SEAN HANNITY, HOST: We are almost one week removed from Tuesday's historical election where in a single night Republicans picked up well over 60 House seats. It was the biggest swing the GOP has seen in more than 70 years.
But as the lights go dark at campaign headquarters all across the country, the time for governing is drawing near. And voters want to know will House Republicans fulfill their Pledge to America?
Now here's what we know so far about the leaders who'll be tasked with keeping the party honest. It is believed that John Boehner will be the next speaker of the House. Minority Whip Eric Cantor will be installed as majority leader. Another young gun, California's Kevin McCarthy, and author of the pledge, is likely to be voted as majority whip.
And a battle over the number four spot-- chair of the House Republican Conference -- appears to be shaping up. Minnesota's Michele Bachmann and Texas Representative Jeb Hensarling are both vying for that job.
And joining me now with his take on the new faces of the Republican Party and the road forward, the author of the book, "Valley Forge: George Washington and the Crucible of Victory," which is available at Amazon.com and Newt.org/valleyforge, former speaker of the House Newt Gingrich in studio tonight.
Mister Speaker, welcome back.
NEWT GINGRICH, "VALLEY FORGE" AUTHOR: It's great to be here.
HANNITY: We appreciate it. All right. First of all, we've got the biggest election in 70 years. Your reaction?
GINGRICH: I think it was just that. I think it was a rejection of the left, a rejection of the direction they wanted to go in. And I think the question now is whether the Republicans can start moving from the country's rejection towards a replacement of the policies of the left.
And I think that John Boehner set the right tone. I think it's going to be a very workman-like process. And the question will be, what does President Obama do? Does he accept the reality that when you lose 680 state and legislative races, the most in modern American history --
HANNITY: 682, I don't mean --
GINGRICH: And you lose, what, 64, 65 House seats, the most since 1932, you lose governorships, you lose Senate races. That was a clear signal here that the country thought this administration had both failed in performance and was wrong about its policies. And we'll see now how the president reacts.
HANNITY: All right. There are battle lines being drawn. Even the Democrats are saying well now the Republicans have to compromise. Eric Cantor this week saying no, it's the president that took the shellacking he's got to compromise.
We've got a lame-duck session coming back. And the first test probably is then.
What will happen and how should the -- well, in terms of -- in one sense, how are we going to deal with the extension of the Bush tax cuts?
GINGRICH: I think the Republicans ought to say they are very prepared to pass no tax increase on any American during a recession. And if the president would like to do that during the lame duck they'll be glad to do that.
If he won't do that during the lame duck that should be the first item of business. Dave Camp, the new chairman of Ways and Means, ought to report out a no tax increase on any American bill the first week of January. They get sworn in on the 3rd. They could pass it out by the 5th or 6th.
HANNITY: But wait a minute. What if the Democrats hold the line because they still have control?
GINGRICH: Well, they won't have -- they won't have control as of January 3rd.
HANNITY: Yes, but in the lame duck is what --
GINGRICH: If the Democrats say they're not prepared to accept the Republican position, the Republicans ought to say fine, then do nothing until we come back in January.
HANNITY: And can they stop that?
GINGRICH: Sure. With Mark Kirk having won in Illinois, I think nothing can get through the Senate that Mitch McConnell doesn't agree to.
HANNITY: OK. Well, so that would be their strategy there and then it's got to be permanent. What if the president says, all right, permanent on middle income Americans, lower income Americans, but not those making $200,000 a year, which are mostly small business?
GINGRICH: Yes. I think the Republicans have to say, you know, are you really telling us that in order to wage class warfare, you would further cripple the American economy? And I believe that the president will cave.
I think in the Senate -- remember there are 23 Democrats up in 2012, in the Senate. Do they really want to go home and say class warfare is more important than creating jobs? I think the average American felt they had just sent a signal that they are sick of left-wing class warfare language. And they'd like the president to work with the new Congress to try to get something done for America.
HANNITY: The president is saying he thinks it was a communications problem.
GINGRICH: Well, I think it is a communications problem because --
HANNITY: Isn't it an agenda problem?
GINGRICH: No. It's a communications problem and the American people -- despite having defeated that many Democrats, haven't succeeded in communicating to the president. But I think if he doesn't figure out that it's his problem to listen, he will be a one-term president.
HANNITY: You see I agree. All right. So how do -- how would you suggest strategically, tactically, Republicans deal with repealing health care which exit polls showed an overwhelming numbers that the American people want to do?
