This is a rush transcript from "Hannity," August 27, 2012. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The convention did commence today with RNC Chairman Reince Priebus gaveling in the proceedings, and immediately declaring a recess until tomorrow. But before the attendees cleared it out, the chairman he did zero in on much of what the GOP message will be this week.


REINCE PRIEBUS, RNC CHAIRMAN: For this convention we also want to draw your attention to the unprecedented fiscal recklessness of the Obama administration as depicted by the real time national debt clock shown here in the arena. For this convention, we've actually installed a second national debt clock that will log the amount of debt that accrues during the course of this convention.


HANNITY: And here with me now to preview the convention and the days ahead is Kentucky Senator Rand Paul. Sir, how are you?

SEN. RAND PAUL , R-KY.: Hi, Sean. Good to be with you.

HANNITY: You were one of the people that was supposed to be speaking today.

PAUL: Yes. We're worried I wasn't going to get my speech, but I heard out, I actually -- I heard that I actually going to speak on Wednesday night, which is even better than Monday night. So, we're excited about it.

HANNITY: You know, this campaign to me has been defined by absolutely the smear, the slander, all the attacks. I mean, even as, you know, the country's praying for New Orleans, the Gulf Coast, the panhandle of Florida, you know, here we got former Michigan Governor Granholm tweeting out Isaac was sent by God. You know, Samuel Jackson, he sends out a tweet, you know, and others. I mean, it seems nothing is off limits this year. Your thoughts?

PAUL: Well, it seems like they have a sense of humor when they're the ones providing the humor, but when it comes back at them they don't. You know, Mitt Romney makes a joke and Chris Matthews jumps all over this. And you know, I just thought it made for bad television. You know, when you saw Chris Matthews and Reince Priebus this morning, he's like, Reince Priebus finally says, oh, you're going to go on with your monologue for another five minutes? There's no discussion, no question.

HANNITY: You know, let me go on and play a little bit of this. Because we'll going to get to this later in the program, but you brought it up, and this was Reince Priebus, and he was going at it -- this, by the way, in front of Tom Brokaw, you know, somebody who tried to build up the NBC brand for a long time. Let's roll this tape.


CHUCK TODD, NBC NEWS CHIEF WHITE HOUSE CORRESPONDENT: They're folks with the Romney campaign who think, boy, Romney can't catch a break, ever since he named Paul Ryan, got a little bit of momentum after the Ryan pick, and then he's disrupted by two storms, one a political storm in Todd Akin, which we just brought up, but now an actual storm. And when you think as this storm moves to and closer to Louisiana, the specter, the sort of shadow of Bush and Katrina does hang over this convention.


HANNITY: All right. But that was his case, that wasn't -- we'll show it in a second. But everything is political. Romney, he's a felon. No evidence to back it up. He's a tax cheat. He's responsible for a woman's cancer.

PAUL: Well, you know, when 12 million people are out of work, another 8 million people have given up on work, you can't really talk about your record, you really can't talk about the economy, you can't talk about how the deficit's going through the roof, getting rid across $16 trillion in debt, you have to talk about something else.

HANNITY: I understand that you and your dad had a big rally, 10,000, 15,000 people showed up. This was a unity really. And that is to work, the Pauls will work within the Republican Party. Explain.

PAUL: Right. And that's part of my message and my message will be on Wednesday. But I think a big part of sort of the libertarian/Republican or the Ron Paul Republicans, is that I think they can help the Republican Party. There's many places in New England as well as California where we're not winning statewide races. It's very difficult for Republicans to win. So, I think embracing, and bringing these liberty-minded Constitution-minded people and making them an integral part of the party is a way we might start winning races where we're not winning races.

HANNITY: Interesting thing. Romney said, Bernanke's gone. Even talk at this convention of the possibility of going back to the gold standard, something that I would expect to hear from either you or your dad.

PAUL: We're really excited about the legacy and influence my dad has had, not only in the party, but on the platform. For example, audit the Fed, my dad's bill that he's been working on for years passed the House, every Republican voted for it, and 100 Democrats. Now we just need Harry Reid to let us have a vote.


PAUL: If Harry Reid lets us have a vote, it's now part of the platform.


PAUL: Governor Romney has come out in support of audit the Fed. So, I think we've had a big influence on the platform.

HANNITY: So, you think -- in other words, you think that a lot of the libertarian ideas have been brought into the platform. Are you happy so far? Even Phyllis Schlafly said, it was probably the best platform she had seen in a long time. A lot of conservatives so far pretty happy with it, least 95 percent. Freedom Works is another.

PAUL: Yes. I have a bill that says for drones to do surveillance over the countryside, you should have to have a warrant. This is a very libertarian kind of idea. We got that in the platform. We got in the platform that war should be declared by Congress. The president is the commander in chief. The Constitution, though, says war should be declared by Congress. And we've reemphasized it in the platform.

HANNITY: I agree with you. That's to me is a big deal as well. President Bush got the authorization for the use of force. All right.

We got this with Reince Priebus and Chris Matthews. And I think we've got to take note of how the media has handled this campaign heretofore, and has not called out, especially the president, and how it's so different from 2008. Let's roll this tape.


CHRIS MATTHEWS, MSNBC HOST: That cheap shot about, I don't have a problem with my birth certificate, was awful. It is an embarrassment to your party to play that card. This stuff about getting rid of the work requirement for welfare is dishonest, everyone has pointed out that it's dishonest. And you are playing that little ethnic card there. You can play your games and giggle about it, but the fact is, your side is playing that card.

You start talking about work requirements, you know what game you're playing, everybody knows what game you're playing. It's a race card.


And this thing about birthers -- yes, if your name's Romney, you were well born, you went to prep school, you can brag about it. And this guy, he's got an African name, he's got to live with it.


HANNITY: All right. Let's go to this charge of the race card, because this has come up, a truth team member in Virginia, we have you know, they're going to put you all back in chains. Bill Clinton even suggested the race card was used against him in 2008.

PAUL: Yes. I think if anything, this really -- when President Obama won, showed that the country was well beyond race. I think most of the dialog and the debate has been very good. It's been a debate that has nothing to do with race. And I think, we want to judge President Obama simply on his policies.


PAUL: His policies have failed the country, we're drowning in a sea of debt from what he's piled on the country.

HANNITY: How -- do you see a path to victory for somebody said he'd cut the deficit in half, five trillion in debt, guy that is created negative, hundreds of thousands of jobs lost. Do you see a path to victory at all?

PAUL: I think even more important than that is that people worried about, they are afraid. I mean, their businesses are afraid of what's coming next out of Washington. You can't have a successful recovery. Everybody says, this is the most tepid recovery we've had. We're not creating jobs, you have to create millions of jobs. And it's bad policy, but it's also a rhetoric coming from the president and from the White House that says, you know, we want to punish business, we want to punish those who are successful. You didn't build that. You know, all of that rhetoric coming out I think is too much. I don't think he can overcome it. That's why I think we're going to win.

HANNITY: It's so different than Obama in 2008 and today. And it's stark in comparison. Hope, lofty rhetoric, change, and now it's all negativity.

PAUL: Because it's difficult to run on the record, you know, with high unemployment, growth, the economy's not growing. And it's really this whole thing of dividing America, one man against another man.

HANNITY: Rich versus poor, old versus young. The race card has been played on their side.

PAUL: And the bottom-line is it doesn't work. For example, they tried to tax rich people and go after their yachts. The person who lost their job is the guy making $50,000 a year making their yachts. The worker loses.

HANNITY: Senator, good to see you.

PAUL: Thanks, Sean.

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