This is a rush transcript from "Hannity & Colmes," August 14, 2007. This copy may not be in its final form and may be updated

SEAN HANNITY, CO-HOST: Joining us live right here is the winner of the Ames Iowa straw poll from this past weekend, former Massachusetts governor, Republican presidential candidate Mitt Romney. Governor, good to see you, thank you — welcome to the freedom concert, by the way.

MITT ROMNEY, PRESIDENTIAL CANDIDATE: Yes, very exciting, nice job in putting that together, a terrific thing to do for our troops.

HANNITY: It's a great thing, very generous of you to come on out and say hi and support this great cause. We really appreciate it. All right, so how important was this a poll victory for you? You worked very hard in Iowa. You won. How important is this in the presidential race?

ROMNEY: Well, it was key for me. In some respects, I feel like I had two victories. One was doing well enough early on to get Mayor Giuliani and Senator McCain to say that they couldn't win and pull out. And then was to go forward and pull together my team. We built a strong ground organization, brought out the 4,000 plus people we needed and that's the kind of organization you have to have to put you in a good position for the caucuses coming up in January.

So it's a good start.

HANNITY: For December.

ROMNEY: Or December, they changed the date. But it gets me going and sends a message to my organization. And of course, you get a lot of barbs thrown at you by the opposition campaign. And when you overcome those and your message breaks through and people vote for you, that is a pretty strong signal.

HANNITY: There was some criticism of your victory that he worked too hard, he invested time, effort money and he was successful. But it is only because he put the time and money, and I actually found that pretty comical. What is your response to that?

ROMNEY: I think that anybody would be happy to trade places with me in Ames and win in the straw poll. Only the people who did not play probably wish they would have played. And the other guys who did play actually found that they couldn't beat me there and so I got the support I needed and got exactly what I wanted from it. Clearly, this is not the end of the contest. It's the very beginning. But a message is sent loud and clear that change has begun. Iowa had its statement. And they support my message.

HANNITY: One of the big controversies emerging today are the comments of Barack Obama and I want to play this for our audience because I think this is very critical. He's now made a number of misstatements in the last number of days. But let's roll this tape about what he had to say about our troops air raiding villages and killing civilians.


SEN. BARACK OBAMA, D-ILL., PRESIDENTIAL CANDIDATE: We have to get the job done there. And that requires us to have enough troops that we are not just air raiding villages and killing civilians, which is causing enormous problems there.


HANNITY: What is your reaction to that, governor?

ROMNEY: It is an extraordinary statement, a disappointing statement. He has now, how many times, three or four, five times, said many things that he must badly recognize as being a huge error, bad misstatements.

I think he's - in some respects, he has shown that he has just not given his words careful enough thought. I think it is dispiriting to our troops. It is disrespectful of our troops to say such a thing. The only people who say things like that our people on the other side of this issue.

HANNITY: He said without preconditions he would meet with people like Kim Jung-il, Ahmadinejad. Then Hillary said that that was naive and irresponsible. And then his response to that was he would bomb an ally, General Musharraf in Pakistan. And he would take away the nuclear deterrent that we have had in this country. And now he makes this. And here's a tough question for you. Does this coupled with these remarks here in your mind say that Barack Obama is not qualified to be president of the United States?

ROMNEY: Well, I don't think the people of America are going to select Barack Obama and I think this is an evidence as to why they should not and cannot.

I did not think they are not going to select Hillary Clinton or John Edwards either because America is not going to turn left. America is not going to say that we're going to abandon our support of our troops.

The comments he's made have gone beyond the idea of look, we have different views about what to do in Iraq. They go to the foundation of whether we support our troops and stand behind our military. What he said in his latest round, I hope he apologizes for and says it was a misstatement.

He has to do that. Otherwise what he's letting stand is a suggestion that somehow our troops are not noble and dignified. It is an outrageous thing and I have to anticipate he's going to retreat from it.

BOB BECKEL, GUEST CO-HOST: Governor, this is Bob Beckel in for Alan Colmes. You just said something interesting in your response before. You said that those are the kinds of things said by people on the other side. Are you suggesting that Barack Obama is on the other side of the United States on this war? You said the other side. I'm curious what you meant by that.

