updated 7/6/2006 10:32:49 AM ET 2006-07-06T14:32:49

Guests: Dan Burton, Bill Pascrell, Tyler Drumheller, Michael Scheuer, Jim Gilmore, Hilary Rosen, Cindy Sheehan

NORAH O‘DONNELL, MSNBC HOST:  North Korea sets off its own 4th of July spectacular, an international show of defiance.  How should the Bush administration respond?  Let‘s play HARDBALL.

Good evening.  I‘m Norah O‘Donnell in tonight for Chris Matthews.  The eyes of the world are on North Korea tonight after they test fired a total of seven missiles on the 4th of July, including a long-range missile designed to reach the United States. 

Now, the incident was seen as a provocative act, sending superpowers scrambling for a diplomatic answer to a potential military threat.  While the intercontinental missile aborted within a minute of launching, President Bush said the failed test does not lessen his desire to get Kim Jong-Il to give up his nuclear weapons. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I view this as an opportunity to remind the international community that we must work together to continue to work hard to convince the North Korean leader to give up any weapons programs. 

They‘ve agreed to do that in the past, and we will hold them to account, and I also strongly believe that it is much more effective to have more than one nation dealing with North Korea.  It‘s more effective for them to hear from a group of nations rather than one nation. 

(END VIDEO CLIP)

NBC‘s Jim Miklaszewski is at the Pentagon.  Jim, what is the latest there? 

JIM MIKLASZEWSKI, NBC NEWS - THE PENTAGON:  Well U.S. military officials 24 hours—more than 24 hours after that failed launch of the Taepodong-2 long-range ballistic missile, are still trying to figure out exactly what happened. 

They do know, as you say, that within a minute of the launch, there was a catastrophic mechanical malfunction of some kind, but it‘s not clear whether there was a command detonation, in other words, somebody at the command said we‘ve lost control of this missile and they blew it up or whether it simply tumbled into the sea. 

It‘s going to take some time to figure that out, but U.S. military officials are confident that they do have a pretty good idea, or will have a pretty good idea, within the next several days after they study all the data.  After all, there were U.S. spy ships, spy satellites and other surveillance radars tracking this missile from the very second it lit off until it plunged into the sea about 42 seconds later. 

So once they get a good look at all that telemetry, they should have a better idea as to what exactly caused that malfunction and whether, as some people have predicted, including U.S. military officials, that the North Koreans could probably develop a long-range missile that could carry a nuclear warhead within five to six years.  Some are already pushing that timeline back to at least a decade or more. 

O‘DONNELL:  Mik, what does it tell us about what North Korea wanted to do, the very fact that they did it test launch on the 4th of July on the day that the Shuttle Discovery was launched out of Florida? 

MIKLASZEWSKI:  Well, there are some serious questions being raised about whether this was a legitimate test launch or whether it was simply what the military calls fire for effect.  In fact, it‘s thought that perhaps that the time of day and the conditions, that the North Koreans perhaps could not have gathered the kind of information about the test that they would actually need.  So it was thought that it was timed to the 4th of July.

Some of those scud missiles, those six medium- to short-range scud missiles that were launched along with the Taepodong, the first of those was launched at almost the same time that the Discovery Shuttle was launched in Florida. 

So clearly, there was a high level of propaganda value here in the North Koreans‘ eyes and at they think that may have been the intent all along, to get world attention and to try to drag the U.S. to the bargaining table to negotiate directly with the North Koreans, something the administration says is not going to happen any time soon. 

O‘DONNELL:  And, Mik, let me ask you about some of your reporting and talking to military and intelligence officials.  The fact that the Taepodong failed within 30 or 40 seconds after launch—that‘s one that could probably hit the United States—are they feeling good over there?  You know, the front page of the “New York Post” had the title “Ding Dong” on the front.  Are they feeling good that that failed to launch?

MIKLASZEWSKI:  Well I don‘t think good, but somewhat relieved that perhaps, as I mentioned a moment ago, the timeframe that they had originally estimated at five to six years may be pushed out into future years, perhaps a decade or beyond.  And one missile military expert told us today that he thought the North Koreans would continue to try to develop these long-range missiles, but might never actually field one. 

O‘DONNELL:  All right.  Thank you, Jim Miklaszewski at the Pentagon. 

MIKLASZEWSKI:  OK.

