updated 2/3/2006 11:31:04 AM ET 2006-02-03T16:31:04

Guests: Don Evans, Viet Dinh, David Gergen, Chuck Todd, Mary Ann Akers

CHRIS MATTHEWS, MSNBC HOST:  Coup d‘etat in a masterful stroke of surprise, secret vote counting and hardball.  Republicans swiftly and smartly decapitated their leadership this afternoon.  Last month, hotshot reformers forced out Tom DeLay.  Today they have lopped off his protege, Roy Blunt.  Starting tonight, it‘s a clean break for the Republican Congress.  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Today House Republicans voted to exorcise the DeLay demons from their chamber.  In a close vote on the second ballot, Ohio‘s Tom Boehner defeated Missouri‘s Roy Blunt, a Tom DeLay protege, to became the House majority leader. 

Blunt has served as the acting leader since Tom DeLay resigned the post because of legal problems.  Boehner supporters heralded his election as a fresh start, and a chance to change not just what Congress does, but also how they do it.  But how much of a different can one man make?  And how will his leadership affect our Congress and our country?  We‘ll have the latest on that in just a moment. 

Also tonight, President Bush‘s good friend and former secretary of commerce, Don Evans, will talk about what the president meant by his “addicted to oil” remarks and the administration‘s push to secure our standing in the global economy. 

But first for more on the dumping of the House Republican leadership today, we‘re joined by NBC News‘ Mike Viqueira.  Big move out there.  They have cleaned the deck, cleared the deck for new leadership.  Was it a big surprise to dump Roy Blunt? 

MIKE VIQUEIRA, NBC NEWS CONGRESSIONAL CORRESPONDENT:  Well, it was a big surprise, Chris.  I‘ll tell you, a shockwave came over us.  We were all standing outside the Cannon House office building‘s caucus room today, when word came that on the second ballot, Boehner had defeated Roy Blunt. 

Roy Blunt, of course, had been the front-runner all along. He was seen as the rightful heir, if you will, next in line behind Tom DeLay, had worked hand in glove with DeLay over many years, was DeLay‘s hand-picked successor to be under him when DeLay was the whip, and then moved up when DeLay became the majority leader. 

But against all of this backdrop of scandal which has brought down DeLay a month ago, Randy Cunningham—Bob Ney is no longer chairman of an important committee—that‘s the backdrop in which this election took place. 

And when Blunt won the first round of balloting, he had 110 votes.  All he needed was 116.  It looked like he was going to cruise on the second ballot but then something very surprising happened.  Many of Blunt‘s supporters who had committed to him for the first ballot apparently abandoned him on the second. 

Also, the third place finisher on the ballot, a conservative, a favorite of the conservatives, a man named John Shadegg of Arizona, who would have represented a really clean break from what had been going on in Congress over the last several years, he dropped out because he only got 40 votes on the first ballot. 

Most of his voters apparently—almost all of them—went over to the Boehner side.  A stunning announcement outside that Cannon caucus room when Boehner was announced the victor, Chris.

MATTHEWS:  Was Tom DeLay in the room?

VIQUEIRA:  That is a good question.  I think that he was because there was only one member missing as far as I know, but his aides were certainly outside of the room, sort of wandering around.  They really don‘t have a role right now.  I believe that he was in the room.  I did not see him, I don‘t know who he voted for if, in fact, he voted, Chris. 

MATTHEWS:  What a coup d‘etat.  What a move to dump their leader.  After having got rid of Tom DeLay, now they get rid of his replacement, his preferred pick, and chosen successor.  He‘s gone now too.  I think the Republicans want to get reelected this fall.  Thank you, Mike Viqueira.  We‘ll be talking later about this. 

Now to President Bush‘s alternative energy proposals, which are already rankling Saudi Arabia.  The Saudi ambassador to Washington today, Prince Turki al-Faisal said he wants to if the president intends to break America‘s oil habit by reducing imports from other parts of the world as well as the Middle East. 

He said, quote, “Is that a declaration that the U.S. is going to work to be independent of Canadian oil, Mexican oil, Venezuelan oil? I see no threat from America receiving its oil from the Middle East.”  So why did President Bush compare oil to a narcotic and was it wise to single out the Middle East? 

Don Evans is a former oil man who served as President Bush‘s commerce secretary.  He‘s now CEO of the Financing Services Forum, which represents the CEOs of the financial services firms that comprise the global economy.  Mr. Secretary, thank you for joining us.  What‘s up? 

DON EVANS, FMR. BUSH COMMERCE SECRETARY:  You bet, Chris.  Good to me with you.

MATTHEWS:  This is a—you‘re an oil guy, the president is an oil guy, his father ran Zapata.  Dick Cheney, the vice president, is an oil patch guy with Halliburton.  Why are we going to something besides oil now, or what are we going for as an energy source? 

EVANS:  Well, you know, Chris, what we‘re going for is a diversified energy source.  The president knows the energy industry extraordinarily well and he knows that we cannot continue in the direction that we‘ve been on for the last four decades or five decades.

When we came out of the mid-40s, America was producing about two-thirds of the global supply of oil and we were consuming about half of that.  Today we consume about 25 percent of the oil in the world and we only produce about five percent of it. 

