updated 4/20/2006 10:32:27 AM ET 2006-04-20T14:32:27

Guest: Dan Bartlett, Eric Bates, Howard Fineman

CHRIS MATTHEWS, MSNBC ANCHOR:  Tonight, shoot the messenger.  Let's play HARDBALL.

Good evening, I'm Chris Matthews and welcome to HARDBALL.

In the immortal words of Cool Hand Luke, “Gentlemen, what we have here is a file you're to communicate.”  Today, White House Press Secretary Scott McClellan resigned from his post, but is President Bush shooting the messenger when it's really his own message that's been shot to hell. 

A U.S.A. Today-Gallup poll shows that the majority of Americans disapprove of the president's handling of the war in Iraq, terrorism and the economy, health care, energy and immigration, every issue that seems to matter to voters, they don't like his performance in.  Also today, the White House announced Karl Rove would be living giving up policy to focus on politics.  Is this really about politics or just polls.

Today we get to the bottom line with Cheney, Rummy, Condi and Rove still steering the ship of state, has the president really shaken up anything?  HARDBALL's David Shuster has this report. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Facing record low approval ratings and midterm elections less than seven months away, the president made changes today, targeting two of his most visible aides. 

Administration officials say Karl Rove is giving up oversight of policy development to focus more on the elections.  Rove's policy duties are being handed to Joel Kaplan, a former deputy of the new White House Chief of Staff Josh Bolten.  

And Scott McClellan stepped to the microphones with President Bush and said. 

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY:  Good morning everybody.  I am here to announce that I will be resigning as White House press secretary.  The White House is going through a period of transition.  Change can be helpful and this is a good time and good position to help bring about change. 

SHUSTER:  The president said McClellan handled his job with class and integrity. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  It's going to be hard to replace Scott.  But nevertheless, he's made the decision, and I accept it. 

SHUSTER:  McClellan accepted the job of press secretary in the summer of 2003 just as it was becoming clear there was no WMD in Iraq, and new questions were being raised about the administration's case for war.  And in the midst of it all, Americans learned Patrick Fitzgerald was investigating the White House leak that blew the cover of CIA operative Valerie Plame, the wife of administration critic, Joe Wilson.

MCCLELLAN:  If anyone in this administration was involved in it, they would no longer be in this administration. 

SHUSTER:  McClellan was asked specifically about the possible involvement of Rove and Vice President Cheney's chief of staff, Scooter Libby. 

MCCLELLAN:  I have made it very clear that it was a ridiculous suggestion in the first place.  I've said this it's not true and I have spoked with Karl Rove. 

SHUSTER:  But last summer, after Rove went to the grand jury and testified he was involved, McClellan got pummelled. 

DAVID GREGORY, NBC WHITE HOUSE CORRESPONDENT:  Scott, this is ridiculous.  You stand by your remarks from that podium or not? 

MCCLELLAN:  David, there will be a time to talk about this, but now is not the time to talk about it. 

SHUSTER:  The stonewalling prompted questions like this. 

QUESTION:  Now that Rove has essentially been caught redhanded, peddling this information, all of a sudden you have respect for the fact that he did the criminal investigation? 

HELEN THOMAS, SYNDICATED COLUMNIST:  Has he apologized to you for telling you that he was not involved? 

MCCLELLAN:  Helen, I'm not going to get into private discussions. 

THOMAS:  He put you on the spot.  He put your credibility on the line. 

SHUSTER:  McClellan's credibility also got hit in the Jack Abramoff lobbying scandal. 

MCCLELLAN:  The president does not know him nor does the president recall ever meting him. 

SHUSTER:  But the White House acknowledged later acknowledged that the president and Abramoff were photographed together on a dozen different occasions, and Abramoff said the president asked about his children.   

This winter it fell to McClellan to explain to an exasperated press corps why Vice President Cheney waited a day to disclose his hunting accident.

MCCLELLAN:  The vice president thought that Mrs. Armstrong should be the first one to get that information out since she was an eyewitness. 

QUESTION:  I just want to clarify one thing.  Is it appropriate for a private citizen to be the person to disseminate the information that the vice president of the United States has been—has shot someone. 

MCCLELLAN:  That's one way to provide information to the public. 

SHUSTER:  Just two weeks ago, there was the revelation President Bush himself authorized Scooter Libby to leak Iraq intelligence to a selected reporter, ten days before McClellan said it was officially declassified. 

MCCLELLAN:  Again, you're asking me to get into the timing.  I'm not backing away from anything that was said previously.  That's when the document was released. 

SHUSTER:  While McClellan was often criticized for his answers, he was rarely criticized personally.  McClellan was in the tough position of trying to speak for an administration that is exceptionally guarded, and on many occasions the information McClellan got from colleagues, including Karl Rove, was either inaccurate or misleading. 

Still, Republicans in Congress have been demanding changes in White House communications.  Ironically, after McClellan and President Bush today boarded Marine One, a communication system failed, forcing the president and his spokesman to wait for a motorcade. 

(on camera):  The White House intends to announce Scott McClellan's replacement in the next few weeks.  As for Karl Rove, officials say he will start focusing on the midterm elections immediately. 

The question is weather even the most skilled strategist or communicator can put a good face on presidential policies and actions that most Americans now dislike.  I'm David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  I'm talking right now to Dan Bartlett, who is communications director at the White House.  Dan, thank you for joining us from the White House.  I was thinking of getting ready for this interview with you that one of the promises made before the war with Iraq was that somehow the oil revenues of that tremendously oil rich country, Iraq, would pay for the war itself.   

