This is a rush transcript from "Hannity," September 29, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Tonight, the campaigns of the two Republican frontrunners go head-to-head right here on "Hannity." Now, for months it appeared that former Massachusetts Governor Mitt Romney was on the fast-track to the GOP nomination. And although he remains at the top of most of the national polls, the entrance of Texas Governor Rick Perry into the race has change the dynamic of the battle for the White House.

And exactly, one week ago today at the Fox News-Google presidential debate, both men traded jabs as they outlined their visions for America. Let's take a look.


GOV. RICK PERRY, R-TEXAS: It's not the first time that Mitt has been wrong on some issues before.

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    MITT ROMNEY, R-FORMER GOVERNOR OF MASSACHUSETTS: It's fine for you to retreat from your own words in your own book, but please don't try and make retreat from the words that I wrote in my book.

    PERRY: There's one person on this stage that is for Obama's Race to the Top, and that is Governor Romney.

    ROMNEY: Nice try.

    ROMNEY: I don't think he knows what he's talking in that regard.

    PERRY: I think Americans just don't know sometimes which Mitt Romney they're dealing with.

    ROMNEY: I'll use the same term again, nice try.


    HANNITY: All right. Ring the bell. Because joining me now in studio are from -- the senior advisers from both of these campaigns, Eric Fehrnstrom from team Romney and Ray Sullivan is here from team Perry. Guys, good to see you.

    RAY SULLIVAN, PERRY SENIOR ADVISER: Nice to see you, Sean.

    HANNITY: All right. It's interesting that the e-mail that I get about the debates, people are worried, you know, we've broken Reagan's 11th commandment, they're going at each other, in particular the Romney and Perry campaigns. What's your reaction to that? Because I actually think it's healthy because this is tee-ball compared to what's coming. That's my take.

    ERIC FEHRNSTROM, ROMNEY SENIOR ADVISER: Sean, fundamentally this race is going to be about Barack Obama and his failure to lead on economy. He's created for us a soap kitchen economy. And Mitt Romney is in this race because he believes he has the experience that will create jobs and lead a turnaround in this country. But that being said, we are in a competitive primary. Mitt Romney recognizes that and we're not going to let go unchallenged, baseless attacks from our opponents from whatever direction they may come from.

    SULLIVAN: This campaign is about jobs, which is why Governor Perry jumped in. The leading job creator in the country, 40 percent of the new jobs since June of '09 were created in Texas. We have our eye on President Obama, too. He's been a disaster for job creation for the middle class.

    But primaries are about stirring it up, about letting the voters decide, and campaigning hard in the early primary states. Iowa, New Hampshire, South Carolina, Florida. And we're in for the long haul and excited about it.

    HANNITY: Yes. I'm telling people, I think this is tee-ball. I mean, a billion dollars from President Obama and the Democrats, I think whoever gets this nomination is going to be brutalized.

    SULLIVAN: And Obama's got nothing else to run on. The economy is a disaster. His policies have been a disaster. He's going to be on the attack, 24/7.

    HANNITY: I agree on that. Look, even David Axelrod said recently, this is going to be a titanic struggle. So, in many ways, this might be the election for president, the nomination.

    FEHRNSTROM: Well, when I think of Barack Obama, I too think of the titanic but in different ways than David Axelrod. Look, this president has had three years to turn around a bad economy. He didn't inherit it, but he has made it harder for Americans to get jobs, to get back to work. Let me give you just a quick example. He was in Colorado this week. Back in 2008, during the campaign, he went to the football stadium there and he gave a speech. And in that speech, he said, that the way we measure progress in this country is by how many people have a job. Well, you know what? Three years later you could fill the 70,000 seats in that stadium with the number people in Colorado who have lost their job.

    He's been a disaster for this country, and it's time to make a change in the White House. We think we need somebody in there who has experience in the private economy. That's Mitt Romney. He's made his career in the private sector.

    HANNITY: All right. We'll work our way backwards, because it seems that certain issues have become front and center during the debate, during the last debate, the big issue was about immigration. Governor Perry, his position on illegal immigrants, in-state tuition breaks, and there was a pretty feisty exchange both with Governor Romney and with Senator Santorum on this. It is probably, I would say, not the most conservative position. I interviewed the governor the day after the debate. He really didn't back down from it. He stands by the position, although he has backed away from the comment, you don't have a heart.

    SULLIVAN: We have a 1,200-mile border with Mexico and Texas, the federal government has been a disaster at securing that border. Texas has had to step up. Four hundred million dollars, Texas rangers, our law enforcement officers have been shot across that river. No one is more committed to border security than Governor Perry. In our state, we have to, as all states do, educate any kid that shows up. When it comes to college, any child in Texas, who has been a resident of our state for three years, who graduates from high school, pays in-state tuition. We make that -- those same in-state tuition benefits available to some residents to our borders states, New Mexico, Oklahoma, Arkansas, Louisiana. That is our policy our legislature passed with only four dissenting votes. But when it comes to border security, no one has stepped up more, no one has been more vocal, no one has a better plan for securing that border with troops than Governor Perry.

