This is a rush transcript from "Hannity," May 18, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: A lot of attention is being paid to some Republicans who have yet to throw their hat into the race. It is believed that Minnesota Congresswoman Michele Bachmann and Indiana Governor Mitch Daniels are just weeks if not days away from revealing their intentions for 2012.

And as they weigh the possibility of a run for the White House, there's word that Texas Governor Rick Perry, well, he is also testing the waters.

Now this news comes after both Donald Trump and Mike Huckabee announced that they will not challenge President Obama next year. But one name that is still very much on the radar when it comes to 2012, is that on my next guest. She is former Alaska Governor, FoxNews contributor Sarah Palin.

Governor, welcome back to the program. Thanks for being with us.

SARAH PALIN, FORMER ALASKA GOVERNOR: Thank you Sean, it is my pleasure.

HANNITY: You know, as I was watching the speaker on "Meet the Press" this weekend, former Speaker Gingrich. My thoughts went to you. Because it was a lot of gotcha. And a lot of these things, "In 1993 you said this, today you said -- the other day you said this." I don't know if you had a chance to see the whole interview. But I was just comparing that to 2008. Is there going to be a different standard?

PALIN: There's got to be the preparation on all the candidates' parts for those gotchas. That's what the lamestream media's known for now a days, it's the gotcha trip up questions and you just have to be prepared for it and overcome it.

HANNITY: What did you think about the term right-wing social engineering and then his apology to Paul Ryan, does that put that to rest in your mind?

PALIN: I don't know why politicians feel that they have to apologize for something that they've said just because they've gone through a 24 hour cycle of the lamestream media given them a hard time for something that they said. A politician either believes in what they just said in an interview or they don't believe in what they just said. And if Newt Gingrich believes that it is right-wing social engineering to undo Obamacare and reform Medicare to make sure that we provide a safety net for our seniors who are going to need health care coverage, then, say so. But don't apologize later just because the media has dinged you on what it is that you said.

I do believe that Newt Gingrich is terribly wrong on his assessment of Representative Ryan's plan. It is good fiscally sound and courageous plan. And it's not all just about Medicare, we have to make sure that we are understanding that Ryan's budget is a big difference as opposed to the Obama budget, which of course have has us on the road to bankruptcy. Paul Ryan's plan saved us $1.2 billion every single day over a decade, as compared to Obama's big spending government overreach more indebtedness plan that he's got us on.

HANNITY: I'm not sure if he was apologizing because the media was attacking him as much as he said, because I did interview him Monday, and I talk to him about it. And he said, well, what I'm saying is we need to take that plan and we've got to make sure the American people are onboard, maybe find ways to improve it. But he definitely sees the need and has called for the need to reform Medicare. I mean, that's something that he said for a number of years. And I'm not putting up a defense for him. But if he apologizes because he didn't articulate it the way he wanted to and people are offended by it, is an apology appropriate at that point?

PALIN: No, I'm saying that we should ignore the lamestream leftist media's criticism of what it is that we say in an interview if we believe what it is that we say. Don't let them in a 24 hour news cycle make us change our positions, and it sounded pretty clear to me that Newt Gingrich's position, because he articulated this, was that Paul Ryan's plan would be social engineering, and he didn't like it.

So, I believe that he made the apology because the media dinged him on it. Would he have made the apology otherwise? I don't know. I'm just saying, come on fiscal conservatives, let's stay strong, and principled and not disappoint the electorate so that they have a true choice coming into this election, who would it that they're going to choose to allow to surface to lead this great nation. Don't let the mainstream media dictate what the debate is going to be about.

HANNITY: All right. This is a great thing. I think people apologize for too often. I'm going to agree with you. And I think they're pressured to do it. And I think they do it for expediency. I'm not sure what happened in this case. My take is, is that Paul Ryan is a friend to his, he misspoke, he wanted to explain it. You know, it's like in the Congress, they have the ability to revise and extend their remarks. In the media, you don't have that ability.

