This is a rush transcript from "Hannity," March 3, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: President Barack Obama's views on the Tea Party here in America have finally been exposed. Stunning excerpts from a brand new book reveal the president's belief that racism was in fact a deep seated motivation of the movement.

Now, the brutally honest, be it absurd assessment can be found in "Family of Freedom: Presidents and African-Americans in the White House." Now according to the book, at a private White House dinner in May of 2010, the president explained to his guests that quote, "race was probably a key component in the rising opposition to his presidency from conservatives, especially right-wing activists in the anti-incumbent Tea Party Movement."

At the same function against argued that the Tea Party has simply angry that a black man is president. Now rather than dispute that notion, President Obama agreed and reportedly called racism the quote, "subterranean agenda of the movement."

So without a shred of evidence, the president has no problem labeling the Tea Party as racist. But in recent years, he's been ultimately quick to forgive racially insensitive remarks made by some on the left.

Now remember when Joe Biden, his vice president said this?


VICE PRESIDENT JOE BIDEN: I mean, you've got the first -- sort of -- mainstream African-American who is articulate and bright and clean and a nice-looking guy. I mean, that's a story book.


HANNITY: Well, not long after that statement was made, all was forgiven. And when it was revealed that Senator Harry Reid once referred to Mr. Obama as a quote, "light-skinned African-American," with quote, "no Negro dialect," well, it was forgive and forget yet again.

But when it comes to fiscal conservatives who happened to disagree with this president, well, he thinks they are fueled by racism. If it isn't racism, well, it wasn't so insulting, well, it would be laughable.

Here with analysis, Fox News political analyst, the one and only Juan Williams. Mr. Williams, welcome back, sir.

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST: Mr. Hannity, good to be with you, my friend.

HANNITY: I don't know why you are smiling, I'm suspicious. All right. You hear what he's saying here. There's no evidence at all. The vast majority of the people were peaceful, they cleaned up after themselves. They don't like higher taxes. They don't like the direction of the country, the debt, the deficit. Don't Americans deserve better than a president saying this either publicly or privately?

WILLIAMS: Well, look, I've written in the Wall Street Journal, I think it is a mistake to say that the Tea Party Movement is a racist movement. I think the Tea Party plugs in to mainstream American concerned about deficit spending, about big government, intrusive government, people who are angry about the health care bill. I happen to disagree with them, but that anger is legitimate and it's a political policy difference.

But I will say this Sean, you know what, the president said this was a subterranean issue. In other words, it was deep seated. And I think that when you hear about some of the signs, some of the things that have been said, the Congress people who said that the people were spitting at them, calling them names.

HANNITY: Wait a minute, there was no evidence of that. In fairness, $100,000 was offered. There were a ton of TV cameras, a ton of microphones, Andrew Breitbart offered the money. Nobody produced the tape.

WILLIAMS: But you know that there were signs that made him look like he was the joker, that had him as a communist.

HANNITY: The joker?

WILLIAMS: Oh, I mean, I think it was mocking and I think it was a very insulting to the president of the United States.

HANNITY: You mean sort of like the unions saying that Scott Walker, the governor of Wisconsin is Hitler, he's Mubarak, he's Mussolini, he's a Nazi, sort of like that?

WILLIAMS: Yes, and I think that all of this is offensive. But, you know, given the racial sensitivities in our history, then the fact that Obama is the first black president, I think that people are going to be paying attention when something like that happens. It's like the other day when this guy at, you know, meeting with his congressman says, who is going to be the first to shoot Obama? And the congressman doesn't criticize that comment. I mean, boy, that just scares me, Sean.

HANNITY: And it is on both sides. There was this Wisconsin assemblywoman who said, you know, you're going to die, after she had a vote on this particular bill that Scott Walker produced.

But let me take it a step further because in the 2008 campaign, remember 2008, Michelle Obama said, "America is a downright mean country" in 2008. The president made his infamous comments about people in Pennsylvania and a lot of other small towns in the Midwest, "their jobs are gone and it is not surprising that they get bitter, they cling to their guns, they cling into their religion, they have antipathy towards people who aren't like them or anti-immigrant sentiments," et cetera. I mean, wasn't that revealing? If he really thinks that about people in Pennsylvania and the Midwest and his wife thinks America is a downright mean country, what are we to make of this?

