZ: When I speak to people on national TV — get out and vote. That's the only power you have as a citizen anymore is to voice your vote.

HANNITY: Yes, well, I agree with that. Do you — now, would you go around the country — people see you on the Great American Panel.


HANNITY: People talk to you about politics. What are they telling you?

HOLTZ: Well, they don't like the direction they're going. I mean, it's obvious that the country that I grew up in, the things I believe about whether it be defense, being the best you can, about helping other people, help the country. We have an obligation to help people that cannot help themselves. The mentally retarded, the physically retarded, et cetera. We also have an obligation to get everybody an equal chance to succeed. Nothing more than that. That's what this country is about.

HANNITY: I asked Marco Rubio this. I asked Colonel Allen West about this. I mean, is — are too many Americans just looking for the government?

I met a lot of people here. Here we are at The Villages. A lot of people, one of the biggest retirement communities in the country. Every person here has spent their entire life working hard, saving their money, paying their taxes, playing by the rules, you know, never breaking the laws, except speeding in their golf carts. And, no, no, no, in all seriousness — and now they're being asked to pay more. Now they — are we creating a cradle-to-the-grave society?

HOLTZ: What we're trying to do is get people obligated to vote to keep (INAUDIBLE) in power. We said a long time ago, if you can vote money for the treasury to yourself, then that's where everything is — so long as they keep voting. Yes.

And let me tell you something else. The more you give people the less they're going to work for it. But I'll tell you something else. The more you give people, the less they appreciate it. Whether it be on the football field. You give your son a car. He doesn't have to work for it. He ain't going to wash it. He ain't going to take care of it.

You can mark me down as undecided.

SCHOEN: Sean, we've got to get back not only to core principles but to cooperation. Break this gridlock, the partisanship, the special interests, and get people working together, because people do want government to play an affirmative role.

HANNITY: I got that.

SCHOEN: You know that. I know that.

HANNITY: I don't see that in Barack Obama. You know what I see? I see a radical, rigid ideologue that never wavers from his radical agenda.

SCHOEN: Sean those of us who believe in core principles. Have to talk about limited government, tax incentives and cooperation.

HANNITY: But where has this president ever shown any sense of moderation or compromise? He rammed health care down...

SCHOEN: You have to give him credit for getting an agreement to get the loose nukes under control. It may not be the policy you want, but we have to be proud of an accomplishment that is fundamental.

HANNITY: This president is now cutting our nuclear defenses on a day that he admits that Al Qaeda is seeking them and would use them. That makes no sense to me.

SCHOEN: Sean, frankly, I'm more concerned that we left Iran and North Korea out of this summit. But we have to talk about the good, bad, and to cooperate to praise our president when he does right.

HANNITY: Why would we sit down with a mad man like Adolf Jr., Ahmadinejad or Kim Jong-Il?

SCHOEN: You know what? We shouldn't.

HANNITY: And we trash Israel, our great ally.

SCHOEN: We shouldn't, but we have to recognize that not everything is bad. Not everything is wrong.

HANNITY: Coach, you're stressing over here.

HOLTZ: There's two different opinions or values or directions that Obama wants to go and connect with the regular people. Get out the speech that Reagan made in 1983. And I'll tell you what. He talked about being tough. The only way that you can have peace is with toughness. No other way can you do it.

HANNITY: Peace through strength.Trust but verify.

HOLTZ: Absolutely. And, you know — and be proud of this country. They asked — I think it was De Gaulle said to Dean Rusk in 1960, he wanted out of NATO. They wanted all the U.S. forces out of France. Dean Rusk looked at him and said, "Does that include our dead, as well?"

Let's be proud of what we've done, the contribution we've made to keep this country safe, not make apologies. But walk softly; carry a big stick.

HANNITY: You know, I will tell you the thing that — one of the things I fear the most is Barack Obama catering to the world's dictators is — is literally the Neville Chamberlain of our time.

SCHOEN: Sean, what he did quietly, after the coup in Kyrgyzstan, was to get together with the president of Kazakhstan and say, "You know what? Give us the right to fly over your country to get supplies to our troops in Afghanistan." That's good. That's important.

HANNITY: I would agree that's good. But he's also — but he also, according to this report, I think it was what's his name. He wrote this thing.

He literally said that the United States — he was making comparisons with this dictatorship with the United States of America.

He doesn't seem to have — in this sense, when he says America is arrogant, when he apologizes for America, when he doesn't speak out strongly about American exceptionalism, the American sacrifice for freedom, I find it insulting to the country.

SCHOEN: He can do more to stand up for democracy. But when he stands up for our interests, gets agreements on loose nukes, gets agreements to get supplies to Afghanistan, we've got to praise him and say thank you.

HANNITY: Last word. Last word.

HOLTZ: If anybody went in the Army for a year this would be a better country. I learned more in the Army than I ever did in four years of college.

HANNITY: Coach, good to see you. Thank you.

SCHOEN: Learned more from both of you than most folks do.

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