But let me give you one example of what I think is gotcha. And where the media I think really, they never ask tough questions I think in 2008 against Barack Obama. And I think these are the types of questions that Republican candidates will face and you if you get in this race.

Here is David Gregory with Newt Gingrich.


DAVID GREGORY: You gave a speech in Georgia with language a lot of people think could be coded racially-tinged language calling the president, first black president a food stamp president.


GREGORY: What did you mean and what was the point?

GINGRICH: That's bizarre, this kind of automatic reference to racism. This is the president of the United States, president of the United States has to be held accountable. Now, the idea that, and what I said is factually true. Forty seven million Americans are on food stamps. One out of every six Americans is on food stamps. And to hide behind the charge of racism, I have never said anything about President Obama which is racist.


HANNITY: And that number is up by millions. How do you respond to that? What advice would you give candidates?

PALIN: Well, talk about racism, that was a racist tinged question from David Gregory. He made it sound like if you're black, you are on food stamps and the president is referring to you as being on food stamps. I think that's racist.

And, you know, enough is enough of this calling out, this racism, this false charges. Obviously, it is done just to end the conversation. Just to distract, divert attention from what the real substance is, and stop the conversation. Here again, enough is enough. Why do we let the press, the media personalities get away with such? Let's call them out on them and let's start concentrating on what the real issue is. The real issue is, we have 40 some million Americans on food stamps, you know, why? Because we don't have a robust economy, allowing the private sector to grow and thrive, and have jobs provided via the private sector because government has overreached, overtaxed and over spent and got us in debt. And there is isn't enough private sector money out there creating jobs.

That needs to be the focus. Not allowing David Gregory to falsely charge Newt Gingrich as being a racist because he's making a statement, a fact about how many people are on food stamps.

HANNITY: You know, it's interesting you say that. Because there was an NBC host that said something to the effect, and I'm paraphrasing that, oh we know that you are not talking about white people when you are referring to food stamps. We know that you are talking about black people, that this is a code. I agree with you. The premise, that's their assumption, that's their bigotry and that's their bias and prejudice.

And interestingly, you know, it seems to me that the media that ignored a guy, part of a group that bombed the Pentagon, the capital, New York City Police headquarters -- one question about Bill Ayers, and he got away with "just a guy in the neighborhood," sat on boards with, give speeches with.

This is a big issue here about how the Republicans will be treated versus how President Obama was in 2008. And I think it is much harder for the Republicans.

So, is there something that they should do when they find themselves in that moment?

PALIN: Well, I think to start with, we ignore some of these reporters and their requests for us to comment and be interviewed. We know going into what they are going to do to us, to a conservative. So, why participate in their game?

Instead, candidates need to get their message out via the news social media, be a fair and balanced reporters who will just allow the facts to get out there. Don't even participate in that goofy game that has been played now for too many years with the leftist lamestream media trying to twist the candidates' words and intent and content of their statements.

HANNITY: All right. Governor, stay right there. We're going to have more with Governor Palin, is she thinking about to run for the presidency?


HANNITY: And welcome back to "Hannity." Continuing to join us tonight, former Alaska Governor, Fox News contributor Sarah Palin.

Governor, a lot of people, last time I spoke to you, I was asking, you know, where are you in this process of making your decision? And you said you wanted to assess the field. The field change quite a bit. Where are you today?

PALIN: Still assessing the field because I know it is still going to change, the line-up. People are going to come and go before that legal deadline is imposed on us to have to make the decision. So, I'm still not ready to make an announcement.

HANNITY: Yes. Where are you in your thought process if you could bring us inside a little bit? I'm not looking to reveal anything, but where are you in your thought process?

PALIN: Still seriously considering it, and praying about it. And talking about it with family. Because of course it is a monumental leap for a family to put themselves out there again in the limelight and be ready for the scrutiny that ensues in a campaign. So, still talking about it, and assessing, yes, the field, looking for others who are ready to go rogue and fight against the machine on both sides of the aisle in order to get the economy back on the right track and do the things that the private sector needs done to implement some solutions to all the problems that America is facing right now. I want to make sure that we have a candidate out there with Tea Party principles, understanding that we are taxed enough already. Our job creators cannot afford to be taxed anymore. And we'll do the right things that so many Tea Party patriots have already been articulating and cheering on and looking for candidates to embrace.