And so we cannot continue that, and basically what the president was saying was we have to move on a course of freedom from overdependence on foreign sources of energy, and the route to doing that is through advanced technology and alternative sources of fuel, and putting more emphasis on sciences and math and engineering and innovation. 

I mean, that‘s what his whole speech was about, but it was really straight talk from the president.  It was—you know he‘s very good at it.  I mean, he was delivering the message to the American people, which he‘s been talking about since he came into office.  As you remember, in 2001 he talked about how important energy was. 

He put out a plan in the spring of 2001, had a hard time getting Congress to respond to that, but Congress did in some ways finally respond to it.  But, Chris, you don‘t wake people up until prices move to much higher levels, they can get painful, and the president has just straight talked to the American people, we cannot continue on this course. 

And what the president did was he began shaping the direction for the future of America for generations to come when he linked together the importance of technology and the sciences, and math, and energy, because they‘re inextricably linked together. 

MATTHEWS:  Well, let me go through this speech, because he did say some things in words that I think you‘ll have a hard time explaining, because they have more to do with—it seems to me—geopolitics than economics. 

He said, “America is addicted to oil, which is often imported from unstable parts of the world.”  He‘s talking about the Middle East, obviously.  Why does the United States fear to rely on the Middle East, where we have all the might over there? 

EVANS:  Look, Chris, what you really have to do is look at this from a global perspective and what has happened in the last 50 years.  I thought it was a very important point the president made early in the speech when he said, when we came out of the World War II, there were only 22 democracies in the world, and now there are 122 democracies in the world. 

And there‘s more and more of the world moving to free market economies like China and like India, and today what is going on is the world is producing about 85 million barrels of oil a day.  That‘s all the capacity the world has, and the world is consuming about 85 million barrels a day, and guess what? 

Countries like China and countries like India and other countries around the world that are trying to grow their economies so they can lift people out of poverty are going to be demanding more and more energy in the years ahead, and the president is just simply saying, we cannot stay on this course. 

There is not enough supply of oil to continue to allow this global economy, as long as—as well as the domestic economy, to grow at its full potential, and so we have to change courses and we have to really begin to apply some new technology and bring some alternative sources of energy into the mix. 

I mean, the number one—the most important issue that the scientists and engineers in our country face today is to provide to the American people affordable, available, clean energy.  And that applies to the world.  So back away from any hot rhetoric about oil and geopolitical.  It‘s not about that at all. 

What it‘s about is straight talk to the American people and indeed the world, that if we‘re going to continue to grow this global economy at its pull potential to lift people up out of poverty all around the world, we‘re going to have to develop some new sources of energy.  And what ...

MATTHEWS:  I‘m not ...

EVANS:  ... better place to do that than right here in America.

MATTHEWS:  Mr. Secretary, I‘m not here quoting George Clooney or “Syriana” or any kind of fireworks in the center-left of the left.  I‘m remembering—I have a problem, I remember what people say.  Jimmy Baker, James Baker, the former secretary of state under the first Bush administration, was asked why we were fighting over in the Middle East, why were we fighting after the invasion of Kuwait by Saddam Hussein. 

And he gave a very tough answer.  Maybe it‘s a Texas answer but he gave it.  He said jobs, jobs, jobs.  He connected the dots.  He said we‘re fighting in that part of the world to prevent any cutting off of our oil supply.  Now the president says, we cannot rely on getting oil from unstable parts of the world.  He‘s saying basically the same thing that Jimmy Baker was saying, oil is connected to foreign policy. 

Is the president still saying we would be better of if we didn‘t have to stay in touch, keep this military presence in the Middle East, didn‘t have to keep winning wars over there to keep the oil coming?  Is he saying that? 

EVANS:  No, Chris.  What he‘s saying ...

MATTHEWS:  He‘s not saying that.  He‘s not saying what Jim Baker said, he‘s not saying what ... 

EVANS:  What he‘s saying—no, no, no.  What he‘s saying is it is all about jobs, jobs, jobs, in terms of the direction of this country in the years ahead, jobs for your children, for your grandchildren.  And what he‘s saying is we need to change courses.  We cannot continue to go down the path that we‘re going down, because there is not enough supply of oil in the world to grow our economy or the global economy at its full potential.  And so what he‘s saying is, “Let‘s focus on American competitiveness and let‘s put a hard focus on sciences, and math, and engineering,” so that they can develop the kind of new technologies and the new industries for jobs for your children and your grandchildren.

And I can tell you that one of the key areas of that will be in energy where we‘ll see a lot of new industries develop in this country, that will be providing jobs for people all across this country, will be in developing new sources of energy, and new forms of energy, as well as conservation of energy, and guess what?  That will apply all around the world.  So it is all about jobs, jobs, jobs.  His initiative is all about jobs, jobs, jobs, but you know, it‘s not a geopolitical statement that he‘s making, he‘s stating what the reality of the facts of 2006.

MATTHEWS:  James A. Baker from Texas, the former secretary of state, said the first war in the Gulf was about jobs, jobs, jobs.  He said that was what the war about.  I‘m accepting your argument right now, your statement that this call for energy independence by the president is not because we have to rely on oil from the unstable Middle East.  It has to do with our needs for economic growth.  Is that your bottom line?