Let me quote you from the deputy secretary of defense, Paul Wolfowitz.  There's a lot of money to pay for this that doesn't have to be U.S.  taxpayer money, and it starts with the assets of the Iraqi people, and on a rough recollection, the oil revenues of that country could bring between $50 and $100 billion over the course of the next two or three years.  We're dealing with a country that can really finance its own reconstruction and relatively soon. 

That was the 27th of March, 2003, as we were entering that country. 

Has that been a promise that has been kept? 

DAN BARTLETT, COUNSELOR TO PRESIDENT BUSH:  Obviously it's a promise that has a lot of challenges because of the insurgency on the ground.  The fact of the matter is there are a lot of resources there in that country that's going to help really shape the future of Iraq for the Iraqi people, and as we improve on the security situation, the insurgency gets dealt with, mainly through a political process in which there is a unity government, those type of revenues will be used not to enrich the regime of Saddam Hussein, but to enrich the natural resources of Iraq and of the Iraqi people themselves.

So, over time, we do believe that a major funding source for the future of Iraq and the Iraqi people will come from their oil resources. 

MATTHEWS:  Has the president ever said that the Iraqi people owe us for the reconstruction of their own country or have we already given it to them as a complete grant.  Has he ever said what you just said, that there going to have to start paying the cost of this.  I've heard numbers, you have too.  You know the numbers better than I, $500 billion, a trillion dollars over a number of years.

This cost has come directly to the American people and also we've been stuck with higher gas price.  That was another promise made, that this war would help us get cheaper gas.  None of these promises come through. 

BARTLETT:  That's not correct.  The president or no one else never said that the war was going to result in cheaper gas prices.  The president said is we're going to make an enormous commitment to liberate the Iraqi people, it's going to be for the better security of the American people and its going to be for the betterment of the Iraqi people. 

No question there's been some tough times.  There's no question that this has cost a lot, both in lives and in treasure, but these have been necessary costs, Chris, ones that will make our country safer and make the Iraqi people and that entire region in the Middle East a better place over time.  A lot of sacrifice is going to be made. 

Future sacrifices are going to be required, but it's all for the better, Chris.  And we recognize that there's a lot of people who don't believe what we're doing as the right thing.  But this president, despite all the challenges we have faced, does believe we are doing the right thing.  It is worth the cost of taxpayer dollars, it is worth the sacrifice of our men and women of the armed services, and we'll continue to stay there and fight until we win. 

MATTHEWS:  Just to make it official, Dan.  No one in the administration has ever said that we would have cheaper gas because of the war in Iraq, just to make it official? 

BARTLETT:  I don't recall anybody ever saying that.  What we have said is that the resources for Iraq, the oil resources there, that was not the motivation of going into Iraq.  The motivation was to rid that country of a brutal dictator that was a threat to the American people and we have done that.  Now the resources that are there are there to help enrich the Iraqi people, it is going to help build their future and that is a good thing for America and a good thing for Iraq. 

MATTHEWS:  Let me go out to a couple points here.  First of all, what did you make of the report that came in the papers about a week ago that Josh Bolten, the new chief of staff, was going to shake up your communications department. 

BARTLETT:  Well, I think there's been speculation about the areas in which they're going to shake up.  What President Bush asked Josh Bolten to do was to set forth a team that will help the president achieve big things during the last 1,000 days of his presidency.  And what we're seeing now is process unfolding in which Josh will begin making decisions about what is the best team moving forward.

The situation with Scott McClellan, he served this country and this White House very well during very difficult times.  This is not an indication that he did a poor job.  This is just an indication that it's time for a new team to come in and help the president sprint to the finish. 

MATTHEWS:  One of his most strongest—rather his strongest declarations over the years was in 2003 in the fall when the CIA leak investigation was undertaken, and he said it was a ridiculous suggestion that anyone in the White House had anything to do with leaking the identity of Valerie Plame, the CIA undercover agent. 

Was that a phrasing that you were part of?  Where did he get the phrase, ridiculous suggestion, when it turns out, of course, that two top aides to the president, one being Scooter Libby, the chief of staff to the vice president, and of course Karl Rove, were later on identified as people who talked to the press giving away the identity of that agent.

Where did he get the phrase, ridiculous suggestion?

BARTLETT:  Chris, I'd love to be able to go into a lot of detail about the events that unfolded, but the fact of the matter is, this is still a process that is under investigation, there is a actual judicial process unfolding when it comes to Scooter Libby, so it wouldn't be appropriate for me to talk about this with you this evening. 

I wish I could.  Scott McClellan said things for very good reasons at the time, and he has made clarifying comments as he's been able to do in the context of this investigation as we've gone forward, and I'm just going to have to leave it at that. 

MATTHEWS:  You mean, there's a legal implication to admitting that the White House staff wasn't quizzed by the president and the top staff people about whether they had, in fact, leaked or not? 

BARTLETT:  Well, what we set forth in the very outset of this investigation is that we were not going to do an internal investigation, that's why an outside prosecutor was charged with doing this investigation, so the very things you're suggesting he should have done weren't done for very good reason. 

There was an outside special prosecutor focused on this, a person of high integrity, and who's doing a very thorough job and we're going to leave those questions to be answered by him. 

MATTHEWS:  You know, awhile ago, Dan, I got to interview the secretary of defense.  He's a very charming guy and he was nice to give us an interview over at the Pentagon.  And I asked him one of those obvious questions that always seems to produce pay dirt because they always have strange answers. 

The most obvious question gets a surprise answer, because I thought he had a big part in advising the president on whether to go to Iraq or not because he had such strong people behind him at the Defense Department. 