O‘DONNELL:  And with us now, Congressman Bill Pascrell is a member of the Homeland Security Committee and Republican Congressman Dan Burton is a member of the International Relations Committee. 

Congressman Burton, let me ask you first, the president said last week if North Korea tests this missile, it would be unacceptable.  So what should be the response of the United States? 

REP. DAN BURTON ®, INDIANA:  Well, I think every ounce of diplomatic pressure that we can bring to bear upon them, as well as economic pressure, should be exerted, and that should not be done unilaterally by the United States. 

So I think the entire world, the United Nations, the entire world ought to tell North Korea that this is not something that is not acceptable, because it‘s not just the United States and our people that‘s at risk, it‘s anybody within the 9,000 range of those missiles. 

O‘DONNELL:  Congressman Pascrell, how aggressive should we be with North Korea? 

REP. BILL PASCRELL (D), NEW JERSEY:  Well, I agree with Dan in that this should be a multilateral approach to a very serious problem.  I think this is not an erector set we‘re talking about.  North Korea has been working on this for a long time.  They haven‘t fired a long-range missile since 1998.  They‘re trying to flex their muscle. 

We are not going to be intimidated by the North Koreans, but we need to have the Chinese and South Koreans involved in negotiations, and we need to have the United Nations not only speaking, but taking action, against North Korea.  We are not going to go to the bargaining table simply by them rattling swords. 

O‘DONNELL:  Well, let me ask both of you about that.  We have tried the diplomatic route through the six-party talks which, of course, broke down in November, but that has not worked.  Is a new approach needed, Congressman Burton? 

PASCRELL:  I think that the United Nations should be involved because as the Congressman said, we are not simply talking about the United States‘ security, which we are most concerned about, but we‘re talking about the security of the entire Asian community. 

I mean, even though these missiles didn‘t work and fell limply into the Sea of Japan, that doesn‘t mean that they do not have missiles, if given warheads, that could go even longer.  The long-range missile failed, the entire system failed, but what is our defense system? 

We have not—we tried in 2002 to put together a defense strategy with our missile structure, we—in fact, our missiles‘ interceptors didn‘t even leave the silos.  We need not to rattle sword as the North Koreans have, we need to do this a diplomatic way, and we need to have sanctions against North Korea.

O‘DONNELL:  But it does not appear that the current diplomatic way has worked to some degree and, yes, the North Koreans are trying to pressure us into bilateral talks, but it was true that under the Clinton administration, they did engage in these bilateral talks that ended under President Bush. 

Congressman Burton, let me ask you.  Do we need to change the approach, do we need to be more aggressive with North Korea? 

BURTON:  No.  No, if we acquiesce to the demands of the North Koreans, it would be appeasement, in my opinion, and that simply doesn‘t work.  You know, China and Russia are right next door and it‘s extremely important to them, in my opinion, over of the long haul to make absolutely sure that North Korea, with the lunacy that they have in their leadership, doesn‘t have access to missiles of this type and nuclear weapons of this type.

And so I think what we need to do in the six-party talks is talk to our Chinese counterparts, and Russian counterparts and explain to them—and I think they already realize this—how very, very important it is not just to us, but to them as well, because they‘re much closer and much more in range of some of these missiles than we are. 

O‘DONNELL:  It‘s a great point.  China is by some estimates providing 90 percent of North Korea‘s fuel, it‘s providing about 45 percent of its food, for that very poor country.  So why aren‘t the Chinese doing more? 

PASCRELL:  I think the Chinese are afraid of alienating whatever contacts they have with the North Koreans.  Don‘t forget, North Korea needs sources of energy at this particular time.  This is an impoverished nation and impoverished nations and leaders of impoverished nations like to take the emphasis off the suffering within their own country. 

We‘ve seen this in the Middle East, and so now the United States becomes a target or Russia or China becomes a target or South Korea becomes a target.  That‘s not going to work.  I believe that the bilateral discussion should have taken place three, four years ago. 

Right now, we cannot back down and consent to a bilateral approach, because this would be providing the ammunition that the North Koreans are looking for.  They need not only attention, but they want us to back down on negotiations. 

O‘DONNELL:  You know, it‘s so interesting, because it‘s so clear that Kim Jong-Il, who is crazy and the North Koreans were clearly trying to flex their muscle, as you said, and do this on 4th of July when we‘re launching the Shuttle Discovery.  This was a provocative, attention-grabbing measure to the world. 