EVANS:  Chris, that is my bottom line.  The world is producing oil, the Middle East, every country at its full capacity and it‘s very unlikely that we‘re going to be able to see supply in the world grow from the levels where we are right now.  There‘s a debate about that.  I‘m one that falls in the camp that says it‘s going to be very, very hard to do that.  But what I do know is China needs to continue to grow, India needs to continue to grow, America needs to continue to grow.  So what that simply says is we‘ve got to develop new forms of energy for the United States and the world.

MATTHEWS:  That‘s a great cause.  We‘ll be right back.  I too am worried Mr. Secretary that some day China is going to have the economic power to buy all the trees in North America, and all the oil in the world and we‘re going to be sitting there begging for assistance.  You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with close Bush confidante and former Commerce Secretary Don Evans.  Mr. Evans, thank you for sticking with us.  We had a nice tussle there.  I want to get a common ground here.  Back when I was in college, they talked about the inevitable growth of China as an economic monster, if you will—a huge economy because of its demographics.  Well here we are facing China.  What‘s to stop an economy like theirs over in Beijing from simply buying up all the future oil?

EVANS:  Oh, Chris, I‘m not concerned about that.  I got to tell you that they‘ve got their hands full in that country, they are certainly moving around the world and making some pretty impressive acquisitions, but I don‘t see that happening. 

Look, when I‘ve been to China and been to Western China, I see the huge problem that leadership faces, which they have 900 million people in the western part of China, living on a dollar a day.  I mean, so they‘ve got huge poverty in that country.  We ought to do what we can to continue to work with them, to continue to show them what kind of policies they ought to have in place to make sure that they have long-term economic growth themselves, because that‘s good for America. 

You know, Chris, you don‘t—I don‘t need to talk to you about globalization.  You understand it.  I mean, this world is becoming interconnected, interlinked faster than anybody thought imaginable, just a few years ago, probably five years ago. 

So I think what‘s important is for us to kind of work with China, continue to do what we can, to show them what kind of policies work, to provide for stable, long-term economic growth, so they can work toward lifting their 900 million people up out of poverty in the western part of the country.

MATTHEWS:  Let‘s talk about energy self-reliance and how it might work.  It‘s a great goal and I think both parties, the Democrats and Republicans, say they agree on it.  It‘s tricky finding what they agree on in particular. 

The Democrats are against developing the Alaskan—the Arctic wilderness area.  The Republicans are generally for that.  Democrats are tough on cafe standards, you know, fuel efficiency standards, things like that.  They don‘t mind pushing that stuff against industry, even if it causes the cars to get smaller and costs more money.  Where do you find an area where the Dems and Republicans can agree on an energy policy?

EVANS:  I think in the American competitiveness initiative, I think that‘s where it is, Chris, because I think that‘s where the new energy sources and technology will come from, and I don‘t think—I mean, you‘re going to have broad bipartisan support for the American competitiveness issue that the president has laid out, because these new ideas and new sources of energy and new ways to conserve energy, new ways to deliver clean energy, clean coal technology, hybrid fuels, it‘s all going to come out of the science and math and engineering world.

And so I think that‘s where the Democrats and the Republicans can agree, and both parties can come behind the American competitiveness issue that the president has laid out, that I‘m one happens to believe will shape the direction of this country for years to come.

MATTHEWS:  What can the average person—I only have about a half a minute here, Mr. Secretary.  A lot of people want to help in this.  Should they buy fewer SUV‘s, should their drive their car less, should they walk more?  A lot of people live out in the country, they don‘t have much choice in this.  Is there any real thing that could change our situation in terms of oil dependence right now?

EVANS:  Yes.  Chris, it is—I mean, it‘s—use less fuel, use less energy.  You know, Chris, want some very interesting fact.  In 1980, we were consuming—the world was consuming about 75 million barrels of oil a day, and prices spiked up and the worldwide consumption went to about 60 million barrels of oil a day. 

So if people put their minds to it, they can conserve each and every day.  You know, be careful, make sure you plan your day, where you‘re going to drive your car, turn out your lights at night in your home.  I mean, you know, there‘s lots of things that one can do to save energy.

MATTHEWS:  Great.  It‘s great having you on, Mr. Secretary.

EVANS:  Thank you, Chris, great to be with you.

MATTHEWS:  You‘re one of the good guys.  We all like you here.  You‘re great, we wish you were back in Washington because you‘re a very civil kind of guy and you‘re bipartisan and everybody likes you and we could use you here in Washington again.

EVANS:  Well thanks, Chris.

MATTHEWS:  OK, thank you.

EVANS:  Who knows, who knows, be sure to say hello to Kathleen for us.

MATTHEWS:  I will.  And maybe you‘ll be chief-of-staff one of these days.  Anyway, thank you—on Monday—thank you, Don Evans.  The Senate Judiciary Committee holds hearing into the National Security Agency‘s domestic spying program.  Coming up, we‘ll debate whether that program is a necessary tool—boy, this is a hot one—to fight terrorists or an overreach by the Bush administration.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PORTER GOSS, CIA DIRECTOR:  I‘m stunned to the quick when I get questions from my professional counterparts saying, “Mr. Goss, can‘t you Americans keep a secret?”