ROMNEY: I meant the other side of the aisle. Democrats have been saying — for instance, Harry Reid said we lost the war, forgetting of course that we knocked down Saddam Hussein and his military. And then when the surge was only days old, he said that the surge failing or had failed.

Consistently the Democrats are saying things which are playing into the hands of those who oppose our interest in the world and it is unfortunate. I don't believe for a minute these guys really think some of the things that they are saying. I think they hope they are appealing to the far left wing of their party. But I don't think it's going to work.

BECKEL: Governor, you just said - those of us who oppose the war, I include myself in that, are playing into the hands of those who oppose us. So in other words, you're suggesting that we're aiding and abetting the enemy? Is that what you're saying?

ROMNEY: No, what I'm suggesting is that the comments that Barack Obama made, for instance about Pakistan, saying that we would go into Pakistan without consulting with our ally, that those comments do not help us in Pakistan.

In fact, those people that are enemies and Musharraf respond as you might image, with anger and concern. And our troops. I had a father stand up at a town meeting I held in Colorado Springs and I spoke with him. He has a son in Iraq. He talked with me afterwards and he said, my son is encouraged about the progress we're making, but discouraged when he reads some of the things that politicians are saying.

Look, there is a surge of sacrifice being made by American families right now to support their families in Iraq. We need to have a surge of support by our leaders, by our citizens.

BECKEL: Governor, you're very good at parsing words. I know understand why you're doing as well as you're doing. I don't think that you can play that back and read it any other way than you're suggesting those of us who oppose the war are somehow less of Americans. But let me ask you this question.

ROMNEY: Bob, I am not going to let you say that. Bob, that's not true.

Of course people who oppose the war are great Americans and patriots. I don't say that at all. What I'm saying is Barack Obama's comments were unproductive. And his comments today, that Sean just read, are comments which are counterproductive, do not help our effort, do not support our men and women in the armed forces.

It's something he's got to back away from, of course. I can't help but believe it was a misstatement and he has to have said to himself after it was over, my gosh, did I say that? He's got to apologize for it or at least say it was a misstatement. Look, we all make mistakes and misstatements.


HANNITY: Hang on Bob. All right my friend. We are going to take a break, we'll come back. We're in Dallas tonight for our fourth of five freedom concerts. We're going to continue with Governor Romney.


BECKEL: Welcome back to "Hannity & Colmes." We continue now with former Massachusetts governor and presidential contender Mitt Romney. Governor, you're in for a big night tonight. Are you going to stay around and listen to Sean Hannity sing?

ROMNEY: It is something that I am really anxious to listen to, I must admit. You know, it's a great thing he's doing. You guys deserve a lot of credit for supporting our families and our troops like this.

BECKEL: I couldn't agree with you more, I think he's done a terrific job.

Governor, let's just wrap up this Obama thing if we could for a second. He made a comment yourself and by the way, I agree with you. I think Obama wishes that he had the words back. You made a comment not too long ago that you thought we double the size of Guantanamo. Do you still believe that or do you wish you had some of that back?

ROMNEY: Oh no, I think there are people in this country that say, let's close Guantanamo and I think that's a mistake. I think in fact we should keep Guantanamo. The world is not a place empty of evil people. There are evil people. When Khalid Sheikh Mohammed, the so-called mastermind of 9-11 was captured, he said I'll see you in New York with my lawyers. Instead, he saw GIs and CIA interrogators in Guantanamo and that's as it ought to be. I don't want those people on U.S. soil and claiming certain constitutional rights because they're on U.S. soil. We have a place for these type of people and is Guantanamo and I wouldn't close it down.

BECKEL: Governor, I wanted — followed your work as governor of Massachusetts on health insurance in the state of Massachusetts where you worked with the Democrats and I thought did a phenomenal job getting a plan through that called for everyone to buy health insurance and for those who could not afford it, the state would pay for it.

That was one of the most forward thinking plans I've seen, and yet for some reason, you don't seem to talk about this in front of conservative Republican groups. Is there a reason why you don't take credit for it?

ROMNEY: You must not be going to my meetings, because every single speech I give that I can think of, every one of my — we call them "Ask Mitt Anything" town halls, I talk about my health care plan, which is a way to get people in this country insured without expanding government programs, without expanding Medicaid, but instead helping people get private market-based insurance.

