This is a rush transcript from "Hannity," August 2, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The DNC appears to have come up with a strategy for the November elections: demonizing the Tea Party Movement and trying to convince the public that it is no different from the GOP. At least that's what the DNC latest ad suggests.

Apparently, the powers that be at the DNC weren't watching the GOP Senate primary in Kentucky too closely. Now, in that race, Tea Party favorite Rand Paul beat out Trey Grayson, the candidate backed by the Republican establishment.

And the most recent polls show that Paul has a considerable lead over his Democratic challenger, Jack Conway. The latest survey, USA Poll has Paul leading by an eight-point margin, 51-43.

And joining me now with reaction to the DNC's latest attempt to fool the American people is GOP Senate candidate Rand Paul is back.

Rand, welcome back.

SENATE NOMINEE RAND PAUL, R-KY.: Good to be with you, Sean.

HANNITY: All right. Your reaction to the ad.

PAUL: Well, I do have a target on my back but they let me put a coat over it today so you can't see the target on the television. But, yes, I think they've seen the success of the Tea Party. They want to drag the Tea Party down and they want to drag me down.

But the thing is, it's not working, because as much as they want this to be something it's not or to make me be something that I'm not, the raceis really about the debt, it's about out of control spending. And they cannot make the debate about something else no matter what names they call me.

HANNITY: You know, I've never seen this in my lifetime, and that is a party — look, talk radio is attacked, Fox News is attacked, politicians are attacked. But I never — I've never witnessed an attack by a political party against the American people. Be it town hall attendees or Tea Party Movement members. I mean, there seems to be one attack after another.

I mean, what do you think the strategy is here?

PAUL: Well, I think the thing is, is the reason they do it is, they want to paint us and they say, oh, that's extreme. And I keep saying, what is extreme? Is a $2 trillion deficit, $400 billion dollar in interest? What they are doing in Washington is extreme.

The things we talk about — a balanced budget amendment, term limits, read the bills — these are mainstream ideas. And what scares them is, conservative Democrats and independents, if you poll them, 70 percent to 80 percent of them say, for goodness' sakes, yes, they need rules that force them to balance a budget because they don't seem to be trustworthy enough to do it.

HANNITY: And don't Republicans — and this is a question I'm asking every candidate that comes on — don't they need to take — read the bill, eliminate earmarks, put it on paper, and give the American people an opportunity to see their promises and then hold them accountable? Would that be a good strategy?

PAUL: Absolutely. You know, in '94, we've had the Contract with America. And I've been promoting a Tea Party platform that has some things that are very popular. Balanced budget amendment, term limits, read the bills, point out to where bills are — have constitutional authority, where they get justification from the Constitution. I think those are very popular measures. You know, having a waiting period.

They tell me, you need to wait to buy a gun. I tell them, they need to wait before they pass legislation, read the bills.

HANNITY: Pretty good line. I will give you that.

All right. So, you were not supported by the establishment. Now, you're the candidate and you won by a massive margin. Where is the establishment with you now?

PAUL: Well, I tell people, primaries are about who gets to lead the party in which direction the party goes. I consider in the primary we did divide Republicans. But in general, we're bringing them together.

And I would say, all the Republicans across Kentucky and across the country are helping us on a day-to-day basis.


PAUL: And some of our supporters say, oh, you're joining the establishment. But what I say is, no, the establishment has seen that we won by opposing the bank bailout, by opposing overspending on the debt —

HANNITY: Last question —

PAUL: — and those people are supporting our platform. And so, I see it as a great sign of victory for us.

HANNITY: Are you concerned at all you may run into conflict? That some Republicans don't get the mood of why the Tea Party Movement is so passionate and popular now?

PAUL: No. I think it's just an amazing momentum. I think they're recognizing that. Even if they weren't part of the Tea Party Movement, people in Washington are recognizing it.

You see the YouTube that's out today of a Tea Partier asking Congressman Stark a question? It is just fabulous. He finally says that, oh, you know what, there are no constitutional limits for government. We can do whatever we want through the power to tax.

And that's kind of what's going on with this bill now — or with the legal case against the health care bill. The Democrats and Obama are simply arguing that the power to tax has no limits, and they can do whatever they want.


PAUL: But interestingly, the judge today said we have a case. And it will be interesting to see how this case comes out through the Supreme Court.

HANNITY: All right. Rand Paul, 92 days to go. We're going to follow the race as we have been very closely. I appreciate you being with us and giving us an update. Thanks very much.

PAUL: Thank you, Sean.

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