Exposing 'The Price of Politics'

This is a rush transcript from "Hannity," September 11, 2012. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: We begin tonight with a "Hannity" cable exclusive. Bob Woodward is the author of a brand-new book that has all of Washington talking, which is usual practice. It's called "The Price of Politics" and it takes you, the reader, behind closed doors into the negotiating rooms of the Capitol and the White House, and it exposes how the president tried but ultimately failed to restore the American economy.

Now, this book raises some very serious questions about the president's ability to look beyond politics and lead the nation during times of great consequence.

And here to talk about that and much more is the man himself, the author of "The Price of Politics," available in bookstores everywhere. Associate editor of The Washington Post, Bob Woodward is back. How are you? Good to see you.

BOB WOODWARD, AUTHOR, "THE PRICE OF POLITICS": Thank you.

HANNITY: I read the book cover to cover. I want every American to read it for this reason -- and it should make everybody angry at the level of dysfunction at a time, you say, the American people have never had any real knowledge of just how severe this was.

WOODWARD: I mean, it was the kind of crisis that took the country's economy to the cliff. President Obama, when I interviewed him for the book, said they were days away from having $5 billion in the U.S. Treasury. That's it. Now, that's half a day's federal spending.

If you think about it, to let that happen -- not just the pesident, but the Republicans could have sent shockwaves through the country, could have done things to the American economy that Tim Geithner, the Treasury secretary, said would have been worse than the 1930s depression.

HANNITY: I mean, it's so dysfunctional. It's far worse than we ever said. Here's what really bothers me in all of this. You know, we have 25 million un and under-employed Americans right now. One in six Americans in poverty. Forty nine million Americans on food stamps in this country. We are really -- and nearly $6 trillion at the end of Obama's first term in new debt. This is not a game anymore. This is about as serious a crisis as I think we have faced since the great depression and getting worse.

WOODWARD: And this was last year. And they fixed it by postponing everything.

HANNITY: Yes.

WOODWARD: No cuts, no tax increases, no sensible alignment of the federal budget. And so, we are going to in December or January be back in the same mess and the federal government is going to be in the position where there is no Congressional authorization to pay its bills. Now this as you will know, this is a federal government that borrows $1 trillion a year. We have got -- I mean --

HANNITY: More.

WOODWARD: In the book, as you went through it, it's Tim Geithner, to his credit, who is running around saying, fire! We have got to fix this! We are going to do potentially something that will be indelible and last for generations. It is going to screw up everything. And when you get into the details, you realize that it could have been fixed.

HANNITY: Yes.

WOODWARD: That quite frankly, I think Bill Clinton or Ronald Reagan would have sat down and said, we can't let this happen.

HANNITY: Well, you go into detail in the book about that, how Ronald Reagan -- remember, I don't know if you mention Tip O'Neill, but you talk about his liaisons to Congress. And both he and Bill Clinton, on the phone late at night. They had relationships with members of Congress. That's not the case with President Obama.

WOODWARD: That's right. And it's not, you know, the White House was saying, oh, this is something -- my conclusion. It's in the book, it's Larry Summers, who was the economic czar for Obama in the White House for the first two years. And Summer says, Obama has no feeling for the game of politics, no sense of the joy of the game. And in fact does not like these people up in Congress. And so, he's cut off. He has not got the sort of phone call relationship, personal relationship where he can call somebody up and say, look, let's -- let's do this. Let's do a deal that's in the larger interest of the whole country.

HANNITY: So, on the brink, they were going to have, what? Five billion in the Treasury -- that's a billion not trillion. Five billion. We are basically out of money.

WOODWARD: Yes, dry.

HANNITY: Yes. Done. Finished. All right. So, they we are right up to the brink here. The president doesn't have a good relationship with Congress. Behind the scenes, you describe him meeting with the speaker of the House John Boehner, the nicorette merlot cigarette summit, whatever.

WOODWARD: Yes. Because Boehner said, you know, here Obama is having iced tea and chewing nicorettes and Boehner's having a merlot and a cigarette.

HANNITY: All right. So, but they are trying to get this deal together, the two of them.

WOODWARD: To their credit. To their credit.

HANNITY: I will agree with that.

WOODWARD: Yes.

HANNITY: To their credit, except, I wouldn't have liked that as a conservative. Because Boehner was agreeing to do something that the Tea Party would have had a fit about, which is raising, what? Eight hundred billion in taxes, and then Obama comes back and wants $400 billion more at the last minute.

WOODWARD: Yes, and of course, Boehner's argument is that $800 billion over 10 years in new revenue through tax reform, which of course is what Ronald Reagan did in 1986 and actually lowered the income tax rate down to 28 percent. It's hard. But it's been done. And it was one way to -- to get out of this. But you are absolutely right. It's the President who comes in and says, oh, we need $400 billion more in some form or his position is, he offered it, hey, John --

HANNITY: Yes. At the last minute.

WOODWARD: Yes. Kind of at the last minute. And when you get into the nitty-gritty details, you wonder, well, why would he do that? He did it because six senators came out with a new plan, and David Plouffe, who was the senior political adviser in the White House, the man who was Obama's 2008 campaign manager says, oh, wait a minute, this is a watershed moment. This will give Boehner more maneuvering room because some Republicans are calling for more revenue. And the Congressional liaison in the White House tells the president, look, if you don't do this, you are going to be seen as the weakest president in all of mankind. And in that kind of environment, the president impulsively goes out, endorses the plan and Boehner is trying to -- go ahead.

HANNITY: You know what infuriated me as all of this is going on as you described in the book? The president's fixation on one issue. That this can't come up again before the election. I actually think the one thing that might have helped, if it did come up before the election, because it would be self-serving at that moment that they might have the pressure of getting something done. And I thought, that bothered me that it was -- he was thinking about electoral politics while we are on the brink of bankruptcy.

WOODWARD: That's one side of the argument. The other side of the argument is, can you imagine having this kind of a crisis in the middle of a presidential campaign?

HANNITY: It might get something done.

WOODWARD: Well, but you know what happened last year, getting something done was postponing everything to 2013. They did nothing -- not this painful at the time.

HANNITY: That's the story here for the American people. They didn't have the courage, the ability, to navigate through these tough times and they pushed it all up to 2013. And you know what the CBO is projecting, a very bad year next year.

WOODWARD: A government created recession.

HANNITY: It's the most predictable economic crisis we have ever had.

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