This is a rush transcript from "Hannity," August 20, 2012. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST OF "HANNITY": And tonight after two months in hiding, President Barack Obama finally found the courage to take questions from members of the White House press corps. Now, during a surprise appearance this afternoon, in the briefing room, he was asked a wide range of questions from foreign policy to campaign-related matters. Among the topics that were covered, whether or not Mitt Romney should release more of his tax returns, and here is what the anointed one had to say.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: When it comes to releasing taxes, that's a precedent that was set decades ago. I think people want to know that, you know, everybody's been playing by the same rules, including people who are seeking the highest office in the land. This is not an entitlement, being president of the United States. This is a privilege.

(END VIDEO CLIP)

HANNITY: And I still want to know why he hung out with Bill Ayers. Now, the president didn't end there. His answer continued as his response was so hypocritical and bungled that reporters, well, they couldn't hold back their laughter.

(BEGIN VIDEO CLIP)

OBAMA: The American people have assumed that if you want to be president of the United States that your life's an open book when it comes to things like your finances. You know, I'm not asking to, you know, disclose every detail of, you know, his -- his medical records, although we normally do that as well, but --

(LAUGHTER)

-- You know, I mean, this -- this -- this isn't sort of overly personal here, guys. This is -- this is pretty standard stuff. I don't -- and I don't think we're being mean.

HANNITY: Maybe your college transcripts, Mr. President? An open book? Now, it may be time for the president to take a look in the mirror, and, by the way, that laughter was triggered because as most Americans know, the president's medical records are open to the public.

Now, meanwhile today, another hot topic at the impromptu press conference was whether or not that Obama supporters are engaging in gutter politics by suggesting that the GOP hopeful is in fact a felon, a murderer and worse. We'll going to have more on that with Dick Morris later tonight. Plus, shocking video from the campaign trail, a left-wing protester spitting in the face of a Romney supporter. But first, we head to the great state of Texas to get analysis, Fox News contributor, former Bush adviser, the architect Karl Rove. Sir, welcome back.

KARL ROVE, FOX NEWS CONTRIBUTOR: Thank you, Sean. Thanks for having me.

HANNITY: All right. My favorite moment though at the press conference, you know, the president, "We didn't accuse Mitt Romney of being a felon." Really? I think we can prove otherwise.

ROVE: Really?

HANNITY: But hang on. Let's roll the tape.

ROVE: Yes.

(BEGIN VIDEO CLIP)

OBAMA: I'm not sure all those characterizations that you laid out there were accurate. For example, nobody accused Mr. Romney of being a felon.

STEPHANIE CUTTER, OBAMA DEPUTY CAMPAIGN MANAGER: Either Mitt Romney through his own words and his own signature was misrepresenting his position at Bain to the SEC, which is a felony, or he was misrepresenting his position at Bain to the American people to avoid responsibility for some of the consequences of his investments.

(END VIDEO CLIP)

HANNITY: He's actually denying these things. It's provably false, Karl.

ROVE: Sean, who are you going to believe? You or your lying ears and eyes? Come on, man. It was the president saying that nobody accused Mitt Romney of being a felon. How dare you suggest otherwise?

HANNITY: Yes, how dare I suggest otherwise? All right. Let's go to Newsweek magazine --

ROVE: Yes. Yes. Hey, you left out Bob Bauer who also was formerly the White House counsel, now back again the counsel with the Obama campaign, who joined less than five weeks ago with Stephanie Cutter and also alleging that Mitt Romney was a felon, and somehow or another, he escaped the president's recollection as well.

HANNITY: What did you think? We'll throw up Newsweek magazine. Now, this is Newsweek. Even they say hit the road, Barack, why we must have a new president. What do you make of that?

ROVE: Well, first of all, the piece is by Neal Ferguson who is a brilliant economist, a wonderful writer, a contributor to Newsweek. And my suspicion is, is that everybody else at Newsweek from Andrew Sullivan to you name it had indigestion at the piece, but it's brilliantly written, expertly done, and well worth reading. I mean, everybody ought to pick up at least this one copy of Newsweek for whom I used to write, it really because it's a great article.