How do they -- how do they handle it? They're going to pass it in the House, the president doesn't want to repeal it --
GINGRICH: Well, I think --
HANNITY: Is it justified an issue for 2012?
GINGRICH: At American Solutions we're looking very closely at launching petition drives in every state that has a Democrat up for reelection in 2012.
HANNITY: Claire McCaskill is one of them.
GINGRICH: That's right. You start looking at Missouri, Montana, Nebraska, Florida, Virginia. There are a lot of states out there where you have an absolute majority in favor of repealing Obamacare.
And then frankly, if they didn't get it through the Senate looking at doing a national petition to try to get 50 million to sign a petition to the president saying, please sign the repeal.
I mean you look at the damage this bill is doing every day right now. Even AARP had to raise the insurance on their employees.
HANNITY: And they supported the bill which was pretty funny.
GINGRICH: You have to wonder what they are thinking about now?
HANNITY: How do the Democrats -- they get off -- the president referring to Republicans as enemies and they have to sit in the back and then the following week he's talking about them compromising and compromise is defined obviously in his mind by going along with him.
Do you think he has the capacity -- because I've asked everyone this question. I think he's a rigid ideologue who showed no capacity for openness or change. Does he have the capacity to compromise?
GINGRICH: Well, I think that it's a bad sign that he's not talking about having Speaker Boehner -- Speaker-elect Boehner and Republican Leader McConnell down by themselves. That he's back to a dog and pony show, big meeting, et cetera.
If this president wants to figure out how to be effective, he needs to spend time particularly with John Boehner, in private, one -- just the two of them, talking about the future and seeing whether or not they can find a common ground.
If all he does is posture, the American people I think will take very badly, because the American people sent as strong a signal as we've seen since 1932. That -- you think about that. That's pretty remarkable that they defeated more Democrats than either party has lost in an election since 1932.
HANNITY: All right. Speaker Pelosi said she wants to stay on as leader for the Democrats. Good idea? Bad idea?
GINGRICH: Well, I think it's terrific for the Republicans.
HANNITY: She's got a six percent approval rating. I mean --
GINGRICH: You know I suspect she has the votes to win. I suspect that she's decided that's her role. It tells you that she believes that they'll make a big comeback in 2012, which I suspect is a huge mistake.
HANNITY: Well, she didn't think -- Election Day, at least publicly she was not indicating she thought they would lose in any way.
GINGRICH: You know, maybe I came out this differently as you remember, when we lost five seats we still kept control. But I clearly had failed to grow the party in '98. I stepped down. I said, you know, I felt I had lost the mandate for leadership. I felt that it was better for the party to get a new leader.
As a result we kept control for eight more years. I don't -- so maybe I'm biased. But I don't understand how she thinks from a hard left San Francisco base, she's going to go out around the country and recruit the kind of candidates they need to be competitive in 2012.
They need candidates who are about five miles to her right in order to be competitive. And if they stay with Speaker Pelosi as the symbol of the House Democratic Party, I think they are going to be in the minority for a long time.
HANNITY: All right. The president was asked -- when we get back I'm going to ask you this. He was asked what he thinks of jihad when he was in India. You're going to be shocked by his response.
We'll get that and also questions about you and 2012. You said you're ready to announce tonight your decision.
GINGRICH: I'm going to announce tonight when I was going to announce.
HANNITY: Former Speaker of the House Newt Gingrich.
HANNITY: And we continue now with former speaker of the House, Newt Gingrich. The author of "Valley Forge: George Washington and the Crucible of Victory."
All right, so the president goes on a trip. And he's asked a very simple, basic question. I think one that you'd be able to answer. You know. What he thinks of jihad and jihadism. Here's his answer.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: The phrase jihad has a lot of meanings within Islam. And it's subject to a lot of different interpretations. But I will say that, first, Islam is one of the world's great religions.
I think all of us recognize that this great religion, in the hands of a few extremists, has been distorted to justify violence.
And so I think one of the challenges that we face is how do we isolate those who have these distorted notions.
(END OF VIDEO CLIP)
HANNITY: I want to break this down a little bit. The question was, what does he think of jihad and jihadism. First thing he says, well, it's subject to a lot of different interpretations, and first let me say that Islam is one of the world's great religions, more than a billion people, majority, they all reaffirm their peace, et cetera, et cetera.