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL, that was CIA Director Porter Goss testifying today in front of the Senate Intelligence Committee, lamenting the leaks of secret operations.  For more on that and a preview of the NSA‘s surveillance hearings Monday, that‘s when they‘re coming up—we turn to MSNBC political analyst Ron Reagan and Viet Dinh, former assistant attorney general in the Bush administration and one of the main authors of the Patriot Act.

The charge there, I take it, Viet, is that he doesn‘t like the fact that the president in his State of the Union address, talked about how two people were involved in 9/11, two of the 19 hijackers, the killers of 3,000 Americans, were on the phone.  And he‘s giving away information we have that wasn‘t in the public arena before.  Is that what he‘s talking about?

VIET DINH, FORMER ASSISTANT ATTORNEY GENERAL:  No, I think what Director Goss is referring to is the persistent leak of classified information of operations that may or may not have been happening. 

MATTHEWS:  Isn‘t the president doing some of that by talking on television before 50 million Americans and the world about different things we‘ve picked up about these hijackers from our surveillance?

DINH:  I think once we have the unclassified information leaked to the public, I think that enters the public debate and of course the president will have to convince the American people what exactly is a product of these activities that garner. 

But what Porter Goss is talking about is the very serious deprivation of intelligence that we do not get from our counterparts across the world, independent of the source and methods that we use, because over half of our intelligence comes from our friendly services.  And they simply cannot trust us to keep it private and keep their sources and methods private.

MATTHEWS:  Ron Reagan—Jay Rockefeller, the ranking Democrat on intelligence, said today that the CIA is getting politicized.  What do you make of that?  In other words, it used to be something of an independent agency in the old days, the Allen Dulles days.  You had to keep control, and now it‘s become sort of a Dick Cheney operation, where he puts his people in there like Porter Goss.

RON REAGAN, MSNBC POLITICAL ANALYST:  Well I think that became obvious in the run-up to the Iraq war, where you had George Tenet cherry picking intelligence.  Your other guest mentioned foreign intelligence that we got. 

Some of the intelligence that we got from them, they disavowed before we went into Iraq.  They told our people, our CIA operatives, don‘t use this information about the aluminum tubes, for instance or meetings with—supposed meetings between Saddam Hussein‘s people and al Qaeda. 

Don‘t use that, it‘s no good.  But we went ahead and used it anyway, even though they were telling us differently.  So yes, it has become politicized and that‘s a very dangerous thing for this country as we‘ve seen. 

MATTHEWS:  Let me ask you about power.  What right does the president of the United States have in wartime?  In other words, when we‘re under attack, like in the first several months after 9/11, when everyone admitted he had to do something big.  Does he have the right to basically use the second article of the Constitution, say, “I‘m commander-in-chief, I‘m going to defend the country, whatever it takes?”

DINH:  No question.  It‘s not only his right under the Constitution, but also Congress has delegated authority when it authorizes him to use all reasonable force in order to defend America and repel the attacks that constituted 9/11.  And so not only does he have inherent authority under Article II of the Constitution, but also Congress has delegated authority as commander-in-chief and also as the Congress‘s and the government‘s agent in a time of war.

MATTHEWS:  Ron, what‘s wrong with the president being commander-in-chief when we‘re under attack?

REAGAN:  It‘s fine for him to be commander-in-chief, but he doesn‘t have the right to break American laws.  Congress makes the laws.

MATTHEWS:  But Viet just said that the law was written by Congress, a resolution in 2001 saying the president must act to defend the country, whatever it takes.

REAGAN:  Well that‘s all well and good but they didn‘t say, “and you can institute warrant less wiretaps on American citizens.”  There was nothing in that resolution about that, but the president simply interpreted it that way.

We have an administration now where the president is essentially saying “you can pass whatever laws you want, but in signing statements, I will interpret those laws as I please.  And so they will become what I say they are.”  That‘s not the way the American government is supposed to work. 

MATTHEWS:  I wonder how broad this authority is the way you read it.  If—there‘s a left-wing group out there, a group that‘s very critical of this administration and they‘re out there protesting Halliburton or any of the other targets of this war politically—is the president allowed to see whether these groups are seditious or not?  Should he be allowed to just check on what they‘re saying on the telephone?

DINH:  Absolutely not because...

MATTHEWS:  ... but you said he could do what it takes.

DINH:  The authorization for force was to aim at and repel against those persons who were responsible for the September 11th attacks.  That‘s al Qaeda, that‘s the al Qaeda sympathizers throughout the world.  The program that we‘re talking here, to be very clear, is limited to transnational, international communications where one party is outside of the United States and also where intelligence information indicates that one party in the conversation is an al Qaeda agent or sympathizer.

MATTHEWS:  OK, you say that this Defense Department intelligence

operation that picked this was bugging this demonstration against

Halliburton when they were handing out peanut butter and jelly sandwiches -

you‘re saying that was outside what they‘re entitled to do? 

DINH:  I do not know the details of this particular program, but certainly the terrorist surveillance program, as the facts have been confirmed by the government itself, seems to be reasonably calculated to the use of force.

