This is a rush transcript from "Hannity," April 5, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The countdown to the shutdown continues. And with just over three days until the clock runs out, it does not appear that lawmakers are anywhere near striking a deal.

Now, enter President Obama who had some wise words for everybody involved.


PRESIDENT BARACK OBAMA: I think what they are looking from me is the same they are looking from Speaker Boehner and Harry Reid and everybody else. And that is that we act like grown-ups.


HANNITY: Oh, that's interesting, I wasn't aware that it was grown up behavior to spend tons of money that you don't have on this president's watch.

The federal budget deficit has skyrocketed to a projected -- this year alone $1.65 trillion. Speaking of which, here's what the chairman of "The Anointed One's" own deficit commission had to say about the economic situation facing the United States of America.


ERSKINE BOWLES, DEFICIT COMMISSION CO-CHAIR: I think we face the most predictable, economic crisis in history. A lot of us sitting in this room didn't see this last crisis as it came upon us. But this one is really easy to see. This debt and these deficits, that we are incurring on an annual basis are like a cancer. And they are truly going to destroy this country from within, unless we have the common sense to do something about it.


HANNITY: Now, the GOP has a solution for all of this. House Budget Committee Chairman Paul Ryan unveiled all of this earlier today.


REP. PAUL RYAN, R-WISC., HOUSE BUDGET COMMITTEE CHAIRMAN: Here's what would happen under our proposed budget. What we're calling the path to prosperity. As you can see, we won't come anywhere close to the tipping point. And we'll pay off the debt over time. So, how we'll we do it? We will cut spending.


HANNITY: And joining me now with analysis is the man himself, the Chairman of the House Budget Committee, Wisconsin Congressman Paul Ryan. Congressman, thank you for taking time out, I guess it was a busy day for you.

RYAN: It has been, but good to be with you, Sean.

HANNITY: All right. Let's go over your budget. Because I think the American people really need to hear it from you, because this is what you have spent months of your time now putting together, $6.2 trillion in spending cuts relative to the president's budget, $5.8 trillion in spending cuts relative to the CBO's current policy baseline. Explain what this means.

RYAN: Well, that means the president is proposing $400 billion in additional spending above current law, so we are taking $5.8 trillion above where the law is right now -- below where the law is, and the president wants to go $400 billion above that. So, when you're makers against the Obama plan, we are cutting $6.2 trillion.

HANNITY: All right. So, the president is actually increasing spending.

RYAN: Yes. Oh yes. Sean --

HANNITY: Go ahead.

RYAN: He doubles the debt after his term in office. And triples it by the end of his budget. He sends our debt on an upward trajectory that is completely unsustainable.


RYAN: And you do that by spending more money. You do that by having government continues to spend money we don't have.

HANNITY: All right. Now, the president presented his budget, he didn't deal with entitlements, your budget does. You deal with Medicare, Medicaid, Social Security. And the Democrats, I don't even think Nancy Pelosi even bothered to read it. But she came out within moments and demagogued it and tried to, you know, played the fear card already, which I'm sure it's just the beginning. Why don't you explain to seniors, why don't you explain to people what happens if you don't deal with these entitlements and what it means if we do deal with it, based on your plan?

RYAN: Well, these entitlements are the big drivers of our debt. And if we take care of these entitlements now by reforming them now, then you can do it on a gradual way on our own terms. That means no cuts to seniors. That means, people 55 and above see no change in their benefits whatsoever. And these changes faze in for people 54 and below. But if you don't get this under control, if you don't get the debt under control, then you have a debt crisis. And what happens Sean in a debt crisis, is just like what is happening in Europe. Cuts occur immediately to everybody.

So, for seniors citizens who have organized their lives around these programs, who, you know, had promises made to them about Social Security and Medicare and things like that, then, they get hurt when we don't fix this problem.

So, our point is this, let's get to prosperity. Let's gets jobs created. And let's get these things under control. So we can preempt a debt crisis, prevent it from happening, and that means, preempt bitter austerity like that what you see in Europe.

Now, the president's plan is defund, it's to duck, it's a kick the can down the road and do nothing about this. That means you are accelerating our march toward a debt crisis. And that means in debt crisis, you do crisis management that means you do cuts to everybody. We want to prevent that from happening.

HANNITY: All right. So, we have $14 trillion in debt. You know, Timothy Geithner is out there suggesting that, you know, we have to raise the debt ceiling in just a short period of time.

RYAN: Right.

HANNITY: What does it mean for people that aren't 55? Like myself and you I think younger than me, Congressman. But what does it mean for people that, because I don't even view like the term entitlement as much as I do benefit. What does it mean for younger people, and to what extent do you have to change what the current policy is?

RYAN: So, the conversation typically involves Medicare. And so, what we've proposed for 54 and below, for people in Medicare, is that Medicare converts into a system that works exactly like what I as a member of Congress and all federal employees have. We get a list of plans to choose from. They compete against each other for our benefit and Medicare pays that plan. It works like the prescription drug benefit works for current seniors today. It looks like Medicare advantage. It's exactly like the system I and member of Congress have.

Doing it that way, breaking down the government monopoly, injecting choice and competition in the Medicare, is what the actuaries tell us, the trustees of Medicare tell us helps save the system and prevent bankruptcy.

HANNITY: Right. How -- we saw what happened last week with Chuck Schumer. And we know that Howard Dean is rooting for a government shutdown. This is in reaction to the budget they never passed last year, $61 billion that the Republicans want in cuts. How are you going to deal with $6.2 trillion, not billion -- and if they view $61 billion as extreme, I assume that every old person is going to be scared to death that you want them to die or eat cat food or dog food by the time this is all over.

RYAN: They've actually said that, they've actually said, they've used the cat food line on me all the time. So, yes, the demagoguery is coming. The distortions are going to come. You know how we do it, Sean? We go with the truth. We tell people the facts. We tell people the truth. And I think the American people are ready for an honest conversation about the true fiscal problems in this country. We cannot allow this demagoguery to deter us from doing what is necessary to save the country for this debt bomb that we're having. We've got to get the debt under control. That means spending has to get under control. We got to get this economy growing. And that means, we don't tax our way out with this problem. We cut spending.

HANNITY: All right. Last question, this Friday at midnight, this government is scheduled to shutdown. Things did not go well when John Boehner and others were summoned to the White House earlier today. My question is, I believe that the Republicans need to stand by their promise. They promised that they would stand for this. I don't think this was something that should compromise on because, if they can get the Republicans to back off here, then they are dealing with your real cuts, $6.2 trillion, I think the Democrats will try and whole Republicans hostage.

What do you expect from Friday and what strategy would you use?

RYAN: Well, our goal was to get spending down to 2008 levels. Now, the 61 we tried to get a year's worth of 2008 level spending, the 33 is 2008 levels for the rest of this year. So, we can debate about whether or not we get to 2008 levels.

For me, what matters most is we wipe out those two years of Obama spending increases that occurred when Nancy Pelosi ran this place. You got to get rid of those spending increases. Then, it comes down to riders, I want to bank the spending cuts and then I want to go from billions, talking about trillions and get real spending control in this place.

HANNITY: All right. And you do defund Obamacare in your bill?

RYAN: We defund and repeal Obamacare.

HANNITY: All right. Congressman Paul Ryan, we'll be hopefully checking in with you in days, and weeks and months ahead. Thanks for being with us.

RYAN: Thank you, Sean.

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