Why couldn't he just say jihad killed 3,000 Americans? It is the belief or the false use of God to justify killing and murder and war? Why didn't he say that?
GINGRICH: You know Callista and I did a movie called "America at Risk." And the subtitle is "The War With No Name." And when you watch this film you see, for example, Congressman Lamar Smith asking the attorney general, do you think radical Islam might have something to do with these things? And he says, "What, what are you asking about?"
It's really bizarre. I think this administration is in such total denial about who is trying to kill us and what their motives are that it's dangerous to the country. And the president today in this particular performance was following up on this continuous denial.
There were thousands of terrorist actions since 9/11, thousands, virtually all of them by people who are motivated by radical Islamist beliefs. The guy who built the car bomb in New York's Times Square was very blunt with the federal judge. Said this is the beginning of the war. There will be rivers of blood. If I could die a thousand times I would die a thousand times.
And you cannot get this administration to understand who they are.
HANNITY: You know -- but what is it? Is it that they don't understand? It seemed that the president was -- gave a tortured answer. That he was so deliberate, so careful, so afraid, bent over backwards to praise Islam when that's not what the question was.
GINGRICH: There's almost no language. I mean I've described them as having a fantasy foreign policy, for example. They just sent three U.S. executives to stand in front of the Human Rights Commission of the United Nations, to have Iran, Libya, Venezuela, Cuba attack the United States.
I mean this is grotesque. And you have to ask yourself it is almost more -- it's a psychological problem of the modern left, that the modern left of which Obama is a representative cannot deal with the reality that there's evil in the world. And they can't deal with the reality of the people who genuinely hate us.
And so they go through these contortions and today the president was giving a sort of a typical contortion delivered in a pleasant way by a man who's desperate to avoid telling you the truth.
HANNITY: All right. Let me move on to the economy because it's a big issue now. Germany, by the way, interesting point, has an 18-year low in their unemployment rate. They raised the retirement age in France and we saw what happened there. 490,000 jobs are going to be cut in Great Britain, government jobs in these new austerity measures that they're adopting.
So your moves towards capitalism, towards economic sanity and balanced budgets, and America is moving in just the opposite direction. What does that mean for America in terms of what we can expect?
GINGRICH: Well, you know, that's why I think the election, and Speaker Boehner and the new Republican majority is going to be very interesting. Because I believe that they are going to be driving towards - - and all the new Republican governors -- are going to be driving towards a much more pro manufacturing, pro jobs, you know, pro private sector approach.
And I think the great crossroads for President Obama is going to be, does he come home from this trip and cooperate with the new Congress and get the American economy growing again? Or does he decide he wants to wage class warfare and he wants to hunker down and fight ideologically, in which case I think he guarantees being a one-term president.
HANNITY: Don't you think America is -- politically that we're that divided now? I mean either you want health care or you don't. You either believe in tax cuts or you don't. You think the government is the answer to your problem and debt and deficits --
GINGRICH: Well --
HANNITY: They just added $600 billion more that they're using --
GINGRICH: Look, Chairman Bernanke is profoundly wrong in what he's doing at the Federal Reserve and it's very dangerous.
HANNITY: This is now after two trillion, now we're going to add 600 billion.
GINGRICH: Right. I'm just saying. So if you look at the vote, the American people aren't confused. I don't think John Boehner is confused. I don't think Paul Ryan is confused, or David Camp or Eric Cantor. And I think you're going to see a very clear choice.
And the only question is going to be, is the president going to be cooperative with this newly-elected majority which the American people have chosen, or is the president going to fight them from day one because --
HANNITY: What do you think?
GINGRICH: They're going to draw a real choice.
HANNITY: I think they're going to fight.
GINGRICH: Well, I think if he does fight, he does guarantee he's a one-term president.
HANNITY: All right. Are you running?
GINGRICH: I don't know yet. Callista and I --
HANNITY: I thought you're going to tell me.
GINGRICH: Callista and I will report to you --
HANNITY: You're going to announce here.
GINGRICH: At the end of February, early March, we will be here talking about it.
HANNITY: Here talking about it. Have you noticed -- you sound very Bill Clinton. You hung out with Clinton too long.
HANNITY: That was a simple question. I remember -- you know, I said would you announce here?
GINGRICH: And like Ronald Reagan I want to give you a simple answer. I'll be here, Sean, because you're my friend and I look forward to talking to you.
HANNITY: All right. Former Speaker of the House Newt Gingrich.