The key question is now, is this going to backfire on him, because now will this push the Chinese and the South Koreans to impose sanctions, what the U.S. finally wants them to do?

PASCRELL:  I think it will back fire.  I don‘t know what Dan feels, but I think it will back fire. 

O‘DONNELL:  Congressman Burton?

BURTON:  I think that China and South Korea and Russia, I think that they will, as well as in the six party talks, I think they‘re going to put behind the scenes a great deal of pressure on him to stop this, and the Chinese, as you said, have a great deal of influence over North Korea, and I think that they will make some real positive changes over there.  He‘s got to listen to them, because without them, he doesn‘t have hardly anything.  The starvation is rampant over there right now, the economy is in a shambles, and without China supporting him, he has nothing. 

O‘DONNELL:  Let me ask both of you because you get intelligence briefings, you get military briefings, you know a lot more than the public.  Let me ask you about North Korea‘s capabilities.  We saw that ICBM, the Taepodong Missile, essentially exploded and went limp into the Sea of Japan after 45 seconds, does that tell us that really their capability is much more rudimentary than we thought Congressman Pascrell? 

PASCRELL:  I think that the intel has been very clear and generally, what we can speak about is that they are not ready, they are not a threat to the United States, but that does not mean that we understand that our allies are in jeopardy in that part of the world and obviously, we are all in this together, in modern societies throughout this world. 

O‘DONNELL:  Congressman Burton, quickly? 

BURTON:  I just like to say that we have to prepare for any eventuality.  Even though that test failed and it failed miserably, that doesn‘t mean that we shouldn‘t prepare and have an anti-ballistic missile system that can shoot down an incoming missile of that type.  So we have to get prepared just in case. 

O‘DONNELL:  Thank you to Congressman Dan Burton and Congressman Bill Pascrell, very interesting discussion.  And coming up, the CIA dismantled the unit responsible for tracking Osama bin Laden.  The terrorist mastermind no longer America‘s public enemy No. 1?  You‘re watching HARDBALL only on MSNBC. 

(COMMERCIAL BREAK)

O‘DONNELL:  Almost five years after the September 11th attacks, the world‘s most wanted terrorist is still on the loose and the CIA confirms that the special unit, called Alex Station (ph), with a mandate of finding him and other al Qaeda members has been shut down.  So with their mission still not accomplished, why is the CIA closing down the special unit hunting bin Laden? 

For answers and for more on the North Korea missile situation we turn to Michael Scheuer a former CIA official, who was the first chief of the Alex Station and Tyler Drumheller, the former CIA chief of European Operations.  Thank you to both of you.  Let‘s get to the Osama bin Laden hunting in a moment, but let me ask you about the news of the day, North Korea.  Tyler, let me begin with you, what should we learn and our intelligence learn about watching them launch and fail to launch this Taepodong? 

TYLER DRUMHELLER, FMR CIA EUROPEAN OPERATIONS CHIEF:  Well I think it‘s good news and bad news.  The bad news is they‘re trying to get our attention, I think they probably want to get back to the talks and don‘t know how to do it and with the North Koreans, it‘s always hard to figure what they‘re doing for internal reasons.  The good news is it didn‘t work and I think it gives us a real opportunity now.  Clearly this was aimed at the United States, because it was a missile that could reach the United States, so the message was aimed at us, and I know people that I talk to, for instance, that work on North Korea, say we shouldn‘t do bilateral talks with them. 

O‘DONNELL:  Why not?  Explain why. 

DRUMHELLER:  Because there seems to be the belief that the North Koreans will use this to separate us from the rest of the world and isolate us and isolate us from South Korea and from Japan, but I think it does give us the opportunity to say that we‘ll participate as part of the six party talks, as part of the U.N., but as a lead partner and maybe give us a chance to reduce some of the damage done by the Iraq, where we can say we‘ll take part as a group but we‘ll be the leader of the group. 

O‘DONNELL:  Americans want to know am I safe, is North Korea really a threat and there was a lot of scary talk about North Korea launching this missile.  We kept saying that this could reach the United States, Alaska or California and then of course with the launch yesterday, we realized after 30 seconds, this missile went limp.  Are their capabilities much more rudimentary than they had been portrayed and even Cheney last week said they have rudimentary capabilities. 