So it's one of the things I'm most proud of. And I hope I get a chance to debate Hillary Clinton on the very topic because when I'm asked what the biggest difference is between my plan and her plan, I'll say that mine got passed.

BECKEL: Well governor, as I matter I do follow you closely, as a matter of fact. I always like to know what the other side is going to be up to, particularly someone who might be the nominee.

HANNITY: That's what he means by the other side now.

BECKEL: You know exactly what I mean by that, Sean. But the one thing you do leave out of your insurance proposals though is the part that I thought was courageous, which was that if you couldn't afford it, the state would pay for it. But you don't make that part of your plan now.

ROMNEY: Well actually, the plan I put forward said no one got free insurance. Everybody could play what they could afford. And so we had a sliding scale and still do, based on your income. And the state will help pay the portion of your premium you can't afford for the poor.

The good news is it costs us less to help people buy their own private insurance than it was costing us giving out free care at hospitals. So I do talk about that. And I'll be giving a speech to the Florida Medical Association describing to them our plan in some detail.

But I insisted that everyone pays something. I didn't want to have anything free. Our legislature overrode that idea and so the people at the very low got it free. I think that's a mistake. I think everyone should pay something.


HANNITY: We are going to show this ad of Hillary Clinton coming up in a little bit here from Iowa. We just don't have enough time because you have to leave in a second here.

But in the ad, she says if you are struggling and a family that's struggling and you don't health care, you are invisible to this president. If you are a single mom and you are trying to find affordable health care so you can go to work, you are invisible to this president. In the ad, she similarly goes on to argue that U.S. troops and Afghanistan are invisible to George W. Bush. How do you respond to an ad like that?

ROMNEY: Well first of all, it's not credible because people in this country know that the president cares very deeply about the American people, whether they agree with him or disagree with him. And they also know he loves our troops, that's been evident. So that's not going to stick.

But the other thing is Hillary Clinton isn't going to be running against George Bush. She is going to be running against me or one of my Republican friends. And if she is running against me and she wants to talk about health care, I'm happy to talk about our plan that got people insured with private insurance.

HANNITY: It seems like — are you pretty convinced that she is the candidate? And do you agree with Karl Rove, who in the Wall Street Journal, in an interview called her a fatally flawed candidate?

ROMNEY: You know, I think all the Democrats are fatally flawed who are running for president. But I do think she is by far the most likely to get the nomination. I think that shifted pretty dramatically in the past couple of weeks because of the missteps by Barack Obama. I think he has on the foreign affairs side has said things that were just not carefully thought through and that have hurt him pretty badly.

HANNITY: Do you like the fact that the Democrats seem to be catering to the extreme left? They go to the Daily Kos convention where they have a very controversial leader. They all want national healthcare. They're all on record wanting higher taxes. They all want out of Iraq before victory, want amnesty at the borders. I do not hear anyone saying that they'd like to drill or build a nuclear plant in America. Are those the five big issues?

ROMNEY: Well, those are the places that they are most comfortable going. They're not uncomfortable on those sites. That's fundamentally what they believe. America is not comfortable with those directions. America wants to see insurance for its citizens, but not a government takeover, not socialized medicine, not Hillary care. America wants to see lower taxes, not higher taxes. It wants to see lower spending and energy independence for this country. But the Democrats don't have the right answers on that front.

HANNITY: How do you explain, for example, when your healthcare plan that you're talking about with Bob here, everybody is mandated — they have to have a private health care policy. And then those that can't afford to pay for it, how did you pay for it?

ROMNEY: Well we found that we were spending about $1.3 billion as the federal government and the state government and others, giving free care out of hospitals.

And we said, you know what? If we take that money we're giving to hospitals and instead say to the poor, which were not all of those who are uninsured, but to the poor, we said to them, hey look, why don't you buy your own private health insurance? We'll help you with your premium. It cost us less to get people insured. It was about $3.5 million less to actually help people buy insurance. We used that extra money to keep a free care pool in place for people who would not be following regulations and increased the Medicaid reimbursement rate for hospitals and so forth.

We spent all that money. But the private market works. You do not want government taking over health care. You don't want the guys who ran the Katrina clean up running our health-care system.

HANNITY: Governor, good to see you, thanks for being here in Dallas, appreciate it. Thanks very much.

ROMNEY: Thanks, Sean.

BECKEL: Governor Romney, thank you very much.

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