WILLIAMS: Well, you know, I think that in some cases, what they are saying is here that they think that there's a lot of anger in Middle American. Of course, if you look at the polls, the polls show that that is exactly true. Most Americans think the country is headed in the wrong direction. But in the book that we are talking about tonight, Obama specifically is talking about things like people being upset that government bails out the Wall Street, Wall Street is not very popular and average working class America say, "How do they bailout Wall Street --

HANNITY: No no, that's not what they're saying.

WILLIAMS: -- you don't bail out me?" And then they said when the president is black, "Wait a minute, why is he helping those guys not me?" Maybe they feel a little distance from him.

HANNITY: Wait a minute.

WILLIAMS: I don't think race -- we would agree Sean race is an issue with the first black president.

HANNITY: Wait. But we've got to be very clear, what the book is saying is that he is suggesting at this dinner that race was probably a key component to the rising opposition. When somebody at this dinner suggested that people want to take back their country, that their real motivation was to stair up anger because of anxiety of having an African-American president, that's not what happened in this election. You know, I remember you on election night, you were deeply moved because of the historic nature of his election. America didn't factor in as many had predicted the fact that he's an African-American.

WILLIAMS: Well, I think it factored in. But I think people overcame it and I think people transcended it in that moment and said this was someone that they recognized was the best person to lead America at that time. And I think, you know, to this moment, it has been an incredible moment for us as Americans to share but, you know, that doesn't mean that Obama should not be subjected to legitimate criticism when he says outrageous things or when he engages in hypocrisy and I take my hat off.

So, but I don't doubt that race is part of this, do you, Sean? I mean, when you hear about the birther movement or that he's supposed to be a socialist or a Muslim. I think gee, this guys -- some people just don't accept that he is the president.

HANNITY: Well, there's other things we can add to this. The black values system that he said gave him a lot of support when he was on the road, fortified him as he traveled the country. You add "clinging to guns and religion." You add, you know, Michelle Obama's comments.

Well, look, I mean this, look, I don't know what to make of it. I don't have the answer. But I am troubled by what is emerging as a pattern, is that fair?

WILLIAMS: Yes. And I think that, you know, going back to the Michelle Obama thing about first time she is proud to be an American. I mean, it is enough to make you wonder. But, you know, what? I mean, to me, the larger point is that he's the first black president, in fact we've got two black Republicans, we've got a record number of black Republicans come out, I think in response to the fact that a black man had been elected on the Democratic side as president. You had Michael Steele first black head of the Republican National Committee. I think race is part of the story. You and I wouldn't disagree with that.

But where -- I think we may differ slightly, Sean, is that, you know what? Sometimes there are people and I think especially older seniors, who have difficulty accepting this guy. And especially if they have political differences with him, just want to make him out to be weird and strange.

HANNITY: Especially because the Republican Party was needed and counted on by LBJ to pass the Civil Rights Acts and the Voting Rights Act, I don't like the caricature by the left that conservatives are racist, because I think it is false, misleading and frankly, its characters assassination.

WILLIAMS: It is. It's offensive.

HANNITY: And look, I want to quote, one last thing before I go, when have you ever heard me quote Hillary Clinton on this program? Have you ever heard that? In a positive way?

She said about the guns and religion comment, she said, "The people I know don't cling to religion because they are bitter, they embrace faith not because they are materially poor, but because they are spiritually rich. People don't need a president who looks down on them, they need a president who stands up for them." I thought she nailed it.

WILLIAMS: I think that's right. And you know what? I mean, he is right about there being anger. But he should have been lifting us as a people not in any way suggesting that you have to look down on people or that they are lost in their anger.

HANNITY: And I'll forgive you for some of your liberal views.

WILLIAMS: And I'm going to salute you for being positive about our secretary of state. Oh my goodness.

HANNITY: Can you imagine that? I mean, they're going to be popping champagne corks in Chappaqua this weekend.

WILLIAMS: Oh my gosh!

HANNITY: All right. Juan Williams, good to see you. Thanks for being with us.

WILLIAMS: You're welcome, Sean. Take care.

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