This is a rush transcript from "Hannity," July 19, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Now throughout the great debt debate, one GOP senator has been particularly outspoken about making the most of the situation, arguing that we should restructure our federal finances, balance the budget and reduce the deficit by making massive spending cuts and limiting big government all before touching the debt ceiling.

Now Pennsylvania Senator Pat Toomey has also publicly insisted that threats of a default are nothing more than a Democratic scare tactic. And he went head-to-head with former DNC Chair Howard Dean on this issue yesterday. Let's take a look.


HOWARD DEAN, FORMER DNC CHAIR: If the worst comes to worst on August 2nd, I think what is going to happen if we are not just going to pay Social Security, and Medicare and some of these other bills.

SEN. PAT TOOMEY, R-PA.: We are going to pay Social Security. In fact, they probably have a statutory obligation to pay Social Security. There's enough revenue to pay interest on our debt, Social Security, Medicare, Medicaid, defense contractors, and active duty military and have a little bit of money left over.

DEAN: I think the president is behind what I just said. That's exactly what he wants...

TOOMEY: No, he's not.

DEAN: Yes, he wants to get to a balanced budget. He knows he can't do in a single year. And he believes that everybody ought to sacrifice and I think that's a fact.

TOOMEY: Howard, the House is going to vote on a bill that gets there over 10 years and the president dismissed it out of hand last week.

This administration is not interested in getting the spending problem under control and I don't know how much time we have to do that.


HANNITY: And joining me now is the man himself, Pennsylvania Senator Pat Toomey, who's also a member of the Senate Budget Committee. Senator, welcome back.

TOOMEY: Hey, Sean. Thanks for having me.

HANNITY: All right. This is important. And I don't like to use strong language when we are talking about the president of the United States. But, you know, Howard Dean is lying. President Obama is lying to seniors in this country and trying to use them as political pawns. We take in $200 billion a month. August that means, we can pay for all the things you said, Medicare, Medicaid, Social Security, the military and the interest on the debt, is that all correct?

TOOMEY: That's a fact. We can pay those things. And I'm quite sure if we don't raise the debt limit by August 2nd, that we would pay those things. And so, it has been very irresponsible of the administration to imply and threaten that we are going to default on our debt, the seniors are not going to get their checks. It's a scare tactic meant to intimidate Republicans into giving them the debt limit increase with no spending cuts and no changes to this broken process we have. We shouldn't fall for it.

HANNITY: Yes. This is frustrating to me. Because I think we would have to expect the president of the United States to tell the American people the truth. And what he's saying is just factually untrue.

TOOMEY: It is untrue. The facts are what they are. This is not just me who crunched these numbers. There are left of center Think Tanks that have done this analysis. And by the way, they want us to raise the debt limit. So, it is not as though they have ulterior motives.

The fact is, I want us to reach a deal before we get there. And Sean, that's why I'm excited about the vote tonight in the House. They are going to pass a bill that puts us on a path to a balanced budget. The president would get the debt limit increase he wants. And all we're asking for him is join us on putting our federal budget on the path to balance. Don't have to get there overnight. But how controversial, how crazy an idea is it to balance the budget?

HANNITY: It's not.

All right. I'm angry and I mean angry at some of your colleagues in the Senate. And I'm frustrated. Today, I think the country should be focused on this one bill.

TOOMEY: Right.

HANNITY: And I think the Senate ought to be focused on this bill. But unfortunately, we've got everybody doing their little side bills. So, the president was able to divert the country's attention today and race into the Washington -- before the Washington Press Corp, and talk about, hang on, we got a "Gang of Six."


HANNITY: And it is frustrating to me. Because that's not the bill that I think senators and congressmen were hired to pass or the McConnell bill for that matter. Why would they be negotiating side deals, when they ought to be saying to the president, sign this bill? Approve this bill. This is the best bill for the country. This also deals with fundamentals, the structural problems we have.

TOOMEY: No, there is no bill that solves the problems that our country faces, that is on the table. The various proposals, whether it is Senator McConnell or the "Gang of Six," I think those folks have good intentions, they're trying to make the best of a bad situation. But the only thing that actually puts us on a sustainable fiscal path is the bill the House is actually going to pass tonight. So, why would we ignore that fact? Why wouldn't we build on that and ask the president, are you really willing to plunge the nation into the chaos that you predict all because you are that opposed to balancing the budget?

HANNITY: Can I ask why these Republicans aren't better chess players? Can I ask why they are not more strategic than this? They literally handed the president on the day they should be focused on this bill, as you point out. You know, now he gets to, you know, highlight these other two bills which don't even really exist.

TOOMEY: Yes. Well, and Sean, actually, this has been a problem for some time now. For some time, we sort of acquiesce to the series of closed door backroom negotiations with the president and various leaders in Congress in the good faith hope that they actually, the president and the administration actually wanted to cut spending. But let's face it. There's never been any evidence that they have any interest in really cutting spending and shrinking government. This administration has been all about the opposite. So, we need the American people to say, Mr. President, we're really insisting now.

You know, the last time we had a Democratic president, he agreed that we ought to balance the budget and working with the Republican Congress, they actually did it. So why is it so unreasonable now?

HANNITY: It's not. It seems that the Republicans are very foolish. Seem to be negotiating against themselves, which is bizarre to me and you know, more importantly, the president -- he had a vote on his budget. His budget was what, $46 trillion and it didn't pass, not one Democrat supported it.

I guess, where do we go from here? This bill is going to the Senate. What are you predict is going to happen there? Are any Democrats support this? Will all the Republicans stay on board and if not, shouldn't the president get the blame?

TOOMEY: Well, I think this is going to pass the House with some Democratic votes, maybe not a lot, but I think they'll be some. It will be a bipartisan vote to raise the debt limit provided we go on a path to balance the budget.

I think we'll have, if not every last Republican senator, we'll have the vast majority and then we have to turn and ask the Democrats and the president, why are you so opposed to a balanced budget?

We are not suggesting that we achieve it overnight, but even over the course of several years, you can't work with us on that? I think when the American people understand that we are willing to raise the debt limit provided we get on the path to a balanced budget, I think they are going make some demands of the president.

This is the game changer for us, a big win tonight in the House and then let's put some pressure on Senate Democrats and the president.

HANNITY: All right, so can I put you on record saying you will not support the McConnell bill? You will not support the "Gang of Six" as it's currently being negotiated? That you only on record for "Cut, Cap and Balance"?

TOOMEY: Certainly in their current forms I can't support those other bills. I do support -- I'm a co-sponsor of "Cut, Cap and Balance."

HANNITY: All right, thanks, Senator. Appreciate your time.

TOOMEY: Thanks for having me, Sean.

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