HANNITY: All right. We had some polls that came out last week on the economy; none of them were good for President Obama. We have some new polls out today, swing state voters. Number one, they're asked and this is a Gallup poll, whether or not they're better off than they were in 2008. Fifty six percent say no, 40 percent say yes. And then Rasmussen poll, Americans already think that Paul Ryan is more qualified than Joe Biden to be president. Reaction?

ROVE: Yes. Well, first of all, remember, this Gallup swing state poll, every one of those swing states was carried by President Obama last time around. We're not talking being Utahs, and Texas, Alabamas, Wyomings. We're talking about battleground states, every one of which was carried by President Obama. This is his fundamental problem. One recent poll, this is my favorite number, one recent poll, 46 percent said his economic policies will never improve the economy. That's pretty harsh. Will never improve the economy.

That was CBS/New York Times. Pretty liberal poll. But if you take a look, two-thirds of the American people believe roughly two-thirds believe that either his policies have not helped the country or have actually hurt the economic recovery. That's a bad place to be if you're the incumbent president running for re-election and the Gallup swing state poll is confirmation of that. The second thing is, about Romney, Romney's pick of Paul Ryan being more qualified than Joe Biden, I mean, first of all, that's not a high bar to jump over, particularly as we've seen in the last week. I think this is going to be my favorite line in the campaign, Joe Biden trying to do a southern bigot. "They're going to put you all back in chains!" I mean, please. But yes -- but Paul Ryan is an incredibly able individual, who has brought new energy to the Republican ticket. It is a sign of the confidence of Mitt Romney and an insight into what he's going to make, not only about this campaign, but his presidency about to pick this able Wisconsin budget chief.

HANNITY: All right. So, the president uses this press conference to condemn, you know, a relatively obscure congressman, one of very few people have heard from, except for probably in the state of Missouri was running for the Senate, he uses that. But he's silent on Bill Maher, he's silent on the attack Joe Soptic accusing Romney of murder, he's silent on taking Maher's money, he's silent on, you know, the felon comment, denies it even happens, he's silent on all of these vicious attacks against, you know, the war on women, and dogs and the felon, everything across the board.

And I'm just wondering, why doesn't the media, will the media ever hold this guy's feet to the fire as he does these hard-hitting interviews on "Entertainment Tonight"?

ROVE: Wait a minute. Wait a minute. Wait a minute. Watch that news conference. Twenty two minutes. You got the CBS reporter asks a pretty tough question, which Obama sidesteps about the conduct of the campaign, and Jake Tapper has an incisive question about Afghanistan, but then bollixes it up -- by asking about the economy at the same time. But look, this is a Stockholm syndrome. What's the first question?

The AP reporter says, would you like the opportunity to denounce this Republican congressman as an extremist and while you're at it lump him in with Romney and Ryan and attack them, too, Mr. President? We're so delighted to see you; we haven't seen you for so long. I mean, it's like he said, kidnapping victim who, you know, who sees his captor emerge, and offers him a bottle of water and expresses his profuse thanks. I mean, it was embarrassing. Please!

(TALKING OVER EACH OTHER)

HANNITY: But listen, I'm only telling you the facts. The reality is the media in this country is more concerned about a few freshmen skinny-dipping Republicans and they're more concerned about an obscure Republican who Mitt Romney condemned.

ROVE: Right.

HANNITY: What a difference between President Obama. Whenever he's faced with a Sister Souljah moment he fails the test.

ROVE: And once again today, he's a classic, I didn't have anything to do with that ad, he said. Now, remember this, remember there's footage of Obama saying, well look, if there was a super PAC, and it was headed by Robert Gibbs, and you know, and I said, I couldn't call him up and tell him not to do that kind of stuff, you'd all be laughing at me. Well, remember Priorities USA is headed by a deputy to Robert Gibbs.

So, maybe the president didn't have any ability to influence a deputy of Robert Gibbs, but he could influence Robert Gibbs. I mean, please, the president of the United States should have condemned that ad. You know what, there's a version of it on his Web site right now, a version on his Web site of that steelworker blaming Mitt Romney for the death of his wife. And the president has done nothing to clean up this campaign. And you know why? It's the only way he can win, and he knows it, is by tarnishing Mitt Romney's reputation and going after him in a deeply personal and really repulsive way.

HANNITY: All right. Karl Rove, great to see you, sir. Thanks for being with us.

ROVE: Thanks for having me, Sean.

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