MATTHEWS:  So no political snooping?  No snooping about American politics, period?

DINH:  No of course not, of course not.  It has to be related to the commander-in-chief‘s power and according to the delegation and the use of force, it has to be that it‘s not—the Congress authorizing the use of force doesn‘t mean force, but nothing short of force, because obviously there are many steps that Congress can authorize for force.

MATTHEWS:  I have to say, our viewers out there, Ron and Viet, they said that was the most important topic, and they said that day after day on our site, that they want to hear more about it, is this NSA spying, and if people really are on left and right—the president may be winning the argument right now, but there‘s a long-term concern in this country as we all know from the Nixon era and the Bobby Kennedy era, about tapping people‘s phone lines. 

Anyway, thank you Ron Reagan and Viet Dinh.  Up next, President Bush versus the strawman, is oil the latest enemy he‘s concocted to make a political point?  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(MARKET REPORT)

MATTHEWS:  The president today again crisscrossed the country trying to sell the nation on the priorities he outlined the other night in the State of the Union, but this week the president has been deploying a previously reliable but controversial way of framing his arguments.  HARDBALL correspondent David Shuster reports. 

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE:  Mr. Speaker, the president of the United States. 

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Over the last six years, President Bush has often framed his agenda in terms of fights.  Call it an us versus them approach to winning.  Six years ago, the enemy was the muck of the Monica Lewinsky scandal. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I will swear to uphold the honor and the integrity of the office to which I have been elected, so help me God. 

SHUSTER:  In a buildup to the Iraq war, the president‘s enemy was Saddam Hussein. 

BUSH:  There‘s a lot of Democrats in Washington, D.C. who understand that Saddam Hussein is true threat. 

SHUSTER:  And the president‘s us versus them strategy heightened as the insurgents, the newest enemy, gained ground in Iraq. 

BUSH:  My answer is bring them on. 

SHUSTER:  Now the issue is energy, and the president‘s enemy in this battle is oil. 

BUSH:  America is addicted to oil, which is often imported from unstable parts of the world.  The best way to break this addiction is through technology. 

SHUSTER:  But Vice President Cheney once ridiculed energy conservation.  Quote, “conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy.”

Democrats point out the administration‘s 2006 budget cut renewable energy programs.  The Bush critics are accusing the president of implying campaign tactics instead of solutions. 

SEN. JOHN KERRY (D-MA), FMR. PRESIDENTIAL CANDIDATE:  They‘ve had five years in office, and they have not, even when they passed an energy bill, done what‘s necessary to make America truly energy independent. 

SHUSTER:  The argument that the president is manufacturing an opponent or cartooning his critics can also be applied to his defense of the war in Iraq. 

BUSH:  The United States will not retreat from the world and we will never surrender to evil. 

SHUSTER:  But that suggests those who oppose the president‘s Iraq war policy advocate a policy of appeasing terrorists. 

On the NSA spying program, the president‘s us versus them approach came out this way. 

BUSH:  If there are people inside our country who are talking with al Qaeda, we want to know about it because we will not sit back and wait to be hit again. 

SHUSTER:  But the issue for Bush critics is not whether there should or should not be surveillance, but whether the law requires courts to have a role.  And as it stands, the administration can spy for up to three days before even notifying the courts. 

Other presidents have also used language to make opponents seem reckless or irresponsible.  During the Monica Lewinsky scandal, President Clinton blamed the distraction on his critics. 

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES:  It is time to stop the pursuit of personal destruction, and the prying into private lives and get on with our national life.  Our country has been distracted by this matter for too long. 

SHUSTER:  In 1992, president George H.W. Bush left this impression about Clinton, his presidential campaign opponent. 

GEORGE H.W. BUSH, FORMER PRESIDENT OF THE UNITED STATES:  Well don‘t let anyone tell you that America is second rate, especially somebody running for president. 

SHUSTER:  But the style of this President Bush and his accusation that his critics are defeatists, exposes him to attacks like these. 

REP. JOHN MURTHA (D), PENNSYLVANIA:  You keep mischaracterizing where this war on terrorism is from.  This is a civil war in Iraq.  What he said one time was a statement about the brutal enemy in Iraq, the brutal enemy is the Iraqis.  The Iraqis have an election now and 80 percent of them want us out of here. 

SHUSTER (on camera):  And according to the latest NBC News/”Wall Street Journal” poll, 39 percent of Americans now disapprove of the president‘s job performance.  The question is, will his bullying rhetoric lift those numbers or drop them even further? 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster. 

We‘re joined right now by former presidential adviser David Gergen, and editor-in-chief of “The Hotline,” Chuck Todd.  David, thank you for joining us. 

This style of division—they‘re the bad guys on that side, they‘re the defeatists on that side, we‘re the good guys over here, we want to fight oil reliance on the Third World or on the Middle East, they don‘t—is this smart? 

DAVID GERGEN, FORMER WHITE HOUSE ADVISER:  Well, it‘s work and worked in politics for thousands of years.  You know, it goes all the way back to the Greeks.  The whole point of political argument frequently is the person who gets the upper hand by defining the terms of the debate.  Is it fair?  No, it‘s not fair usually, but is it smart?  It often works. 