DRUMHELLER:  I think that‘s the message here.  I think the danger from North Korea is if you‘re in South Korea or you‘re in Japan, there are more artillery tubes pointed at Seoul than any place in the world and that‘s the danger of North Korea.  They‘re just as capable, more so of making miscalculations, the same as we are, so you don‘t want to start on a reaction to each other that will spiral out of control because the real danger is on the Korean Peninsula, not in America.  They only launch one of these missiles every eight or nine years, it‘s not going to be much of a threat. 

O‘DONNELL:  They did this launch in order to, on 4th of July, when we launched the Shuttle Discovery, as a message to the world.  Their own fireworks, their own spectacular display if you will.  Was Iran watching, and what do you think Iran makes of this? 

DRUMHELLER:  I think Iran was watching.  I think Iran will be watching to see what we do now, how we react and I think they had to know we don‘t want war with North Korea, we certainly don‘t want war with Iran, but they have, the way we react to this is going to be important and the way the Iranian situation plays out that again if we, when we say that we‘re part of a group, it doesn‘t mean that we‘re part of the herd.  We can be part of the group and still be the leader, which is the way we were during the Cold War.  If we can get back to that position ...

O‘DONNELL:  You mean with the six party talks? 

DRUMHELLER:  The six party talks or the U.N. or any group of nations.  It‘s very difficult to deal with the countries unilaterally, because you quickly have things spiral out of control, and you can end up, once they start moving, there‘s an inertia that begins for combat that you want to stay away from. 

O‘DONNELL:  Kim Jong-Il is clearly someone that we watch very closely.  Another person, Osama bin Laden, and the big news now that the CIA has decided to shut down this unit, Michael, that you were heavily involved in and of course has been named after your son.  Let me ask you, why is it being done? 

MICHAEL SCHEUER, CHASED BIN LADEN FOR CIA:  Well, the unit itself has never been popular within the agency bureaucracy.  It was set up in a way that bypassed some of the traditional chains of command. 

O‘DONNELL:  Let‘s get to this.  I mean, is Osama bin Laden public enemy number one  or not?  Bush said I want him dead or alive.  What‘s changed? 

SCHEUER:  I‘m sure the president probably has his blood pressure going through the roof today when they found out they had done this.  I doubt that he knows it. 

O‘DONNELL:  Really.  You don‘t think the president knows that they‘ve closed down this unit? 

SCHEUER:  I don‘t think the president would have let them do it simply for political reasons if for nothing else, but in terms of threat, bin Laden is a much greater threat than the Iranians or North Koreans ever are going to be in the foreseeable future. 

O‘DONNELL:  Let me just, and Tyler is sitting her shaking his head in the affirmative, saying that‘s exactly right, that Osama bin Laden is much more dangerous than either Kim Jong-Il or the Iranians.

DRUMHELLER:  And I think that‘s true.  In a global sense, in that he inspires a lot of other people, and I think what Mike is saying is—I hope they haven‘t done this, I hope this was just a renaming.  It wouldn‘t make sense because what you really need is to have the analysts like Michael, who are experts in this sort of thing, driving of the collection and the operations from the stations in the field.  They can really work together.  There has been a lot of bureaucratic sniping over the years from both sides, and—not when he was there.

O‘DONNELL:  Michael, is this going to slow down the hunt for Osama bin Laden?  Hamper the hunt for Osama bin Laden?

SCHEUER:  Very much so, because the bin Laden unit was basically the brains of the U.S. government on Osama bin Laden and supported the operations of the CIA clandestine service in the field.  And people tend to forget because the 9-11 Commission covered it up pretty well, is that the Clinton administration had eight or 10 chances to bill Osama bin Laden, based on the efforts of our officers in the field and the officers.  And to dismantle it now is just—it‘s kind of madness. 

Bin Laden clearly is in control of his own organization, and we‘ve seen in the last month cells taken down in Toronto, in London, in Miami, who claim to be inspired by him.  If he‘s not a man that deserves to be dead at the nearest possible moment, I don‘t know who would qualify for that distinction.

O‘DONNELL:  Well this is a man that‘s responsible for the deaths of 3,000 Americans, the reason we went to war in Afghanistan, to some degree why we‘re in a war in Iraq, because the threat—the president says there was a threat of weapons of mass destruction.