And I asked him, did the president ever ask you whether we should go to war with Iraq?  And he paused in that way of his, and he said, actually, he never did ask me and I thought that was a bit odd.  What do you make of that? 

BARTLETT:  Well, different presidents have different management styles.  The president has been in countless meetings in the preparation for the decision he made with regard to removing Saddam Hussein from power.  He knew very well the positions and the beliefs and the concerns that each of his cabinet members, his national security team members, had when it came to the issue before them. 

They looked at all the different scenarios, war plans, consequences, diplomatic strategies—all those things were decided, but ultimately the decision is the president's decision.  And to suggest that the president didn't know what the thinking of his national security team, I think is a bit misleading.  Did he, you know, literally ask the question the way it was described to Secretary Rumsfeld?  I don't know.  But I can tell you ...

MATTHEWS:  But doesn't that surprise you, Dan, that he never asked him? 

BARTLETT:  No, because I know that's not the case.  What is important

is did the president have the views of his cabinet, does he have the views

·         enough information to make such a solemn decision that he had made, and I feel like he did.  I know he had the information he needed to make a right decision. 

Now, that's not to suggest that everything has gone according to plan. 

No plan stays the same when it meets the enemy.  Everybody recognizes this.  This has been very difficult.  There have been things that have surprised us, namely the fact that we didn't find the weapons of mass destruction.  There was no one more surprised about that than this president. 

The fact of the matter, he's acknowledged that.  He said that we need to reform our intelligence communities.  There have been other things that have happened.  We've had to change our strategy on training Iraqi security forces.  We've changed the way we've done reconstruction in that country. 

We are adapting, but we went in with some certain beliefs and assumptions, a lot of them based upon our last actions in Iraq, which was in 1991, and a lot of the things didn't turn out to be true. 

We preventing a lot of things from not happening by planning—refugee crisis, burning of the oil fields, et cetera—so a lot of things went well.  Others things haven't gone well and that's the nature of war. 

MATTHEWS:  Thank you, Dan Bartlett, counselor to President Bush.

Let's go now to NBC chief White House correspondent David Gregory.  David, thank you for joining us.  Dan Bartlett there twice denied that the White House ever tried to make the case for war.  One of the cases they made for the war with Iraq is it would give us cheaper prices at the pump. 

Well, our staff has dug this up.  This was a case made by Lawrence Lindsey, who was chief economic advisor to the president in the months before the war in the fall of 2002.  Very directly he made the economic case for the war would be cheaper gas prices. 

“Under every plausible scenario,” he said, “the negative effect economically would be quite small relative to the economic benefits that would come from a successful prosecution of the war.  The key issue is oil, and a regime change in Iraq would facilitate an increase in world oil, which would tend to lower oil prices for us.” 

He's been caught there.  Dan Bartlett denied that.  He, in fact—his White House did, in fact, promise we'd get cheaper gas right now at pump.  They've got two big problems:  the Iraq war deteriorating in hopes now, and, of course, rising gas prices.  What do you make of that?

DAVID GREGORY, NBC NEWS CHIEF WHITE HOUSE CORRESPONDENT:  Well, I think what that speaks to is what the overriding goal was, was that a stable Iraq could really transform that region and have the kind impact on oil supplies and world markets that Larry Lindsey is talking about there that simply hasn't come to pass, because, I think as Dan Bartlett referenced in the interview that you just did with him, that there is no stability in Iraq.

MATTHEWS:  Right.

GREGORY:  And the president and his team didn't think they would necessarily be here at this point, but they're still dealing with a deadly insurgency long after they said that hot combat was over. 

MATTHEWS:  So they explained one failure of prediction with another failure of prediction.  The gas prices are not going down because they didn't predict the insurgency. 

GREGORY:  Well, the bottom line is that there isn't stability, political or security or otherwise, or on a resource basis in Iraq.  All of those things are continuing to undermine the policy. 

MATTHEWS:  David Gregory, you're one of the most aggressive—I think the sharpest White House correspondent working today.  Was McClellan fired or did he quit? 

GREGORY:  Well, I think that, you know, two years on the job is a long time to be there, so I think it's a combination of things.  I think that Scott wanted to move on by this point, but I think there's little question that he is leaving at a time when a lot of Republicans who advise this White House, and some inside, recognize that they needed a new face.  Policy around here is not really going to change, Chris.

MATTHEWS:  Right.

GREGORY:  But style, energy, effectiveness, as I've been told by several people today, must change.  And in the end, a lot people thought that Scott McClellan was not effective enough for the president. 

MATTHEWS:  Right.  Is he the kind of press secretary who gets sent out to deliver messages, or is he the kind of press secretary like Jody Powell or James Haggerty back with Eisenhower who really sits in the room and decides what to say? 

GREGORY:  I think he reflects a style that this president came to Washington with, which was keep the press at arm's length, don't tell them much, tell them the bare minimum, and let's not get engaged in using the White House press room podium to try to advance our agenda in the way that we could.  And I think that kind of message discipline may have helped the president at some point. 

Look, I'm a guy who wants as much information as I can get, so are you, so I think more is more, not less is more, but I think there's no question that Scott, just like Ari Fleischer before him, reflected the president's view of don't tell them much.  Tell them just as much as you need to get by, and I don't think that that helped Scott McClellan. 

I don't think it helped Ari Fleischer either, and I think the biggest example of that has to do with the CIA leak case, and Scott McClellan was the messenger in that case, I think it hurt his credibility with the public. 

It said nothing about whether we could vouch for him as people who deal with him day in and day out.  It was pretty clear to us that he was given bad information an he reported out that information, but we're not the issue here.  The issue is he is the public face of this president. 

