This is a rush transcript from "Hannity," October 27, 2009. This copy may not be in its final form and may be updated.

ANNOUNCER: This is a viewer warning. "Hannity" is intended for freedom-loving Americans who aren't fooled by phrases like "consumer option." This program is not White House approved.

SEAN HANNITY, HOST: All right, this day has not been kind to Senate Majority Leader Harry Reid. Less than 24 hours after he announced that a government-run health insurance option would be part of the health care bill, Republicans, Democrats and moderates alike are all turning their backs on this plan, and the revolt has thrown open the door for a possible Republican filibuster, as it now appears that Reid's plan has nowhere near the support of 60 senators.

Now the first signs of trouble today for Reid came from within his own party when moderate Democrats, Evan Bayh of Indiana, Ben Nelson of Nebraska, both confirmed that they have major concerns with a bill that contains a government option.

Now Senator Reid has also been fielding complaints from the far left of his party. Roland Burris of Illinois is said to be livid that Reid's plan contains a provision that could allow states to opt out of the government insurance option, if they so choose. In fact, the existence of such a provision could potentially jeopardize Burris' support for the entire bill.

Now without question, that is a vote that Senator Reid was counting on. But the knockout blow for Prince Harry came just a few short hours ago when Senator Joe Lieberman said he won't just vote against Reid's bill, he will, in fact, join a Republican filibuster to block its passage.

So the list of moderate senators that have come forward to say they flat out oppose a government option now includes Democrat Blanche Lincoln and Maine Senator Susan Collins and Olympia Snowe.

So can Senator Reid recover from this very disastrous day? We're joined now by Arizona Senator John McCain.

Video: Watch Sean's interview

Senator, welcome back to the program.

SENATOR JOHN MCCAIN, R-ARIZ.: Thanks for having me back, Sean.

HANNITY: All right, so Harry Reid comes out yesterday and he talks about a government option opt-out coop. You know, I think for most Americans listening to this latest invention that they've come up with, tell us where you think this came from and what it actually means.

MCCAIN: I do not have a clue.


MCCAIN: I can tell you that a coop, obviously, is not something that works at, quote, "opt-out." We have an opt-out program today that's called Medicaid. But the fact is that this seems to be a certain flailing around, looking for something that could get 60 votes.

And remember, there's going to be two votes that are going to be important. One is the motion to proceed to the bill, in other words, to move to the bill, and the other one is to vote for cloture to cut off debate on the bill.

What he'd like to do is to get people to agree to proceed to the bill, not vote to close off debate. And then he only needs a little over 50 votes. But you want to call it consumer option, you want to call it banana option, it's still a government takeover of the health care system in America.

HANNITY: All right. Look, Senator, no body would accuse you of not being informed about the workings of Washington and all that goes on in the Senate. So — you're laughing. So you can't tell our audience what a government option opt-out coop is. You can't explain it to me.

MCCAIN: I cannot explain it to you because Republicans have been completely shut out of any conversation or negotiation. And you know that during the campaign — I wish our viewers could see it over and over again.

The president is saying when we take up health care reform, C-SPAN will be in the room, Republicans will be there, and the American people will be able to see who's on the side of the pharmaceutical companies and who's on the side of the American citizens.

Behind closed doors they cut deals with the pharmaceutical companies, with the hospital people. They tried to cut one with the American Medical Association to the tune of $247 billion. That didn't work. And so it's business as usual. There is no change.

HANNITY: All right, and now, have you had any opportunity to speak to Harry Reid, any Democrat, about this? Have you, for example, been in touch with the president about this?

MCCAIN: No. I think they lost my number.


HANNITY: By the way, Senator, they lost mine too.

MCCAIN: But I know the Capitol operator can get a hold of me. They're not.

Look, they're not talking to Republicans, that's just a fact, and that's really harmful when we're talking about this kind of legislation of this proportion.