And now we‘ve disbanded the CIA unit that is searching for him?  What kind of resources are now behind hunting bin Laden?  We know for instance army‘s delta force, the special-ops guys, a lot of those have been diverted to Iraq.  How many resources are we putting behind finding bin Laden?

SCHEUER:  Certainly not enough.  We weren‘t—we didn‘t put enough resources against him when there was a very low level insurgency in Afghanistan, and now that that insurgency is raging, most of our resources in Afghanistan are devoted to combating that, not finding bin Laden.

And the problem is, the president has correctly said and the Democrats have correctly said, and Prime Minister Blair has correctly said that bin Laden has the capability of detonating a nuclear weapon inside the United States.  If that‘s not serious enough to merit a unit devoted to trying to kill him, I don‘t know what more you would have.

O‘DONNELL:  Wow.  Well that‘s—you just dropped a bomb that Osama bin Laden has nuclear capabilities within the United States.  We‘re going to talk more about that in just a moment.  We‘ll be right back. with Michael Scheuer and Tyler Drumheller.

And tomorrow at 7:00 p.m. Eastern on HARDBALL, live coverage of the Connecticut Senate debate.  Democrat Joe Lieberman has stood with President Bush on the war in Iraq and now he‘s in a political fight of his life with anti-war candidate Ned Lamont.  It is a hot, hot race and our coverage as the Lieberman/Lamont debate gets started tomorrow night at seven Eastern.

And check out our Web site, HARDBALL.MSNBC.com, for real-time blogging during the debate.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH:  There‘s an old poster out West that I recall that says “Wanted:

Dead or Alive.”

(END VIDEO CLIP)

O‘DONNELL:  Welcome back to HARDBALL.  For more on the inner workings of the CIA‘s hunt for Osama bin Laden and al Qaeda, we‘re back with former CIA official Michael Scheuer and Tyler Drumheller, the former CIA chief of European operations.

Two guys who formerly worked at the CIA, you know lots of stuff about the hunt for Osama bin Laden and we‘re talking about the closing of that unit called Alex Station, which dealt with that.  Michael, before the break, you said that Osama bin Laden has the aspiration to use a nuclear weapon inside the United States, but does he have the capability?

SCHEUER:  Well that‘s one thing we don‘t know.  But we‘ve certainly ensured the opportunity for him to get a nuclear weapon because we have not worked with the Soviets to completely secure the Soviet nuclear arsenal. 

Osama bin Laden, we know from the intelligence work we‘ve done, has been after our weapons since 1992.  So he has a 14-year head start on us.  Clearly he has religious justification to use it, he has justification to kill up to 10 million Americans.  Our borders are open, and the Soviet arsenal isn‘t secured, so when the president says we should worry about this man using a nuclear weapon, I think we should pay heed.

O‘DONNELL:  Let me play devil‘s advocate, because certainly Osama bin Laden is responsible for September 11th and is a bad guy and we want to catch him.  But the argument being made by some who carried out this closing of the unit is listen, we‘ve got to deal with a lot of threats, and it‘s not just Osama bin Laden, that this is a disperse enemy that we‘re fighting and we need to diversify our resources.  And if bin Laden—I mean, you surely acknowledge that if bin Laden were to die tomorrow, al Qaeda would still exist, yes?

SCHEUER:  Oh, absolutely.  But the point that they made, and I think an almost sophomoric piece of analysis was somehow he doesn‘t matter anymore.  Anyone who can be seen by a satellite can communicate with his command around the world. 

In the last month, we‘ve seen him reach out and put in one of his senior people as al-Zarqawi‘s replacement in Iraq.  So to argue that somehow he‘s not in command of his organization is wrong.  What we have basically is a two-tiered threat now.

O‘DONNELL:  Do we know that, that Osama bin Laden specifically chose the successor to al-Zarqawi in Iraq?

SCHEUR:  Absolutely.  He chose an Egyptian, from the Egyptian Islamic jihad, which is al-Zawahiri‘s organization.  These things don‘t happen just by happenstance.  They happen because the boss wants them to happen.

O‘DONNELL:  So Tyler, let me ask you about that then though.  If we were to take out bin Laden, how serious of a blow would that be or is it the view of others that say, listen, the threat is more diverse, disperse.

DRUMHELLER:  Well the lesson to intelligence, always are, it‘s a gray area.  Yes, bin Laden, if we took out bin Laden, it would be a huge blow.  They would still—the problem would still exist.