MATTHEWS:  Let me ask you about Karl Rove.  They're separating him off from his policy role, and uniquely identifying him now with politics, pure and simple.  Is that a focus on the need to win the elections in November or is that just to cut his wings a bit? 

GREGORY:  Well, I think there's a combination there.  I think on the first point, it's extremely important and this really signals how important keeping control of Congress is for this White House.  They recognize that if the last 1,000 days are going to mean anything, they have got to have control of the Congress. 

If the Democrats win, not only will the president's agenda go nowhere, but he's going to be tied up in investigations about the war and leaks and all the rest for the remainder of his term once Democrats, if that happens, have subpoena power.  Huge, huge problem, so that's really issue number one. 

Secondly, I think the president on down recognizes that Karl Rove is a lightning rod and he's been that way since he came in with the president in 2000.  And for critics of this White House, Republicans and Democrats, they look at Rove as being a leading target of why this Bush team has lost its way.

And let's be clear here.  Of all the changes we're talking about, the really high visibility people remain where they are.  That includes Karl Rove, but at least the message has gone out that some of his duties will be pared back.  So everyone denies that this is a demotion.  In fact, a number of top level people have said to me, look, this frees Karl up to do what he does best and that's get back to politics.  That's issue number one this year. 

MATTHEWS:  Great report.  Thank you David Gregory at the White House for NBC. 

Coming up, is there a single thing President Bush could do to restore faith in his job performance which is so low right now?  Pat Buchanan and Ron Reagan will be here when we return. 

You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Are more changes in store for all the president's men?  Can today's changes do anything to help the president's bad polls and bad blood with Congress?  Pat Buchanan and Ron Reagan are here, they're both MSNBC political analysts.  First of all, your sweeping assessment of this Pat, does it make any difference to this president's job performance ratings?

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  No, not on the big picture.  But I do think it gives him a fresh face.  He's got new face cards out there.  I think the message from cutting Rove out of the—out of the line, if you will, of chief-of-staff, it's a good message.  It says Bolten's going to be running things, and Bolten has brought in his own deputy.

It says we've heard the message that it's too politicized and I do think—look, I think McClellan is a good, loyal servant of the president.  He got beat up very badly in this, but I think the president needs a Jody Powell or a Mike McCurry, somebody who can go out there, not only make the case, but go on the offensive, a really articulate press secretary.

MATTHEWS:  Would such a high-level press secretary be willing to sell what Scott was asked to sell, things like—and I do pay tribute to his loyalty.  Things like “it's a ridiculous assumption that there was any kind of leaking out of the White House, a ridiculous idea.”  You have to pay a person a lot of money to get him to do anything like that.  You have to expect a lot of loyalty from a person to say something like that. 

BUCHANAN:  McClellan was badly used by those guys and he was sent out there to say things he believed were true, which turned out not to be true.  If I had to recommend anybody to him, I'll tell you who I'd recommend, is Tony Blankley.  Tough customers, he's been in the business, been hammered left and right.

MATTHEWS:  Tony Snow too.  Another Tony, both good guys, former speechwriter.  Let's go right now to Ron Reagan.  Ron, is this blame the messenger, shoot the messenger?

RON REAGAN, MSNBC POLITICAL ANALYST:  No, I don't really think it is, but I don't think it's going to do the president much good.  You know, as Pat was saying, this is a very tough job and Scott McClellan was put in a terrible position out there, very often saying things that he might not have known were untrue, but surely his masters knew were not true.

As somebody said earlier today, that being press secretary in the White House is a little like waking up every morning and having to go quail hunting with Dick Cheney.  You need a thick hide and a sense of humor and you'd better know how to duck.  But I don't know who he's going to pick who would want to do that job anymore, who would be as qualified as—let's say a Tony Blankley.  I don't think Tony would want to do.

MATTHEWS:  Nick Von Hoffman, the great columnist back in the Nixon era, referred to—what was his name?  Ziegler as a Schwarzkopf (ph) clock figure, one of those little cuckoos that comes out.  Not cuckoos, little characters that come out.  He said they just come out every once if awhile and issue statements and go back into the clock and come out again.  Do you think this president would be well served to hire another one of them?  Or does he have to hire—you say a heavyweight?

BUCHANAN:  Well Ron Ziegler was a friend of mine, he really took a horrible beating. 

MATTHEWS:  But he had to do this kind of job.

BUCHANAN:  Well he had to go out there, but he was there for five years, Chris.  He really went through it and look, you had all that conspiracy going on.  He didn't know about it and he was out front.

MATTHEWS:  But Nixon was shoving him literally, saying you get out there and sell that crap.

BUCHANAN:  Well he went out there and—you go out there and take the beating.  But I think what he needs is, I said, a Jody Powell, McCurry, those guys are articulate guys who know how to make a case, go out there and take even a bad hand and make it look a lot better.

MATTHEWS:  And you believe that will solve the president's problems?

BUCHANAN:  It won't solve the president's problems.  The president's problems, Chris, are associated with Iraq, Iraq, Iraq.  They are real.  Until there's change on the ground—besides, McClellan might be known to 20 percent of the country, maybe.  He's not known to the nation.  Rove is better known.  But Rumsfeld is better known than any them.  Cheney is better known than any of them.  Those are the big players.

MATTHEWS:  Is there anybody well known in this administration that anyone in this country likes?   You've just listed an amazing...

REAGAN:  Condi Rice.

MATTHEWS:  I don't think she'll take the press secretary job.  Ron, your thoughts.  Right about—let's talk about—let's move on to Rove too.  Karl Rove may be—I mean, I've talked to him, everybody who's talked to him knows he knows a hell of a lot of stuff, whatever you think of his tactics.  He knows politics.  Is it right to shove him over into pure political role-playing now, not policy anymore?

