This is a rush transcript from "Hannity," October 19, 2012. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST OF "HANNITY": Governor Mitt Romney received another boost from an unlikely source yesterday. President Bill Clinton, now, a few weeks ago, the former commander in chief caused a stir with folks in the Obama camp, when he said that he believed Romney was indeed qualified to be the president of the United States. Now, yesterday, he did it again when he said this.

(BEGIN VIDEO CLIP)

FORMER PRESIDENT BILL CLINTON: Governor Romney's argument is we're not fixed. So fire him and put me in. It is true, we're not fixed.

(END VIDEO CLIP)

HANNITY: And now, the RNC is using Clinton's own words against Obama. Watch this.

(BEGIN VIDEO CLIP)

CLINTON: Governor Romney's argument is we're not fixed. So fire him and put me in.

PRESIDENT OBAMA: If I was in his shoes, I'd be making the same argument.

CLINTON: It is true, we're not fixed.

VICE PRESIDENT JOE BIDEN: We know we're not there yet.

UNIDENTIFIED MAN: We're not where we want to be.

OBAMA: Too many of our friends and families are out there looking for work.

UNIDENTIFIED MAN: I don't think anybody would say the word where we want to be.

OBAMA: The housing market is still weak. The deficits are still too high. Are we satisfied? Of course not.

OBAMA: They shouldn't feel satisfied.

BIDEN: There's still a lot of people in trouble.

CLINTON: Are we where we want to be today?

CLINTON: No.

OBAMA: Here is the thing. A lot of people are still hurting out there.

OBAMA: But that's not good enough. That's not good enough.

REP. NANCY PELOSI, D-CALIF.: It's certainly not enough.

OBAMA: We know it's not good enough.

OBAMA: I always believed this was a long term project. It's going to take more than a year it's going to take two years; it's going to take more than one term. It probably takes more than one president. If I don't have this done in three years, then there's going to be a one-term proposition.

(END VIDEO CLIP)

HANNITY: And joining me now to try to defend the president's failed policy. Former Chairman of the Council of Economic Advisers, professor at University of Chicago, Austan Goolsbee is with us. Turn this around in three years; it's going to be a one-term proposition. And he also said this about cutting -- he made a promise in 2008. He'd cut the deficit in half. This is what he said.

(BEGIN VIDEO CLIP)

OBAMA: Today, I'm pledging to cut the deficit we inherited by half by the end of my first term in office.

(END VIDEO CLIP)

HANNITY: Now, we know that he also said, George Bush, $4 trillion in eight years was irresponsible and unpatriotic borrowing in the name of our kids from China on a credit card. So, he failed to fulfill his promise. Can you at least acknowledge that?

AUSTAN GOOLSBEE, FORMER OBAMA ECONOMIC ADVISER: Let's start with the first one about whether we turned it around. And it's going a different direction. I mean, we were losing 800,000 jobs a month; it was getting bigger and bigger every month; until the president came in and then it started getting smaller, loss, smaller loss. Now, we've had some, almost two-and-a-half three years of private sector job growth. How can you say that's not a turn-around?

HANNITY: We are on track this year to have smaller growth than last year. Last year had smaller growth-- hang on a second. Smaller growth than 2010. And 2010 was the year of recovery summer. Joe Biden said 500,000 new jobs a month. None of these promises have been fulfilled. And on top of it, not only did it not cut the deficit in half, six trillion in debt, 25 million un- and under-employed, one in six in poverty. Seventeen million more Americans on food stamps. Forty nine million Americans in total. And half the kids can't get a job when they get out of school. Is that success?

GOOLSBEE: Sean, I hear you. I think it's true. I think it's odd that the RNC would take what has been the public statement of the administration that we know we're not all the way there yet. But you just keep repeating that look; the conditions are not all the way back to where they were.

HANNITY: Not all the way back. We're going backwards.

GOOLSBEE: But there's been improvement, Sean. There's been substantial improvement.

HANNITY: Wait a minute.

GOOLSBEE: You're dating back to the middle of the recession.

HANNITY: If the labor participation rate were the same as when this guy took office, unemployment would be 11 percent. If you count the people we don't count anymore, it's 14.7 percent.

GOOLSBEE: Sean, as you know, the labor participation rate of men in this country has fallen during each of the last seven presidents. Because that is what happens when your population is aging--

HANNITY: Austan, you are too smart a guy. I really believe, I think you're wrong. You're a big redistribution guy; you cannot define this -- you really believe this is --

GOOLSBEE: I didn't define it as success. I said we are recovering. That's different from being fully recovered.

HANNITY: Wait a minute. He said, if I can't get this done in three years, it's a one-term proposition. He didn't get it done.

GOOLSBEE: Yes.

HANNITY: Fewer Americans working.

GOOLSBEE: He said, he had to turn this around in three years --

HANNITY: Wait a minute.

GOOLSBEE: -- the sentence that you quoted.

HANNITY: He predicted that the unemployment now would be five --

(CROSSTALK)

GOOLSBEE: That is exactly the point.

HANNITY: If we passed the stimulus unemployment would be 5.4 percent.

GOOLSBEE: No, no.

HANNITY: Wait a minute. Wait a minute. When he became president --

GOOLSBEE: That was a prediction.

HANNITY: If he became president, he'd cut the deficit in half in his first term. We have $6 trillion in new Obama debt. That's not what we were sold, Austan. That's not hope and change. We are robbing our kids' futures and he hasn't been asked about it.

GOOLSBEE: He has been asked about it all the time.

HANNITY: Never.

GOOLSBEE: And I've certainly been asked about it by you many times.

HANNITY: I have a question for you. You can't duck this question, all right.

GOOLSBEE: I never ducked the questions. I always give you an answer.

HANNITY: Give me Obama's specific plan for the next four years because I say he doesn't have one. Give me the specifics.

GOOLSBEE: I can give you lots of specifics.

HANNITY: Give me some.

GOOLSBEE: If you want me to give you specific overview, I would say it's let's do the grand bargain along the lines of what he proposed last year with the debt ceiling.

HANNITY: That's not specific.

GOOLSBEE: I can get it specific as you want. He had in his budget; he's got $2.5 trillion of spending cuts and saved interest with $1 trillion of new revenues.

HANNITY: He couldn't pass it then. Why can he pass it now?

GOOLSBEE: Well, we're going to have to see what happens in the election before we can determine if it would pass.

HANNITY: You know, give me a grade for the president. I give him a failure on economy and a failure on broken promises. What do you give him?

GOOLSBEE: I would say on the economic conditions how is the economy doing? No better than a C. Obviously, we have come back from what was the deepest F of our lifetime to get back to C in conditions. On policy, you know, I'd say he deserves at least a passing and improving grade. And we're to see what the final --

HANNITY: An "I" and a "C." America deserves better, Austan. But it's good to see you. You're going to owe me a beer and steak at the end of this campaign.

GOOLSBEE: I'm going to start getting -- it those be a good one. Not a hanger steak. When the president wins, you are buying it for me.

HANNITY: Yes, we'll see. Don't count your chickens or else they may come home to roost. Somebody famous in Chicago said that, but I've got to go. Thanks, Austan.

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