But that doesn‘t mean we shouldn‘t try and take out bin Laden because in that, the rest of the organization sort of flows from him and you should be able to do both.  You don‘t need to say we‘re going to stop looking for bin Laden because we‘re going to do all these other things.  It all should work together and it can work together. 

That‘s why I say, my hope is and I may be naive, I hope that this is just a renaming, and not a complete shut down, because that would be a mistake, because really the way that intelligence collection works best is when you have experts, analysts like Mike and this guy working on this. 

And then feeding the intelligence officers in the field, the case officers in the field who are out collecting the intelligence and sending it back, and it should work together very seamlessly and it doesn‘t really matter if you say, you don‘t have to stop doing one thing to do the other.  It‘s the CIA, they should be able to do all sorts of stuff.

O‘DONNELL:  All right, well thank you to Michael Scheuer and Tyler Drumheller, both formerly of the CIA.  And when we return, what‘s the Bush administration‘s best move to neutralize the threat of North Korea? And why is the president changing his tune on illegal immigration?

And tomorrow night at 7:00 p.m., HARDBALL, “Decision 2006,” live coverage of the only debate between Connecticut Senator Joe Lieberman and Democratic primary challenger Ned Lamont.  Go to HARDBALL.MSNBC.com for live blogging and to vote for your winner.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(MARKET REPORT)

O‘DONNELL:  Welcome back to HARDBALL.

Who makes you feel safe?  It‘s the question many Americans may ask themselves when they head to the polls come November.  Today, North Korea continues to test launch missiles designed to deliver nuclear warheads and to hit the United States.  Will Americans carry that image into the voting booth or will they think about the thousands of dead U.S. soldiers in Iraq? 

Here to dig into the politics of this brave new world is Democratic strategist Hilary Rosen, and former Virginia Governor Jim Gilmore. 

Governor, let me ask you, the threat from North Korea, dealing with Iran, the problems in Iraq, is national security once again to be the major issue that voters think about with they go to the polls this November? 

JIM GILMORE, FORMER RNC CHAIRMAN:  Well, I certainly think the North Koreans are trying to make it that way by firing missiles.  They have done that previously and now they have done it again and I think that it raises a legitimate concern as to American security, and the public may very well ask the question in November, which party is best able to take care of the American people in areas of security. 

O‘DONNELL:  Let me ask you, Hilary.  The president said last week that it would be unacceptable if North Korea test launched a missile, and they did yesterday.  So the president says he‘s going to use a diplomatic response, not a military response.  We‘ve been using the diplomatic response for the last several years.  Are the people going to look at that and say the president is not doing enough or he‘s not handling this the right way? 

HILARY ROSEN, DEMOCRATIC STRATEGIST:  Well, I think part of what the president is doing is consistently trying to sort of outword the opposition here.  What they‘re doing with the United Nations is exactly what they should be doing and it‘s exactly what they should have been doing all along in Iraq. 

And now to say, well, we‘re going to depend on a multinational force and we‘re going to depend on the U.N. Security Council to work with us on this problem, clearly that‘s what has to happen.  China has probably more to do with what ends up happening in North Korea than the United States does. 

I think the problem is that the president speaking on these kinds of issues now just rings a little hollow.  So I‘ll go back to Jim‘s question, which is, yes, people are going to be thinking about national security in November, only this time the Democrats are not afraid of that discussion. 

O‘DONNELL:  Let me let you listen to Tony Snow, the president‘s new press secretary from the White House about resisting, essentially, being drawn into bilateral talks with North Korea. 

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE SPOKESMAN:  If it was the desire of Kim Jong-Il to turn this into a two-party negotiation or standoff between the United States and North Korea, he blew it.  Instead, what has happened is that the United States continues to work with its allies in the region. 

(END VIDEO CLIP)

O‘DONNELL:  Well, we both have to admit, he‘s a pretty good press secretary, right? 

GILMORE:  Sure he is.  He‘s a fine press secretary. 

O‘DONNELL:  He‘s doing a good job for the president there.

GILMORE:  He‘s doing a good job.

O‘DONNELL:  But that point he blew it, that perhaps what North Korea did really backfired and that, you know, even officials today in some of the papers were saying this is probably the best outcome, scenario, because of the long-range missile essentially failed and went limp after 30 seconds, that this may now force China, South Korea and Russians to put more pressure on North Korea, imposing sanctions, etc.  How does the president come out of this? 