Now in this case, I think going after big oil—I don‘t think he was going after big oil.  After all, he and Dick Cheney are both oil men and I think that would be the height of hypocrisy. 

But I do think he‘s set up a straw man on the question of retreat versus going forward with his program, as if, you know, if you don‘t like what I‘m doing, that must mean you‘re a retreatist or you‘re a declinist or you‘re a protectionist or whatever it is he wants to say.  I mean, he‘s been using all of those ideas. 

MATTHEWS:  Right, you‘re a wuss, basically.  You know ...

GERGEN:  You‘re a wuss, that‘s right.

MATTHEWS:  You‘re a wuss on energy, David.  And Chuck, you know, the last time we had an energy policy it was written by a group of men in secret.  Fair enough.  I mean, they won their argument in the courts.  They were allowed to meet in secret, but they were all oil guys.  There were no Democrats in the room. 

And now he‘s saying having not let the Democrats, even in the room, even seeing the people advising them on oil policy, he says why don‘t we get together?  Like Hayley Mills, let‘s get together, yes, yes, yes.  Does anybody really believe that oil patch guys want to get together with people from New York and Massachusetts and write oil policy?

CHUCK TODD, “THE HOTLINE”:  Well not only that, they just did this.  They just had an energy bill and it was not easy to get done and they were all these special—you know, the way this town—they‘re not going to open up and do this again.  This Congress—I mean, it was totally about rhetoric and making people feel good that somehow the administration gets it, OK, we know, because I think energy, the energy issue is going to be a big issue in ‘06 -- could be one of the three biggest issues in ‘08 because...

MATTHEWS:  ... Well Exxon just announced a $33 billion profit this year.  Is that what he‘s talking to?  He‘s trying to bring down the notion that they‘re in bed with the oil industry, which was making all this money?

TODD:  I think a little bit, because you know, a lot of the groups have been attacking the oil companies for seeming that they always seem to be able to make money, whether they look at their heating bill and they think, “Geez, I‘ve saved money on my heating—I used less heat this month and I‘m still paying the same amount of money.”

MATTHEWS:  David, I got Don Evans on the show a few minutes ago and I think he was caught up in having to defend, I‘ll go with you, Chuck, defend the apparent connection between the war in Iraq and oil, to the extent that the president said we can no longer defend on unstable areas of the world, I guess.  He‘s talking about the Middle East—for our oil supplies.

David—Don Evans was just denying that there was a connection between the president saying we can‘t rely on unstable areas of the world, meaning the Middle East obviously for oil anymore and any suggestion that that means that we wouldn‘t have to fight wars over there.

And I reminded him and you remember this, James A. Baker III, the former secretary of defense, saying in the first—or secretary of state in the first Bush administration of his father—the reason we‘re fighting the war in Iraq, because of the invasion of Kuwait, was, quote, “jobs, jobs, jobs.”  So now they don‘t like that connection anymore between the economy and war.  Why are they stepping back?

GERGEN:  It perplexes me because the whole point of the president‘s argument about giving up our addiction to oil is that we don‘t want to get drawn into any more conflicts over there, we don‘t want to be beholden to the various countries.

You know, we can‘t be beholden, we can‘t—our policy in Iran can‘t be dictated by oil.  We‘ve got a problem with Iran over nuclear power, but we don‘t want to be in a situation where we have our hands held back. 

Here‘s our dilemma, Chris, with Iran.  If we put the real squeeze on Iran, they cut the oil off, the price is going to go through the roof, it could throw this country into a recession, it could throw Western Europe into a recession. 

So there‘s a real fear about being too tough on Iran.  That means that we are being held back from what we want to do on nuclear power—nuclear capability because of our dependence on oil.  That‘s why we‘ve got to stop using these countries like filling stations.

MATTHEWS:  We‘ll be right back with David Gergen and Chuck Todd.  And a reminder, “Decision 2006” is only on MSNBC.com—that‘s our dot.com.  And tonight, read Tom Curry‘s scoop on potential 2008 Democratic presidential contender Evan Bayh.  Who‘s urging his party to take on Karl Rove‘s charge that Democrats are weak on national defense?  I guess it‘s Bayh.  Just go to MSNBC.com.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with David Gergen and Chuck Todd.  David, what do you make of the decapitation, the coup de tat on Capitol Hill today, that Republicans having gotten rid of Tom DeLay, now got rid of his guy, Roy Blunt?  They‘ve got a new man out there, John Boehner, who has no connection to the history of the leadership?

GERGEN:  Well he does not, Chris, but I don‘t think it solves their reform image problem.  They clearly dropped Blunt because they thought he was that close to DeLay, and they‘re looking ahead to the elections and as Chuck will tell you, this is going to be a big issue in the fall for the Democrats.

So they wanted to get away from it, but they didn‘t go all the way to a reformer.  John Boehner, they got another Republican, a Newt Gingrich ally.  Boehner really did well during the Newt Gingrich years, he fell from grace and now he‘s back.

He‘s well-liked on Capitol Hill.  He also has a reputation of being a little too close to the lobbyists, even though he was against earmarks, he is the guy who—he‘s apologized for it now, but he‘s the guy who was giving out tobacco checks at one point in the 1990s on the floor of the House of Representatives.