REAGAN:  Well I think the thinking is, David Gregory had indicated earlier that the second priority for this administration after Iraq is winning the midterm elections.

As David pointed out, if they lose one or both houses of Congress, the investigations will start.  And if the investigations start, it is all over for this administration.  They're already teetering on the brink.  But they couldn't stand that.  The last 1,000 days would turn into a nightmare for these people.

MATTHEWS:  How do you know that, Ron?REAGAN:  That the investigations would start?

MATTHEWS:  Would pave results, that there would be some dirt there that would really bring down this administration, how do you know that?

REAGAN:  I don't think there's any doubt.  It's my opinion...

MATTHEWS:  There is doubt.  I don't think a lot of Republicans doubt that this guy would go down if you checked him out.

(CROSSTALK)

REAGAN:  Do you really think that the administration didn't manipulate intelligence going into Iraq?

BUCHANAN:  Well look, they can investigate it.  The guys who went in there and voted and gave them a blank check, no.  Let me tell you something, Ron, if the Democrats got control of both houses, it would be the best thing that could happen to the Republicans for the simple reason that by 2008, the people would say, “Get rid of those guys in Congress” and they'd be looking for a change.

REAGAN:  No, they're saying get rid of them now.

BUCHANAN:  And the Democrats would be the end party.

MATTHEWS:  Ron is right about one thing, you never give away the subpoena power.

REAGAN:  Absolutely.

BUCHANAN:  I wouldn't give it away, but I'm saying you'd have a stronger hand in 2008.

MATTHEWS:  Nixon the night he got reelected, remember?  He's in the dumps because he knew he lost his subpoena power again.  We'll be right back—even though he's listening to Victor.  We'll be back with Pat Buchanan and Ron Reagan.  You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We're discussing the White House staff shakeup with MSNBC political analyst Pat Buchanan, and Ron Reagan is also with us.  Pat, when you look at this, I think back to Jimmy Carter, who I worked for back in 1979, he went up to Camp David and fired half the cabinet.  Nixon had some changes he made, obviously when he asked for everybody's resignation.  Does the public really care about anybody but the president? 

BUCHANAN:  yes they do.  I was there when Haldeman and Ehrlichman went and they brought Al Haig (ph) back, that was big dramatic stuff.  I was there when Ronald Reagan let Don Regan go and Howard Baker came in, that was big stuff.  The difference is, when you brought Howard Baker in, you brought a four-term United States senator walking in and being chief of staff, replacing Regan. 

MATTHEWS:  A grown-up.

BUCHANAN:  I think Bolten is a grown-up, but  nobody knows who Bolten is. 

MATTHEWS:  This guy, Joel Kaplan, I literally never heard of him before. 

BUCHANAN:  I have not either.  I'm sure he's a very competent guy. 

There's no big face guards here. 

MATTHEWS:  Does he need to bring in face guards.  Let's suggest two things.  Is this the right time to show toughness and bring in real mad dog operatives, cowboys and cowgirls in this town who would come in and really shove it at the at the press, or would you bring in a likable person like Tony Blankley or Tony Snow from the media.. 

BUCHANAN:  Blankley is a tough guy.  I would bring in Blankley as press secretary.  I would bring in Cora Logis (ph) to handle congressional liaison, pull him out of Belgium.  He's a big guy.  He's ambassador, but he's run that operation before.

MATTHEWS:  Would you bring in good guys or tough guys? 

BUCHANAN:  I would bring in big people.  I would bring in big people who have tremendous credibility at the outset, but the basic problem, Chris, is the policy.  How is the war going in Iraq and nobody can change that. 

MATTHEWS:  I think objective facts mean more to the American people and all of us in the media and in government are transparent, going right to the facts.  They know what they're paying for gas and they know how this war is going. 

BUCHANAN:  That's why he's in trouble on the economy.  It's those gas prices, that's that one thing. 

MATTHEWS:  If you're a working guy and you have to drive 50 miles, you know what it costs.  Thank you Pat Buchanan, thank you Ron Reagan.   Up next, “Newsweek”'s Howard Fineman is coming here.  And “Rolling Stone” magazine's Eric Bates and our own Norah O'Donnell on the shakeup at the White House and what big changes we should still be looking for from inside this administration in the days to come. 

You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(MARKET WRAP)

MATTHEWS:  Welcome back to HARDBALL.  The White House press secretary is out.  The defense secretary still in.  And Karl Rove, the man called Bush's Brain, gives up one lobe, I love this writing, for another.  I didn't write that line. 

Here to do some digging into it is “Newsweek”'s chief political correspondent, Howard Fineman, MSNBC's chief Washington correspondent, Norah O'Donnell and “Rolling Stone” magazine's national affairs editor, Eric Bates.  “Rolling Stone” cover this month, I must warn you, if you're a Republican or a middle-of-the-roader.  Look at this.  This is a tough one.  What does it say?  “The Worst President in History.”  Can we have that thought explained a bit, Eric.  You wrote this piece. 

ERIC BATES, ROLLING STONE NATL. AFFAIRS EDITOR:  No, I didn't write it.  We had Sean Wilentz, he's a Pulitzer Prize finalist, a historian, assess Bush's presidency from a historical perspective and found that it looks like he's headed for what he calls a colossal historical disgrace.  Can't predict what's going to happen in the next few years.  So far ranks right down there with James Buchanan, Herbert Hoover and Andrew Johnson. 