GILMORE:  My view is that the president is doing the right thing by treating this in a low-key way today when he came on, and Tony Snow is doing the same thing.  I think the diplomatic initiative is the correct one. 

I would advocate, though, defining the roadmap ahead, and laying down some markers for the North Koreans and saying look, you may think that playing chicken is fun and that maybe this is some leverage that you can get but, you know, we can put a lot of leverage on the table here and that includes, by the way, our relationship with Russia and with China as well. 

And if they will not cooperate in containing this threat, we have a lot of relationships also with the Chinese and Russians that are much to their benefit also, and these kinds of benefits don‘t have to continue unless they begin also to help us and the rest of the world also with this kind of threat. 

O‘DONNELL:  You are the former chairman of the Republican National Convention, so you know a lot about politics. 

And let‘s turn to the other big hot topic of the day, and that was illegal immigration, and the president earlier today went to a Dunkin‘ Donuts around here, and not for coffee and doughnuts, but actually to talk about illegal immigration and here‘s what he had to say. 

(BEGIN VIDEO CLIP)

BUSH:  I know there needs to be a worker program that says you can come here on a temporary basis and work here legally for jobs Americans aren‘t doing. 

(END VIDEO CLIP)

O‘DONNELL:  And yet, the “New York Times” reported today on the front page that “Republicans both inside and outside the White House, say Mr.  Bush, who has long insisted on a comprehensive reform, is now open to a so-called enforcement first approach that would put new border security programs in place before creating a guest worker program or path to citizenship for people living in the United States illegally.”

Governor, sounds like the president is caving to his conservative base in an election year. 

GILMORE:  Well, is should.  This needs—sure, this should be, in fact, an enforcement type of approach.  We should secure the borders, but I have an approach that is actually a middle ground between these two places that I think would be better, and that is you should have a registration for people, but it should not be an automatic path to citizenship.  Americans work all over the world as expatriates.  People ought to be able to get registered in this country, so we know they‘re here, we can actually have control of these illegal immigrants, but they can work here, but it is not an automatic path to citizenship and then we should move ahead to a more comprehensive reform. 

O‘DONNELL:  This is a president who since when he was Governor of Texas said family values do not end on the Rio Grande River, which separates Texas from Mexico.  He has been straight on this issue with people, he has been consistent on this issue, which is we have to be compassionate, this is the part of compassionate conservative, to those illegal immigrants in this country.  It sounds like now he‘s willing to get a deal with the House and give up what has been his long position on this issue, just in order to please conservatives in an election year. 

ROSEN:  That sort of middle ground that the governor just talked about is actually very close to what the Senate bill, the bipartisan Senate bill, does and the fact is that the president‘s own party in the Republican-led House has said forget it, Mr. President, you‘re not getting your way.  He has no choice, if he wants a bill, which he has again staked his presidency on this past year, he went on national television, the only way he‘s going to get a bill is to make the House Republicans happy.  Last session has major legislative reform with Social Security, he failed miserably, because he didn‘t listen to the Congress.  This year, he risks doing that again unless he listens to the right wing of the party.

O‘DONNELL:  The president wants a bill, but the members of his own party, they want an issue. 

GILMORE:  No.  Fair enough, what she has said, but however, the fact is that the real problem here is this path was an automatic pathway to citizenship. 

ROSEN:  Who‘s automatic path to citizenship?

GILMORE:  Kennedy and McCain‘s automatic path to citizenship, and I don‘t think that the way we should go.  And you need to go all that way in order to reach a compromise between the House and Senate. 

ROSEN:  Well, it‘s phased in, but as a practical matter, where we are is that the Senate has a desire to work a bipartisan bill.  The House does want an issue.  The Republicans are saying anything we do on immigration, the public is going to punish us for in the immediate term.  The president is saying over the long term, we want to make sure these citizens believe that the Republican party is the party of inclusion.  This is a political fight, we‘re three months away from the election. 

GILMORE:  We should be the party of inclusion, but it doesn‘t mean that you have to automatically have some path to citizenship.  Other countries around the world don‘t do that for Americans.  You can secure the borders, you can have a registration program, you can have an immigration reform and you can have expatriate Mexicans working in this country. 