MATTHEWS:  Wow.

TODD:  Yes, no, he‘s—David‘s right.

MATTHEWS:  I like the way Gergen operates.  He put that shiv in really good.  Everybody else forgives and forgets, but not Gergen.

TODD:  Give Boehner credit, he‘s never personally put in an earmark.

GERGEN:  That‘s right.

TODD:  That says a lot, considering how much...

MATTHEWS:  ... Can a party save itself by completely regenerating itself right before an election or do the people still remember Abramoff, all these problems with Duke Cunningham, probably more indictments to come, Robert Ney is under the spotlight, Bill Jefferson is in big trouble.  Bill Jefferson‘s a Democrat, but generally it‘s a Republican problem.

TODD:  I think what it does do though is it allows a Republican member

first of all, John Boehner said this himself today.  The reason he won is because members actually do fear they could lose control of the House. 

They‘re actually more worried about it than Democrats are confident that they could actually win control of the House.  So you know, clearly there are some nervous incumbents.  But now at least they can say, “You know what?  You‘re right.”

And when the Democrats use Tom DeLay to beat him over the head and say “You know what?  If Tom DeLay—we don‘t have him there anymore.  We moved him out, we moved his guys out.”  At least it gives them a shot at saying that.  But I‘m not convinced corruption is going to—it‘s not popping up as the No. 1...

MATTHEWS:  It‘s at the bottom of the list for NBC, we checked the numbers, the national polling, bottom, way at the bottom of everything else in the single digits, was lobbying firm.  David, do you think the average person out there cares whether their member of Congress gets a $50 dinner or a $30 dinner?

GERGEN:  Oh absolutely.

MATTHEWS:  You think they do. 

GERGEN:  Yes, I do think they do.  And I think it‘s the kind of thing that‘s easily understood.  You get a couple of more guys indicted here over the next few months and the Democrats are going to use it as a club against the Republicans.  Of course they‘re going to do that.  You know, the House bank story really hurt the Democrats.  There was a real sense by the end of the Democratic rule that there was a lot of corruption among Democrats.  Power corrupts; absolute power corrupts absolutely—and it adds to this notion that you need to have somebody else—you can‘t have—you can‘t leave Washington in the hands of one party (INAUDIBLE). 

MATTHEWS:  David, who wins the House race this fall?  The Republicans lose control or keep it? 

GERGEN:  I think they keep it right now, but it‘s more problematic than it was a year ago, and I think the Senate is where the real movement comes. 

MATTHEWS:  OK, Chuck, you want a piece of this?  Who holds the House? 

Republicans, or the Democrats pick it up, pick up the pieces?

TODD:  As long as there aren‘t 10 or more retirements, Republican retirements in the next two months, which is possible, Republicans are going to probably hold. 

MATTHEWS:  After all this? 

TODD:  After all this, because the playing field is too—I mean, you just got to play—the playing field is just too small, but you see some guy starting to retire, which... 

MATTHEWS:  We got too much gerrymandering in this country.  Too much. 

The public doesn‘t get to vote anymore.  It‘s unbelievable. 

Thank you, David Gergen.  Thank you, Chuck Todd.

When we return, behind the scenes at the House Republican leadership vote today.  What an inside story that‘s going to be.  Much more on today‘s coup d‘etat when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Congressman John Boehner won a surprising secret ballot victory over Tom DeLay‘s protege—I love that word—Roy Blunt in today‘s House Republican leadership vote.  It was a big upset.  NBC News congressional correspondent Mike Viqueira is sitting with me right now, as well as (INAUDIBLE) “Roll Call‘s” Mary Ann Akers, who were there and followed this behind closed doors. 

Now, I want to ask you because you followed this.  Maybe you‘re not sitting next to the people voting, but you know the politics of the Hill.  Tell me why Roy Blunt, who people used to say position is everything.  He had the job, he was sitting there, able to manipulate and cut deals with everybody.  He lost. 

MARY ANN AKERS, ROLL CALL COLUMNIST:  Yes, I think in the so-called culture of corruption that Democrats have dubbed, that Republicans really wanted a new face.  Now, Boehner‘s not a new face, he has been around for a long time, as you know, but he‘s not been in the leadership recently.  So Roy Blunt has—this is the new face.  And people really lined up behind him. 

MATTHEWS:  So what‘s the story on this guy, John Boehner?  He has a tan all the time, right?  I mean, is this from (INAUDIBLE), or is this from golf or what?  I want to know more about this guy, because the last guy that was the leader was Tom DeLay, who was notorious for golfing at St.  Andrews?  Do we have a golfing problem here?

VIQUEIRA:  Oh, we do, four handicap, Chris.

MATTHEWS:  He‘s really good. 

VIQUEIRA:  Yes.  As a mater of fact, he and DeLay...

(CROSSTALK)

VIQUEIRA:  ... were said to be the two best golfers in the House.  I‘m sure there‘s going to be people—Dan Burton might call and dispute that notion. 

MATTHEWS:  But it‘s not the Saturday and Sunday golfing we‘re talking about here, it‘s the weekday stuff? 