    FEHRNSTROM: Yes. Let me just say this, Sean. When Mitt Romney was governor, the Democrats and the legislature sent him a bill to provide an in-state tuition benefit to illegal immigrants. Mitt Romney vetoed that bill. The reason he vetoed that bill is not because he's against immigration. We all welcome legal immigrants to this country, but he feels it's important to observe the rule of law. And Rick Perry took a different path. He was sent that same bill, he signed it into law. And this is one of those magnets that Mitt Romney talks about that we need to shut off if we're going to get serious about securing the border, and stopping the flow of illegal immigration.

    SULLIVAN: We've had to deal with that federal failure. Texas has been on the frontlines of the failure of the federal government to secure our borders.

    HANNITY: I agree with that. But let me get to the heart of this though. And I guess there are two issues here. One is, OK, if somebody is in the country illegally, should they have access to the school system, but are we rewarding illegal behavior when you get an in-state tuition break versus, say, somebody that lives in Pennsylvania that wants to go to the University of Texas, they don't get that same advantage. Can you understand why people would be angry about it?

    SULLIVAN: Yes, but 175 Texas legislators 10 years ago decided that if a child -- and we're talking about kids. They have to be in the state for three years before they graduate from high school. They have to -- so that qualifies them for residency, just like any other child in our state. And in the case of the folks you're talking about, they have to be working on citizenship. That's a policy that Texas legislature put in place.

    FEHRNSTROM: You make a good point, Sean. I have a 17-year-old son. He's a senior in Massachusetts and he's now looking at colleges and applying. If he were to apply to the University of Texas and get accepted there, the cost for him to attend would be $32,000 a year. And yet an illegal immigrant under Rick Perry's liberal immigration policies would be able to attend that same school, would be able to attend that same school for $9,000. There's something fundamentall unfair about that.

    SULLIVAN: Here's the flaw in that argument. The kids that we're talking about -- your son has not a resident of Texas, he's not lived in Texas for three years, he has not graduated from a Texas high school, and is not working on his citizenship.

    FEHRNSTROM: He's a citizen of the United States.

    SULLIVAN: But he has to live in the state of Texas for three years, and all Texas residents are treated the same. We make the same offers to some residents of our border states.

    FEHRNSTROM: I think this is precisely the problem. I don't think you can treat illegal immigrants the same as U.S. citizens. And that is the flaw in Rick Perry's defense of his very liberal immigration policies.

    SULLIVAN: There's nothing liberal about securing the border, about cleaning up after the federal failure, and about taking care of all the kids in our state, every resident of our state is treated the same. And we're going to get that border secured. Troops, predator drones, strategic fencing. We know how to do it. We've done it in Texas.

    HANNITY: Guys, stay right there. We have ads from both of you that we're going to play that you've been running. We'll talk about health care, talk about Social Security, some of the other issues. Round two of our debate between the Romney and Perry camps.


    HANNITY: As we continue tonight on "Hannity," we're joined live in studio by the senior advisers for the campaigns of Mitt Romney and Governor Perry. From team Romney, it's Eric Fehrnstrom. And here from team Perry, it's Ray Sullivan. Did I get that right?

    FEHRNSTROM: Yes, you did.

    HANNITY: Yes. Just checking. All right. You guys have negative -- well, I don't want to say -- you have ads about each other. Why don't we start with Governor Perry's ad about Mitt Romney. Here it goes.


    GRAPHIC: Mitt Romney on Race to the Top. - Florida Town Hall in Miami. Sept 21, 2011.

    ROMNEY: I think Secretary Duncan has done some good things. He is the current Secretary of Education. He, for instance, has a program called Race to the Top which encourages schools to have more choice, more testing of kids, more evaluation of teachers. Those are things I think make, make some sense.

    GRAPHIC: The next day on national TV.

    PERRY: There is one person on this stage that is for Obama's Race to the Top and that is Governor Romney. He said so just this last week. Being in favor of the Obama Race to the Top, that is not conservative.

    BRET BAIER, FOX NEWS ANCHOR: Did Governor Perry say something that wasn't true?

    ROMNEY: I'm not sure exactly what he's saying. I don't support any particular program that he's describing.

    GRAPHIC: "Words have meaning." - Mitt Romney. Paid for by RickPerry.Org, Inc.

    ROMNEY: Race to the Top which encourages schools to have more choice, more testing of kids, more evaluation of teachers, those are things I think make some sense.


