This is a rush transcript from "Hannity," February 15, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The future of the president's health care bill is looking dire. Not only does it face continuing legal challenges, but lawmakers are not backing down either.

Now the latest to voice her fervent opposition to this government takeover South Carolina Governor Nikki Haley. In her first month as governor, Nikki Haley is already proving herself to be a force to be reckoned with. But will she able to stop Obamacare from coming to South Carolina?

And now joining us is the governor of the great state South Carolina, Nikki Haley. Governor, welcome back.

GOVERNOR NIKKI HALEY, R-S.C.: Hey, Sean. It's great to be with you again.

HANNITY: All right, you are sort of taking a dual approach. Your first choice is to say, all right, Mr. President, we don't like it in South Carolina, allow us to opt-out and this is something that you brought to the president's attention. What has come from it since then?

HALEY: Well, you know, first of all, let me make it very clear. We are an equal opportunity opponent in South Carolina to any sort of Obamacare whatsoever. We are doing that on three fronts. First of all, I am supporting the attorney general's decision and certainly thankful and grateful for the decision that came back last week from Florida. I think it spoke volumes.

Secondly, we have supported Senator DeMint's bill, which basically repeals the bill altogether and then this past week, I had a press conference with Senator Graham who has issued an opt-out bill, which would allow any state to opt-out.

You know, after my conversation with the president asking him to repeal, he said no. I asked if we could opt-out. He said that we could, but he had strings attached. What Senator Graham's bill is allowing us to do is allowing every state to decide what we need to do. The president's conversation has been about health care services. What we need to be talking about in our state is health. How do we get the most health for the least amount of money?

South Carolina is not like any other state in the country. The issues that drive us on health care is not that we don't have good quality health care, it's that we have unemployment and poverty. We need to handle South Carolina in the way we know that is best not, the way the president knows it is best. Right now, I have 10.7 percent unemployment. I need to increase jobs. I don't need to be increasing Medicaid.

HANNITY: Right, but when you -- when you brought this to the president's attention and you did so personally, he said I'll consider it if you do a, b, c, d, e and f and basically adopt his health care on your own. So that is not viable option for you is it?

HALEY: Well, we are still looking at it. Look, I hired one of the best health and human service directors in the country. Tony Keck and I are working very closely together to try and find every option we can to take care of South Carolinians.

And so when the president said, we want you to consider, you know, that we will consider an opt-out if you have a state health exchange, if you deal with preexisting conditions, if you allow pooling. You know, we are taking every opportunity to look at all of those avenues and we will do that.

But what is best is for us is for us not to have any strings, for us to be allowed to do this without the president's input. But yes, we will continue to do everything we can, one to oppose this bill and two to improve the health for the people of South Carolina on our terms, not on the president's.

HANNITY: All right, so the president proposes his budget and one of the things that I think is going to happen is governors like yourself, Christie in New Jersey, Jindal in Louisiana, other governors around the country.

By the way, even New York Governor Cuomo is saying he's not going to raise taxes, we're going to get our budget in balance and he's trying to entice business to stay. So for the federal government since he's been president has accumulated nearly $5 trillion in debt. He's got these new entitlements, how is that going to impact South Carolina?

HALEY: You know, I mean, he's killing us one day at a time and I will tell you that what South Carolina is going to do is say yes we are going to handle our financial situation. But if this is the help that President Obama is going to give us, no thanks. We don't need it.

What we've seen him do is grow entitlements more in this budget than we've seen since the 60s. What we have seen him do is talk about jobs, but continue to press on government in a way we can't allow our businesses to grow jobs. We actually need him to just get out of the way. We need him to understand we don't need --

HANNITY: This president doesn't know how to --

HALEY: We don't need more of these issues. We need to have opportunities for our small businesses to thrive.

HANNITY: This president doesn't know how to get out of the way. I mean, when I spoke to you after you had this conversation with the president, he gave off as I said his litany of things you need to do to accomplish the task of opting out, it seemed impossible to me. Except basically saying adopt what everything I want then we'll consider it. I didn't take his proposal serious. I felt like he was giving you the brush- off.

HALEY: You know, what we need to see at this time in our country is people willing to say that they've made a mistake. I think the people spoke loud and clear in the last election. President Obama needs to admit this is a terrible mistake for our states. He needs say let's regroup, let's allow them to opt-out, if they don't want to participate, they shouldn't. If they do want to participate, fine --

HANNITY: What are the odds of this?

HALEY: Or let's get rid of it together and start all over. For South Carolina, we'll tell you this is not helping us. This is actually going to cost 175,000 of our employees that are already covered by employers to drop off and go on the Medicaid rolls.

It is going to cost us $5 billion over the next 10 years. That's not helping South Carolina. If that's the kind of help he's going to give us, no thanks.

HANNITY: Governor, if he admits he made a mistake on health care, I will eat my script on television, for charity.

HALEY: If he admits he made a mistake on health care, I'll stand right next to him and thank him.

HANNITY: All right, Governor Haley. Thanks for being with us. Appreciate it.

HALEY: Thank you so much. Always a pleasure.

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