MATTHEWS:  Wasn't Wilentz the guy who defended Clinton and Monica right to the last day.  Wasn't he a complete partisan on the Clinton administration's misconduct? 

BATES:  He has his political perspective, but he's also a historian and he looks at this from a historical perspective. 

MATTHEWS:  So Clinton was a success and Bush is a disaster? 

BATES:  Clinton didn't have the opportunity to be as big of a disaster as Bush has proved to be, I think, is more the point. 

MATTHEWS:  Let me go right now to what is happening today.  Let's got Norah O'Donnell, you've been reporting on this with the hot notes, that's our inside term for hot stuff.  What do you make of McClellan getting—I noticed how the president was so nice to him, I hope you have this picture, when he walks him, in a very dignified fashion, almost like he's the minister walking the last mile with him, all the way out, it's very nice.   Was that part of the honor that he got because he had to leave? 

NORAH O'DONNELL, MSNBC CHIEF WASHINGTON CORRESPONDENT:  Yes.  And I think that Scott choking up, getting very emotional, is not only because he served this president even as governor for seven years, but that he was pushed out.  I think he would have liked to have stayed and served this president, even longer, but they need a new face, but—

MATTHEWS:  Do they have one yet, do you know? 

O'DONNELL:  I don't think that they do.  I think that some of the names that have been out there are not accurate.  I think that there's somebody else that they may be looking toward, but I don't think that Scott McClellan was the big news today.  I think it's a little blip on the radar screen compared to what happened to Karl Rove and the picture—

MATTHEWS:  Help me out here Norah, now that you've knocked out my lead, what do you think is the lead? 

O'DONNELL:  Well, that Karl Rove is giving up oversight of policy initiatives, so that he can focus on politics. 

MATTHEWS:  What's that mean?

O'DONNELL:  As a senior administration official said to me, listen, it's obvious that he's the best pitcher out there in terms of politics and strategy and we need to get him to focus on the midterm elections.  So somebody in the White House has finally realized there on the verge of losing congress.

MATTHEWS:  OK, so is that it, or is there another piece of this which is they want to make Congresspeople feel they don't have some Machiavelli in there playing the political games with all the legislation?  They want to make it look like it's a clean, good government effort now without ... 

(CROSSTALK)

O'DONNELL:  And also that Karl Rove is going to come back and help you out a little bit with political strategy, and that the president has got barely 1,000 days left.  And as Dan Bartlett told you just a little while ago, and as the president said, I want to sprint across the finish line.  He doesn't want to be a lame duck and Karl Rove bit off more than he could chew. 

MATTHEWS:  Isn't the problem with these secretaries that have had to put out a lot of stuff that has turned out not to be true, you know, about what the war was going to do and there wasn't going to be an insurgency, that gas was going to pay for the war and it was going to pay cheaper gas for us—all those promises they made aren't coming to fruition, so naturally it's a tougher job being a press flack. 

HOWARD FINEMAN, “NEWSWEEK”:  It's tough, and if you're a press secretary, it's almost as bad if it's clear that you don't know what's going on, as if you lie.  And in Scott McClellan's case, everybody likes Scott McClellan personally.  I mean, Norah and I covered him going back to the campaign.

MATTHEWS:  He seems like a good guy.

FINEMAN:  A very decent guy. 

MATTHEWS:  So he's not Machiavellian?  He's not a behind the scenes guy? 

FINEMAN:  No, I called him in the Web piece earlier today the “human pinata” of the press room.  I mean, they were whacking him because he didn't know what was going on and out of frustration, I think, people were angry at George Bush and Karl Rove for sending Scott McClellan out there who clearly wasn't in the loop. 

MATTHEWS:  OK.  This is an inside question.  You've got to answer this question.  I know it's going to be tough because you've got to deal with these people as sources, but who's in that back room who sends this kid out, this young guy out, McClellan, to say all this stuff?  Who is in the last meeting before he meets the press?  Is it Bartlett?  Is it Nicolle?  Is it Karl Rove?

O'DONNELL:  It's the communications team.  It's also Karl Rove, it's Andy Card.  There's a huge development, but the ... 

MATTHEWS:  Is there a meeting before the press meeting where they sit around and say now, here's what you've got to get out there and say?  Is there?

O'DONNELL:  Yes, those are all—and even the lower press aides get together. 

(CROSSTALK)

MATTHEWS:  Well, why don't take the hit?

O'DONNELL:  The lower press aides?

MATTHEWS:  No, not the lower press aides, the big shots who tell Scott McClellan what to say?

O'DONNELL:  Because that's the fortunate thing of being in charge. 

You don't end up being the fall guy. 

(CROSSTALK)

FINEMAN:  Chris, the president has taken the hit in terms of a 36 percent approval rating, and the key thing about Karl Rove is—and Scott, my sense was in the first year here, George Bush was trying to get by in the first year of his second term where the people—sort of the second team in the sense that Scott was ...

MATTHEWS:  And that's the problem of a second term.

O'DONNELL:  Yes.

FINEMAN:  That was the problem.  Scott was not an A player in the first term and by giving Karl a bigger portfolio than he should have had, they were trying to do it and keep it small, and you can't keep it small. 

And Josh Bolten—by the way, Josh Bolten wanted to do something else here.  He can't whack Donald Rumsfeld, he can't certainly whack Dick Cheney, but if you're chief of staff and you want to show that you're a real chief of staff and not just a paper shuffler ...

MATTHEWS:  You whack Karl Rove.

FINEMAN:  ... you whack Karl Rove.  And that's what happened.  That's what happened.

MATTHEWS:  And I have heard that in the early days, even though he had no profile—you were up there covering the Hill—I mean, the White House all the time in this period—that the real powerhouse was Andy Card.  He was just kind of a nebbishy guy publicly, right?