HANNITY: All right. You know the candidates, if we added, Mitch Daniels, Jon Huntsman, Michele Bachmann, whose names are -- maybe Rick Perry. You know all of these candidates, you know, all of these politicians pretty well. Do you see one, two or three that, you know, you like and that you would really want to hear more from and that you could support?

PALIN: I want to hear more from all of them, Sean. And every one of us not just potential candidates, everyone of us as human beings, we bring strengths and weaknesses to the table. So, you don't want to assess all of that.

But, you know, I think one of my problems in this whole process is, I don't live for that game of the punditcy, of the opining and speculating on who is doing what, and I don't live for that. What I live for is fighting for family and faith and freedom in this country. And I get kind of frustrated watching the political process because I'm not a real fan of politicians.

So, I get kind of frustrated watching the political process as people, you know, line up and already -- and so early on, you know, year in a half time away still, so early on, trying to position themselves when there is still a lot of work to be done on each one of our parts to finally see that line-up solidified.

HANNITY: You know, I feel the same way as you with this caveat. And governor, it's that, I think that this is a turning point in American history. I think the economy is that bad. There is no metric, there's no index, there is no indicators that tells me the economy is going to get better. I believe these policies are failing. I think the country can do a lot better. And so, I want the person who believes in limited government, greater freedom, lower taxes, less regulation, strong national defense. And I want an opportunity to access them, I want to see them respond under fire. So, I think the process ultimately will make whoever the eventual candidate is, that much stronger. So, in that sense, I think it is healthy.

PALIN: Yes, that and in this process of assessing, once the lineup is set and the debates begin. In the meantime Sean, we need to look at every one of this potential candidates and declared candidates records. See if they've had opportunity to veto overspending in their city or their state and some governing body. See if they've seized the opportunity to save other people's money and not squander it. See if they've had opportunity to go to the mat in protecting second amendment rights and every constitutional rights. See if they have in their own personal lives lived a physically and socially conservative life and really walked the walk not just talk the talk, if that is really important to you as the one doing the assessing of these candidates. We have to do our homework. Don't let the media define who these candidates are. Let us, as constituents, as voters, as potential candidates, we need to do our homework.

HANNITY: I think you've very well said. And one of the things I want to do in this program is, give these candidates a forum where they can answer, they can explain their record, we can examine it. And also, not really play gotcha, because although, you know, but ask the tough questions as well when necessary.

Let me ask you this question. You were very critical of Nancy Pelosi's district and the speaker. Here she wants this big Obamacare bill. She gets the bill. Twenty percent of the waivers in April come from her district. Harry Reid, a lot of waivers in Nevada. And I'm thinking, wait a minute, if it is so bad and your constituents want out, why am I stuck in, you know, being beholding to this bill and everybody else? Your reaction.

PALIN: Yes. This is a bit of that crony corporatism, maybe on a smaller scale than what some of us are concerned about with the bigger picture in America, but this is an example of that. It is a corrupt system, this whole Obamacare fiasco that we are seeing with the waivers coming down. And our bureaucrats and our politicians in D.C. can't even give us consistent explanation as to why some companies are given waivers and some are not. And in the words of Dennis Miller today who said on Fox, in reference to something that Nancy Pelosi said, what she is saying is a tight-faced lie. We cannot believe what it is that she tells us now in terms of explaining why these waivers were given in her district. I think it is favoritism, I think it is unfair and I think the little guy ultimately gets hurt with a system like this and the waivers of Obamacare. You will hear Michele Malkin give some awesome explanation as to what it is coming down the pike with Obamacare waivers.

HANNITY: You just gave us a great promo for later in the program. Governor, you are a pro, and I appreciate the plug.

Governor, it's always good to see you. And we're going to continue to monitor your process and we do appreciate your insight, as always, thanks for being with us.

PALIN: Thank you as always.

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