This is a rush transcript from "Hannity," September 28, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: And tonight in "Your America," the undercover video investigation into ACORN continues to spell trouble for that organization. Now earlier today, Bank of America announced it has suspended its dealings with ACORN. And now questions are being raised about a top White House adviser's connection to the group.

Now the director of the White House Office of Political Affairs, Patrick Gaspard, is said to be closely affiliated with ACORN and according to the American Spectator, he previously worked as the political director for none other than Bertha Lewis, who is now the chief organizer of ACORN.

Sounds like ACORN has somebody on the inside of the White House. Now there's a real comforting thought.

Joining me now with reaction to all of this, a rare in-studio appearance, Indiana Congressman Mike Pence.

Video: Watch Sean's interview

Congressman, what brings you to New York? Good to see you.

CONGRESSMAN MIKE PENCE, R-IND.: Thanks, Sean. Just up here visiting some friends and excited to be in the studio with you.

HANNITY: Well, we appreciate it. First of all, you know, Obama also — we forget this part of the story. He gave $800,000 for the Get Out the Vote effort by ACORN. He was the lawyer for ACORN.

PENCE: Right.

HANNITY: You know, he wouldn't commit for cutting off funding for ACORN, even the House and Senate did both those things. You think they'll still try to backdoor money for them?

PENCE: Well, I think that's a genuine concern that many of us have particularly after the president about a week ago said that he wasn't aware that ACORN was receiving a large amount of federal money and given.

HANNITY: Tens of millions.

PENCE: And given the president's background in organization supported by ACORN that was a little bit hard to take, to say the least. Look the American people recognize this is a discredited organization. It is, as House Republicans produced in our report last summer, it is what amounts in many respects to a criminal conspiracy using federal tax dollars to engage in direct election hearing and other activities, and it needs to be defunded.

I was encouraged to even see Barney Frank, one of the historic defenders of ACORN, last week say they don't deserve another penny. And I think.

HANNITY: Well, they've gotten tens of millions. They earmarked the stimulus that the president signed, how much were they scheduled there, because I read anywhere between $4 and $8.5 billion.

PENCE: Right. But it's also important to remember, Barney Frank's departure from ACORN is important. Back when I was chairman of the House conservative caucus, Barney Frank was trying to get, I think, back in 2006 a piece of what was called the affordable housing fund.

He was trying to get a big chunk of that slush fund which would have been literally hundreds of millions of dollars that could have flowed into ACORN. So this has been one of ACORN's strongest allies.


PENCE: For him to say it's time to cut off the funding, I think suggests.

HANNITY: And Al Franken, too.

PENCE: The American people have had it.

HANNITY: Let me move on to another topic because you're viewed as one of the real up-and-coming conservative leaders in the House. Let's just step back a little bit. Leading into the 2006, 2008 elections there were conservatives like me that felt the Republican Party had abandoned some of their conservative values. Was that true?

PENCE: I think it was true. I think we didn't just lose our majority in 2006. I think we lost our way. We walked away from the principles of limited government, fiscal discipline and reform that minted our national governing majority in 1980 and in 1994, and the American people walked away from us.

HANNITY: Right. Did it seem in 2009 to be a political shift coming? I was talking about this a little bit with Dick Morris. I think Corzine, the Democratic governor of New Jersey, will lose. I think Bob McDonald, the Republican candidate in Virginia, is going to win. And then we're going to have this battle over health care.

And I think — and couple that with the stimulus and all the things Obama has done — weakening our defenses — it creates an opportunity, the people that will look at the Republican Party.

Now I have my ideas and I'll get to them in a second. What do you think the Republicans should do if they want to regain control of the House and get rid of Nancy Pelosi?

PENCE: The first thing we need to do is — you know, Winston Churchill said the purpose of the opposition is to oppose every time principle demands, and you've seen Republicans since the first of this year, every single House Republican voted against the so-called stimulus bill. Every single House Republican voted against the president's budget.

Almost all of us oppose the cap-and-trade bill, and I think every single House Republican is going to vote against this health care bill. So I think, first, we've got to provide that opposition to these government takeovers, to the borrowing and spending and bailout that's driving people to town hall meetings and drove over a million people here to Washington, D.C.

But, secondly, after you oppose you do have to propose. And I will assure you people go to GOP.gov, they can see the solutions that have been developed on all the issues I just mentioned, but come next year, just watch. House Republicans are going to steal a playbook from the past and offer the American people a bright line contrast of agendas with the big government liberalism of this administration.

HANNITY: I think the Republicans ought to go back to what got them into power and go back to the Reagan conservative roots.

PENCE: You bet. You bet.

HANNITY: And I've been — for example, there are people out there saying there's not a dime's worth of difference between the two parties. You keep hearing that. A pox on all their houses, all that sort of thing. And in some instances they're right, I believe.

I think some Republicans don't get it. Olympia Snowe, Susan Collins, until he left, Arlen Specter. I felt like they were liberal Republicans that — you know, were not conservatives. Is that fair? They were Republicans more than conservatives.

PENCE: Absolutely. And there's no question that our party — you know, we became under the rubric of compassionate conservatism, we became big government Republicans in the early part of this decade.

HANNITY: All right.

PENCE: But I want to tell you, I wan to tell your millions of viewers, look at those votes on the stimulus, look at the opposition we put up, the health care, cap and trade, the budget, Republicans are coming back to their roots of fiscal discipline and reform.

HANNITY: See, that's why this argument that there's not a lot of difference, I think on the stimulus, on cap-and-tax, on the budget, on defense, on health care, I think there are vast differences.

PENCE: You're right.

HANNITY: I have been calling for Republicans to go back to a contract. Here's my contract: The party of national defense and national security, you're not going to negotiate without preconditions with Ahmadinejad, the Holocaust denier.

You're going to keep our country safe and win the war in Iraq and Afghanistan. Fiscal responsibility, balance budgets, energy independence, secure our borders, free market solutions for health care and education.

Sign, put your name on a dotted line and promise to the American people you'll do those Reagan conservative things. Would that win?

PENCE: Well, I believe it would and I believe it will. You know, Ronald Reagan after the — you know, after his defeat in the primary in `76 he stood up in front of that convention, Sean, and said the same thing you just said. He said we cannot paint with pastels. We need to paint with bold colors.

HANNITY: 1975, C-PAC, no pale pastels but bold colors.

PENCE: Yes, the point is. Republicans have to offer the American people a choice, not an echo next year, and I believe we will. But right now, I want to tell you, you said something a little bit earlier. You said that we'd see these elections in Virginia that might go the Republicans' way, and New Jersey the same, and then health care.

Stay tuned, Sean. The word we're getting on Capitol Hill is that Democrats would like to send this massive government takeover of health care to the president's desk even before those elections. And Americans who are looking in tonight ought to be aware now is not the time to come off the accelerator, we need to stay engaged.

HANNITY: They had the lowest poll numbers they've had.

PENCE: Right.

HANNITY: And so — and they're also talking about the nuclear option. They're going to ram it down the American people's throat, even though it has the lowest approval rating to date.

PENCE: That's why we're pushing right now a 72-hour waiting period on all legislation. We've actually got bipartisan support in the House for changing the House rules right now to give members of Congress, the American people, members of the media, 72 hours to review major legislation.

We've got to stop the Democrats from ramming through a government takeover the way they did cap-and-trade and the stimulus.

HANNITY: Good to see you in New York. Thanks for being with us. Appreciate it. Congressman Mike Pence.

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