O'DONNELL:  Right, and that Andy had a great deal of power. 

MATTHEWS:  There's a favorite phrase of mine.

O'DONNELL:  Just to do—the other thing I'm told is that by one source inside the White House, is don't expect any more departures this week, that some of the departures may come later. 

(CROSSTALK)

MATTHEWS:  OK, big question, I want you to think about this but give me your preliminary answer.  Is the president and Dan Bartlett and the rest of them suddenly shaking the diving board on Rumsfeld? 

O'DONNELL:  You know, it's very unusual that the president would become so agitated as he did in the Rose Garden defending him, and no president wants to get in the position where they're spending their own political capital to defend one of their cabinet secretaries, however, as has been pointed out ...

MATTHEWS:  That suggests you're saying positively to me that Bush may be getting a little tired of having to play defense for Rumsfeld. 

O'DONNELL:  There is some reporting out there—this is not my own, but—that Bush has privately told people that he is not happy that some of the predictions that Rumsfeld made to them did not pan out.  That being said, many people believe that if he were to fire Rumsfeld, he would be then acknowledging that the war was a mistake. 

FINEMAN:  I'll tell you what.  The diving board is going to have to be going up and down, you know, by feet for something to happen.

MATTHEWS:  For him to quit?

FINEMAN:  Yes, well for him to quit.  Number one, he's not going to quit.  And number two, Rumsfeld is so identified not only with the war on Iraq but with the overall war on terrorism that I think that's protecting him now.  Because George Bush—number one, the more the “New York Times” calls for Rumsfeld's head, the less likely Bush is to do it.

MATTHEWS:  Because he's the next line of defense. 

FINEMAN:  And number two—he's the next line of defense and also because he's too identified with the overall policy so it's not happening right now. 

MATTHEWS:  You know, I agree with you completely.  I just read something on this.  He's the president's heat shield right now.

O'DONNELL:  Yes.

MATTHEWS:  And we're coming into the atmosphere. 

FINEMAN:  It's getting hot.  It's getting how. 

MATTHEWS:  We'll be right back with Norah O'Donnell and Howard Fineman and Eric Bates.  We've got to get back to Eric Bates.  This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We're back with “NEWSWEEK's” chief political correspondent Howard Fineman, MSNBC's chief Washington correspondent—all chiefs, no Indians.  I'll play ...

(LAUGHTER)

MATTHEWS:  OK, Norah O'Donnell, and “Rolling Stone” magazine's national affairs chief, Eric Bates. 

Eric, let me ask you about the cover, because it is going to come out and you're going to push it.  I want you to push it.  This guy—is the president, let me ask you, trying to save himself by these staff changes and is he savable? 

BATES:  I think he is trying to save himself, but I think that this isn't going to do anything.  You know, the question you asked before about Rumsfeld, this isn't a regime change, this is a channel change.  It's designed to change the conversation away from Rumsfeld. 

Now we're talking about Rove, we're talking about McClellan.  What happened to the discussion about the generals and Rumsfeld's resignation?  If you really want to make a change, you have to acknowledge that you've made mistakes, and we've got a president who isn't willing or able to do that. 

MATTHEWS:  But isn't that the problem?  Eric, I mean, we argue about this all the time and I'll continue to do so, because the most profound decision of this administration is singular.  It's not complicated.  It's not multifaceted.  It was the decision after 9/11 not to continue to track down al Qaeda and bin Laden at all costs in a total—you know, a total effort, but to shift attention down to the old problem of Iraq. 

And that decision, I would suggest—you respond to this—is the single and the signature issue of this administration.  And the president cannot say, “I made a profound error because he's admitting his administration is a disaster if he does,” doesn't he?

BATES:  That's right and that's the overriding issue, but you also have domestic policies that have trashed the economy and resulted in a dramatic shift of wealth.  You've got mishandling of the major...

MATTHEWS:  ... Do you think he's trashed the economy or he's just shifted the wealth to the big taxpayers who get the biggest tax breaks?

BATES:  Well I think that does trash the economy and I think real wages are not keeping up with inflation and you're seeing poor families suffering, the gas prices you mentioned earlier having an effect.  He's mishandled the biggest natural disaster in American history.

MATTHEWS:  But why—you put all the blame, or your author does, and I can see there is blame to hand out—but how do you blame all of that on President Bush?  Wages haven't kept up.  The job of getting wages higher is collective bargaining and negotiations.  Why do you blame the president for that?

BATES:  Well I think you have to look at his domestic policy as a whole.  He's been very single-minded as he has been in Iraq.  It's been tax cuts, tax cuts, tax cuts.

MATTHEWS:  And that's his religion, you're right, you're dead right.  I can't wait to read it.  I love the big covers you guys do in “Rolling Stone.”  Let me go back to you folks.  Do you think the president's going to try to go nicer or nastier?  In other words, the person he brings as his press secretary to us in the business of journalism will tell us a lot.  If he brings in a nice guy like Tony Blankley or Tony Snow, it says we've got to cheer up this place a little bit.  If he brings in a mad dog, and we all know a couple of those in the press relations department, that says you haven't seen nothing yet.

O'DONNELL:  Well I hope he goes nicer. 

MATTHEWS:  I do too.

O'DONNELL:  I think the other thing too is there's got to be another flow of information, that that press secretary has to have enough stature that they can go back to the president and the chief-of-staff and say, “Listen, I think we need to do it this way.”

MATTHEWS:  So Pat was saying that earlier.  You were saying that earlier.