HANNITY: All right. Because this is important, I think, that we break this down. For the average person who's watching out there, we're talking about taking over, you know, 20 percent of the American economy. You can't explain it. There's no Republican that can explain it so where do we go from here?

Is Susan Collins and Olympia Snowe, are they out for good now? Where's Evan Bayh? Where's Ben Nelson? Where's Blanche Lincoln? Where's Mary Landrieu? I mean are they in the process? Are you talking to any of them?

MCCAIN: No, I have not. But I know this, Sean, seriously. They will do anything necessary to pass legislation so they don't repeat what happened to President Clinton and his efforts. Remember Hillary-care back in 1994?

So please do not discount the fact that they have overwhelming majorities and they're going to try to do what's necessary to pass something. But they're having great difficult with the banana option.

HANNITY: All right. So the change in name, as you're calling it now the banana option. All right, I like it. It's as good as any other one. I mean they keep coming up with new names. All right, what about your friend, Joe Lieberman? You're friends with Senator Lieberman. He supported you for president. He's threatening to join a Republican filibuster. What is he telling you?

MCCAIN: Well, he tells me what he said publicly, and that is that given this proposal as he reads it, and — that he would not vote to cut off debate, which is, as I mentioned, that critical vote. The final passage, they only need 51 votes. They need 60 to cut off debate, you know, and end the filibuster.

That's what he is saying. And he is a man of honesty, integrity and one of the finest men I've ever known in my life.

HANNITY: All right. You're talking about the cloture vote, but usually in the past — I mean, do you even see them getting the 60 votes for cloture? Where do those votes come from?

MCCAIN: They are wheeling and dealing and negotiating and buying different interests to put pressure on members of the Senate as we speak. Please do not discount the fact that there are 60 Democrats, and that's all they have to corral and obviously —

HANNITY: But wait a minute.

MCCAIN: At least for a while they had Senator Snowe.

HANNITY: Minus Joe Lieberman, so they don't really have 60.

MCCAIN: Well, he'll — you know, look, all I know is what I am told. I have not been invited in, as you know. But he brings people in the room and says, what do you need? Like he did with the doctors, the AMA, tried to buy them off for $247 billion. It didn't work. We voted it down.

But — and so, what do you need? There's an enormous amount of wheeling and dealing and pressure on the president as well.

HANNITY: Yes, and when you think about this, though, really what you're saying — and this, I think, is very profound — that they're going to use taxpayer money. They're going to bring in any wavering senator and they're going to say, what do you need? What pork barrel project do you need for your district?

And they're going to use taxpayer money. What is the difference between that and bribing somebody to do something? It sounds like a bribe.

MCCAIN: It happens here in the Capitol, but they're not only doing it with individual senators. They're bringing in groups like the pharmaceutical companies, as they did, and said, look, we'll let you — we'll be against re-importation of drugs from Canada. We'll.

HANNITY: We'll give you this, we'll give you that.

MCCAIN: Yes, yes. We'll give you this, we'll give that you. They're buying off the special interests, and frankly, the American Medical Association ought to be ashamed.

HANNITY: Is it the moral equivalent of a bribe?

MCCAIN: I guess it's in the eye of the beholder. But I don't think it's a, quote, "bribe," but I think it's a very terrible way to do business.

HANNITY: All right, Senator, it's shocking. This is government in action. And we'll watch this unfold. Thanks.



MCCAIN: Could I mention one other issue?

HANNITY: Yes, sir.

MCCAIN: The 14 people, young Americans died.

HANNITY: This weekend.

MCCAIN: Eight more today. It's time to make a decision and send those troops there. And the longer we delay, the more they're in harm's way and in danger, and the time is up. It's time to act and accept and implement General McChrystal's strategy. And it's going to take time to do it.

HANNITY: I can't agree with you more. And to quote Dick Cheney, "They're dithering." And these guys, obviously, they need help and this recommendation was back in August. It's time for the president to make a decision.

Thank you, Senator. Thanks for being with us.

MCCAIN: It's overdue. Thank you. Bye.

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