VIQUEIRA:  Well, as a matter of fact, John Boehner belongs to which country club?  Burning Tree in Bethesda, men only.  It‘s been controversial in the past. 

You know, what we have here is Roy Blunt encountered some resentment.  He was viewed as overly ambitious, rising too quickly, not that great a whip. 

MATTHEWS:  Wasn‘t the Hammer behind him, though, in the back room there today?  Wasn‘t Tom DeLay pushing for him? 

VIQUEIRA:  I don‘t see Tom—I do not think that Tom DeLay had that much influence in this election, Chris. 

MATTHEWS:  He‘s done?  

VIQUEIRA:  I think he‘s yesterday‘s news and today‘s (INAUDIBLE) paper for the time being, anyway.  I just do not think that he was a big player. 

MATTHEWS:  Are you saying that yesterday‘s peacock is today‘s feather duster?  Is that what you‘re saying?

VIQUEIRA:  No, I didn‘t say that at all.  As a matter of fact, I don‘t know what you‘re talking about. 

MATTHEWS:  That‘s another expression.  Since we‘re into cliches.

But no, Tom DeLay is out; Boehner is in.  What does that mean for the country in terms of tax policy, energy policy?  He‘s a northerner, he‘s from Ohio. He‘s an energy consumer.  He‘s from a frost belt state—frost belt state.  In other words, he thinks differently than the Bush-Cheney crowd, right? 

AKERS:  Right.  Actually, he came out of the Gingrich mold.  Remember, he was part of the Contract With America, very tight with Gingrich.  And he‘s chairman of the Education Committee, so he‘s, you know, very plugged in there. 

MATTHEWS:  There is two kinds of Republicans today, Mary.  There is the traditional, Barry Goldwater people, that really want fiscal responsibility, lower deficits, less commitments around the world.  Basically, the old style conservative who believes in less government, less taxes.  Then there‘s the guy who can‘t wait to get to be a committee chairman, so he can have pork, so he can have earmarking, so he can live like a king fish down there.  Which one is Boehner? 

AKERS:  Well, I think that Boehner right now is not going to be an earmark guy, because earmarks are out of style right now.  And that‘s part of the whole (INAUDIBLE)...

(CROSSTALK)

MATTHEWS:  And so—but is he by nature one of the old bulls, the kind of guys that love to run the Washington politics no matter what party they‘re in, or is he a true conservative?  Mike.

VIQUEIRA:  Two things.

MATTHEWS:  Is he a true conservative?

VIQUEIRA:  Yes.  But he‘s a conservative in the sense that he opposes big government.  He‘s a fiscal—low fiscal spender.  He is against earmarks.  He does not accept pork in his district...

MATTHEWS:  He sounds like a solution to the problem.

VIQUEIRA:  But no, the thought that John Boehner is a reformer when it comes to lobbyists is kind of a notion that gets a lot of snickers on Capitol Hill. 

MATTHEWS:  Because he...

(CROSSTALK)

MATTHEWS:  ... stack of money...

(CROSSTALK)

MATTHEWS:  Explain that one.  Tell me that story, Mary Ann.  David Gergen, who was just on here, he alluded to the fact that there was an episode in which John Boehner, the new Republican leader, was walking around the House floor handing out checks from the tobacco industry. 

AKERS:  Well, yes, I was talking to one lobbyist today, and this was before the election took place, and I predicted, by the way, that John Boehner would win.  And he said, you know, he thought he would win, too, on a second ballot.  But he said but, come on, the notion that he‘s the reformer makes me laugh.  He was handing out tobacco checks on the House floor.  So that story keeps coming up over and over again. 

But Roy Blunt had a bigger problem.  A lot of members are saying that Roy Blunt‘s problems in Missouri, the money swap problems that he has had in Missouri...

MATTHEWS:  What‘s a money swap?

AKERS:  Well, they‘re saying, you know, his son, obviously, who‘s a lobbyist, and money going in one place and coming out another, which is what Tom DeLay has been indicted for in Texas. 

MATTHEWS:  Oh, you mean soft money for hard money, that kind of thing? 

That doesn‘t affect people directly. 

Let me ask you, will Boehner be a star? 

VIQUEIRA:  You know, there‘s not that much that‘s going to happen in the House of Representatives this year, Chris.  You know, the House Republican Conference elected him because he is telegenic...

MATTHEWS:  OK, then I‘ll ask a simpler question. 

VIQUEIRA:  All right.

MATTHEWS:  Will John Boehner lead the Republican majority to hold the House this fall? 

VIQUEIRA:  I think that‘s out of John Boehner‘s control.  I think he‘ll be a better representative because it does have this patina of change. 

MATTHEWS:  OK, now—do they have a better chance of holding the House now they got a new leader?

AKERS:  Yes, I do.  I absolutely think they do.  With DeLay out of the picture, they certainly do. 

MATTHEWS:  Mike Viqueira, Mary Ann Akers, thank you both for joining us.  A hot day of the Hill.  Big coup d‘etat.  Nobody expected this.

Join us again tomorrow night at 5:00 and 7:00 Eastern for more of the HARDBALL Hotshots.  That‘s tomorrow night.  That‘s Friday, and it‘s fun. 

It‘s time for “THE ABRAMS REPORT” right now with Dan.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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