FINEMAN:  It's going to be nicer, to put it in those terms, because it's going to be somebody who's going to have a lot of credibility, a fund of credibility with reporters, which is going to be important. 

I've heard other names mentioned like Dan Senor or Torie Clarke, who's another interesting possibility and others.  Some people who are going to start out with a fairly clean slate with the White House, you're rolling your eyes on the topic of Torie Clarke.

MATTHEWS:  No, your idea nice is so different than mine.  Go ahead, Norah.

O'DONNELL:  The issue though is, it's interesting—I've talked to several Republican strategists who say they can move all these people around, but until they deal with Iraq, the president's approval ratings are not going to improve, and it's not going to help those in Congress.

MATTHEWS:  He doesn't need another Mooney (ph) in there, another true believer that's just going to say what the president says over and over again, as if they really believe it.

FINEMAN:  Here's another fact—one other fact here on Josh Bolten, just for a second.  I'm told that the agencies were thought to be adrift by people inside the White House and just in sheer administration, of making the machinery of government work, that's going to be a key thing for Bolten to do.  And that will help the president some.

MATTHEWS:  I think our advice will be taken.  I think it will be a grown-up.  We'll be right back with—a nice grown-up.  Anyway, thank you Norah, you're hopeful.  Thank you, Howard.  I'm not sure you're right.  They're coming back, by the way.  Eric Bates is also coming back.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We're back with “Newsweek's” chief political correspondent Howard Fineman, MSNBC's chief Washington correspondent Norah O'Donnell and “Rolling Stone” magazine's national affairs editor, Eric Bates.

Let me start with Norah.  I like forecasts.  Give me a forecast. 

Where's this administration headed with its revamping operation?

O'DONNELL:  There will be no more departures this week.  But there will be a series of departures over the next month or so.  The treasury secretary...

MATTHEWS:  John Snow?

O'DONNELL:  The communications adviser, Nicolle Wallace.

MATTHEWS:  Doesn't she have a marital situation where her husband is moving to New York?

O'DONNELL:  Yes.  So she will probably stick around for another month in the transition to help out and then go be with her husband, so she's not being pushed out.

MATTHEWS:  Will Cheney survive the current flurry?  Will he remain the heat shield of the president?

O'DONNELL:  He will remain the heat shield of the president and his good buddy Rumsfeld will probably be able to survive at least a couple more months, if not longer.

MATTHEWS:  Because the president needs that front line.

FINEMAN:  We're up to two heat shields now.  We've got the Rumsfeld heat shield and the Cheney heat shield.

MATTHEWS:  No, there's only one heat shield.  Would you like to review the tapes tonight, Howard?  His name is Don Rumsfeld.

FINEMAN:  OK.  The big picture is there is going to be a tremendous number of changes in domestic policy administration.  As Norah said, treasury, new OMB, new domestic policies, some more communications tweaking, et cetera.  But the big picture remains the same.  Bush has dug in on his tax cuts and he's dug in on the war.  Those are the two...

MATTHEWS:  ... And he's been dug in on gas prices. 

FINEMAN:  And he's been dug in on gas prices.  I don't know what he can do there.  He is at the mercy of world markets at this point, he's a markets man.  What's he going to do?

MATTHEWS:  Well his friends in Saudi Arabia are already pumping the gas.  Apparently what I hear today is from Andrea Mitchell, it's these other countries, the newer producers, like Venezuela, they don't feel any urgency to make a good quarter.  They don't have to sell the gas.

O'DONNELL:  Venezuela has always been our best friend.

MATTHEWS:  It is like in that movie, “Syriana,” these cooperatives and companies have decided that they're better off holding the gas, keeping the reserves.  Ten, 20 years from now, the Chinese will pay anything for it.

FINEMAN:  Josh Bolten will make things run better.  But another thing he's not going to be able to do is really restrain spending because the Republicans in charge, they may claim they don't like ear marks, but that's all they've got heading into the fall elections.  They're going to spend like crazy.

MATTHEWS:  They want something for their newsletters.

FINEMAN:  They're going to spend like crazy to try to keep control of the House and the Senate.

MATTHEWS:  So if Rob Portman comes in there and tries to squeeze the spending, will the president actually begin to veto spending bills?

FINEMAN:  I can't see him vetoing a lot of spending bills in the face of Republicans begging for his help to get reelected by going back to their districts and their states saying, “You might not like the president's policies on Iraq, but look at what I've brought you to this district.”

MATTHEWS:  Last question.  Will there be an October surprise?  Will the administration, with a new team out front, do something in October like moving troops out?  Declaring victory?  Declaring a gradual rollout that gives them the big win they don't expect perhaps right now in the House and the Senate races?

O'DONNELL:  I'm not sure that it's planned an October's surprise.  But I think that the goal of this administration has been a steady reduction of troops in the next couple of months.

MATTHEWS:  Something to brag about?

O'DONNELL:  By the end of the summer, yes.

MATTHEWS:  By the end of the summer.  Howard?

FINEMAN:  I think they're going to save it up for as big of a reduction as they can make before the election.

MATTHEWS:  And have a big announcement after Labor Day.

FINEMAN:  Have some kind of announcement.  But we're still going to have 50, 75..

MATTHEWS:  ... Karl Rove will have some influence over policy, I predict, in that regard.  He's on the line.

FINEMAN:  Bolten is putting him back on the line on this.

MATTHEWS:  Even though he's working politics, he needs a package to

deliver it and policy.  Anyway, thank you Norah O'Donnell, thank you Howard

Fineman.  Thank you Eric Bates, good luck with that cover.  I'll buy a

copy.

Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now it's time for “THE ABRAMS REPORT” with Dan.

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

END   

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