    HANNITY: Your reaction?

    FEHRNSTROM: Well, what the Perry campaign left out of that clip at the beginning when the governor was talking about Race to the Top is that he believes in state and local control of education. But they just snipped that right off. It makes me think that maybe they've hired Edward Scissorhands as a researcher there.

    HANNITY: Is that any difference than Obama's Race to the top? Is there a distinction?

    FEHRNSTROM: Well, here's the thing with Governor Romney in education. He believes very deeply in high standards. He believes in accountability for our teachers, he believes for merit pay for our best teachers. He believes for more choice for our parents, but he believes that decisions about the development of those standards should be left to state and local control. Now, of course there's a role for the federal government to play in encouraging states to move down, and develop these types of programs, but in terms of a common core of standards, one national curriculum for the entire country, Mitt Romney is absolutely opposed to that.

    SULLIVAN: Here's a problem, those clips were one day apart. He praised Obama's education secretary and Race to the Top one day. And the next day.

    HANNITY: I want to be fair here. Didn't he say Rick Scott -- he was talking about the governor of Florida, right?

    SULLIVAN: He was talking about.

    HANNITY: Sorry, Florida education person.

    SULLIVAN: No, he was talking about the Obama Education secretary. One day before the debate, I don't know where that came from. This is a pattern of the problem.

    HANNITY: The first person that is going to be happiest with this is Bret Baier, our friend from "Special Report," now that he's made the ads. I'm kidding but go ahead.

    SULLIVAN: A problem and a pattern of Governor Romney since he ran, tried to run for the left in some cases of Ted Kennedy in 1994, run to the right of Mike Huckabee four years ago. This is someone who has changed positions a lot. In the book, which has been edited between the first and second versions, he said the stimulus would accelerate the economic recovery, in the second version of the book that's out. In the first version of the book, he said that Romneycare is a good model for the nation. That was taken out. This is someone who's been on all sides of all issues, and it's really been a problem that has been dogging this campaign.

    FEHRNSTROM: Can I just say, let me respond. There has been an effort by the Perry campaign over the last few days to manufacture phony charges against Mitt Romney. I just showed you or explained to you how they did with respect, to Race to the Top, they've done it on some of the other issues, you just heard Ray speak about it.

    Look, I think candidates for president have an obligation not to deliberately misrepresent the facts, and that's what the Perry campaign is doing, but it's understandable because they're feeling the heat on illegal immigration.

    HANNITY: We ask both of you for your latest campaign, that was the ad you gave us. Here is the latest ad that Governor Romney is running in the campaign. Let's roll the tape.


    UNIDENTIFIED WOMAN: Who supports Governor Perry's decision to give in-state tuition to illegal immigrants?

    GRAPHIC: Barack Obama. Nancy Pelosi. Harry Reid. Even…

    VICENTE FOX, FORMER PERSIDENT OF MEXICO: I want to publicly recognize Governor Perry and the state of Texas by having taken that step forward when you decided to give access to Mexican migrants to universities in Texas.

    PERRY: If you say that we should not educate children who have come in our state for no other reason that they've been brought there, by no fault of their own, I don't think you have a heart.


    HANNITY: All right. This is the first time that.

    FEHRNSTROM: This is the first time that's aired.

    HANNITY: Yes, you're reaction.

    SULLIVAN: Awful close, Sean, to crossing line. And it's fundamentally wrong again.

    HANNITY: What part of the ad is wrong?

    SULLIVAN: The whole context of it. Perry has done more to secure that border than anyone in the country. Four hundred million state dollars, Texas rangers, boots on the ground, support for local law enforcement. Our law enforcement officers in our state, not feds, have been shot at across that river. We deal with this issue every day. Fight this issue every day, and have a solid plan to secure that border.

    FEHRNSTROM: Yes. Let me just say, Sean, while Rick Perry's immigration policies may be supported by liberal Democrats, like Harry Reid and Nancy Pelosi and Barack Obama, they are also cheered in foreign capitals like Mexico City. And I talked earlier about how in-state tuition for illegals acts as a magnet to bring people over the border into our country. And there are more than 16,000 illegal immigrants in the public college system in Texas. That's more than the enrollment of the University of Miami.

    SULLIVAN: That is the federal government's fault. Our states, the states across the country are dealing with the federal government's failure. That's why that border needs to be secured. That's why Texas has stepped up to secure and fight criminal activity at the border.

    HANNITY: You know, I honestly, I wanted to make sure I gave you both ample time here. We didn't hit health care, we didn't hit Social Security, but I'll tell you what, we'll continue these debates with the different campaigns, we'd love to have you both come back and we appreciate you both being with us. Thank you.

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