This is a rush transcript from "Hannity," February 26, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: And our headline on this Thursday night, it's day number 38 of Obama-nomics which we will define in our top story tonight as unstoppable, uncontrollable, unbridle and unfunded government spending. And that's what the president the American people today as he unveiled his plans for a $3.60 trillion federal budget for fiscal year 2010.

Now, included in this plan, a $634 billion dollar reserve fund to move us down the road towards national health care and up to $750 billion of bailout money for banks, which, if used, would be bigger than TARP 1. And what about the president's pledge of fiscal responsibility and cutting the deficit in half in four years?

Well, next year's deficit will soar to $1.2 trillion. Now as Marc Ambinder at the Atlantic magazine points out, his deficit reductions appear temporary, because after supposedly cutting the deficit to $533 billion by the end of his first term, the baseline deficit projection for 2019, well, it goes back up to over $700 billion.

And, of course, well, how does the president pan on paying for all of this? Tax hikes, tax hikes, and more tax hikes.

And joining us tonight is a man who would have truly had a better plan than this nonsense, former Massachusetts governor, Mitt Romney.

Governor, good to see you.

Video: Watch Sean's interview


HANNITY: $4 trillion, $1.75 trillion deficit. Your initial thoughts? I doubt this would be the Romney plan.

ROMNEY: Well, I'm afraid it is actually dangerous. I don't think people in this country generally understand that we face, not just a short- term economic strain right now with a potential of falling into a more severe recession, but also a risk that if we continue to borrow excessively that the world may decide that the dollar isn't worth very much.

There may be a run on the dollar. We could have a kind of economic collapse which would, which would wipe out the savings of middle class Americans and put us in a very long-term, depressed situation. And as a result of that we've got to be very careful about our spending and — as well as our borrowing, and the idea that Barack Obama, at a time like this, putting aside the stimulus to get the economy going, at a time like he'd be forecasting down the road running up budget deficits of $500 billion.

It's simply dangerous. It's the wrong course for us to take as a nation. We have to rein in the kind of spending, particularly in entitlements that are really have put the country in a very jeopardized position.

HANNITY: You know, I've been very critical of pork but I agree with you that entitlement spending is where the real money is going to be spent, and we're not going to have that money for our children and grandchildren.

What do you make of this aspect, though, Governor, and that is, when he talks about this top 2 percent that he's going to tax, well, that's 80 percent of small business owners in America. 80 percent of — the top 2 percent, that's 80 percent of business people.

How is that going to impact them, and how does that impact jobs?

ROMNEY: Well, I think there's a general misunderstanding on the part of some people in Washington. They presumed that jobs just happened, that the economy just happens, that businesses just grow and thrive on their own, but they have to have an environment where that's possible, and raising taxes on small employers will kill jobs. It will make it more difficult for new businesses to get going.

He's laid out a whole series of things he wants to accomplish, Barack Obama has, but listen to what he said the other night. He said he's going to be responsible or government should be responsible for a child's education from birth until their first job. Is that universal preschool? Is it universal college?

He also said universal service corps.


ROMNEY: He said we're going to have a universal health care plan. These are massively expensive programs the way he's outlined them, and we, frankly, cannot take on these additional costs at a time when our economy is feeling such pain.

HANNITY: One other thing you talked about during the campaign, and now this has now come to fruition, he's going to raise the top marginal tax rates from 35 to over 39.6 percent. He's going to eliminate the Bush tax cuts for the wealthy, so-called wealthy. And on top of this, $634 billion for health care. They're saying it's only a down payment.

Let's talk about the sustainability of that in terms of the sheer numbers of it all.

ROMNEY: Well, it's too much to add to our federal budget, and I know that there are a lot of people across the country that say hey, I'd love it if someone would pay for my child's education, and I'd love it if someone would pay for five years of preschool, that would be nice, but the truth is it's us. The American people are the one who're going to be the asked to pay for these things.

We'd be adding enormous deficits and burdens to our kids and to their kids. It's not just wrong and bad economics. I think it's immoral to place this kind of a burden on future generations.

HANNITY: Let me ask one last question because they're using — and I'll get into with Karl Rove, perhaps, deeper in the next segment, they're using rosy numbers, rosy scenario numbers. What if things go below what they are projecting? How dangerous then does it become?

ROMNEY: Well, I think we've seen over the past multiple years that the forecasts of improving economic circumstances do not always come to pass, and as a result, you could see a $500 billion deficit four years from now become much larger than that.

But look, even $500 billion, a half a trillion is an unthinkable number for us to have to burden future generations with, particularly in good economic times, which we would anticipate four years down the road.

Look, I think the economy is going to get stronger. I'm one of those who believes that the American people are going to start new businesses, we're going to add jobs, and we're going to come out of this. But I don't believe that we're going to be able to be secure economically long term if we so lard up our federal budget that we just shrink the availability of capital for every new business that wants to get started.

HANNITY: All right, Governor, thank you for being with us tonight. We really appreciate it. Thanks very much.

ROMNEY: Thanks, Sean. Good to be with you.

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