O‘DONNELL:  Well Governor, with all due respect though, some would argue that it‘s not an automatic path to citizenship, but what you called the McCain-Kennedy bill would not say all of a sudden, hey all you 12 million illegals in this country, here‘s your card and you‘re here legally, and now you can vote tomorrow in the election, in fact, there are a series of penalties in place, there are fines that have to be paid.  You have to be here a certain time period, some people would have to go back.  So it‘s not, as you describe it, an automatic path to citizenship, am I right? 

GILMORE:  I think the Kennedy-McCain bill is perceived that way. 

O‘DONNELL:  By the party?

GILMORE:  I think by all Americans. 

ROSEN:  No, not by all Americans.  I think Americans do want a solution to this problem, but they actually believe the president is right when he says you know what, what are we going to do just take all these people and figure out a way to send them back or to punish them permanently, that‘s simply not going to work.  So it is in the Republican hard right interest to characterize a compromise that exists in the Senate as being too easy on immigration. 

O‘DONNELL:  Can I point something out, because I read this front page of the “New York Times” story today and I said this is smart politics by the White House, leaking to the “New York Times.”  You know they bemoan all those leaking guns of the “New York Times,” but in this instance, somebody from the White House, and I can probably guess who it was, leaked this to the “New York Times” on a day when low and behold, the president has an events in Virginia talking about this, in a Duncan Donuts, there are Congressmen in Pennsylvania and California having town hall meetings on immigration.  This is a carefully crafted White House strategy and the president said I‘m willing to give some ground on this.  Isn‘t this Karl Rove putting together a winnable strategy for Republicans in 2006? 

GILMORE:  All I care about is a program that begins to deal with this issue successfully, secures our borders and also is still welcoming to the people of the Hispanic community.  We can do all of these things consistently and if the president is signaling that he‘s prepared to move in that direction, I applaud him. 

O‘DONNELL:  But as the former chairman of the Republican National Committee, it smells like a Karl Rove game plan being played out here. 

GILMORE:  You know what?  I don‘t care.  All I care about is whether it‘s good policy.  

O‘DONNELL:  There you go.  We‘ll be back with Hilary Rosen and Jim Gilmore.  Later, anti-war activist Cindy Sheehan goes on a hunger strike against the war in Iraq.  What until you hear what she says on HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

O‘DONNELL:  We‘re back with Democratic activist Hilary Rosen and former Virginia Governor and RNC Chairman Jim Gilmore.  Let‘s turn to the issue of Senator Joe Lieberman, as I call this where‘s the Joe momentum?  This guy was almost Vice President of the United States in one of the closest presidential elections in history.  He‘s got an anti-war Democrat running against him.  Al Gore won‘t back him, his own previous running mate.  Hillary Clinton is now saying she won‘t back him in the primary.  Hilary, what‘s going on in the Democratic Party?  Do they want these anti-war challengers to beat Joe Lieberman?

ROSEN:  Well, I think both of them have said that they wish him well and that they hope that he wins the primary and wins the election.  The issue is more about Joe Lieberman.  The Joe Lieberman, me, me, me.  This is the guy who started his career as political reformer, saying that Lowell Wicker (ph), you know, Mr. Independence, had gotten too buddy, buddy with the Republicans and that we needed a true progressive in that seat.  And then he doesn‘t resign his Senate seat when he ran for vice-president, just to make sure, in case he lost, he would still be a senator.  Sorry, you only get a few breaks here.  If you‘re going to run as an independent, resign out of the Democratic primary and run as an independent, otherwise, this has nothing to do with the war for many of us. 

O‘DONNELL:  But ouch, and what does this tell us governor that an anti-war candidate could beat Senator Joe Lieberman?

GILMORE:  Well, I always say that when your enemy is destroying himself, don‘t interrupt, right? But I think this: I think that it really is an indication as we have seen over and over, that we start to begin to reward people who are breaking away from party loyalty. 

I think it‘s becoming more and more of a characteristic with Democrats and Republicans.  We reward people who break away from party loyalty.  The two parties are breaking down a bit.  So I don‘t know how this is going to come out, but I certainly hope the Republican comes out of it.

O‘DONNELL:  Thank you to Hillary Rosen and Jim Gilmore.  And when we return anti-war activist Cindy Sheehan is on a hunger strike to protest the war on Iraq.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to HARDBALL.  Cindy Sheehan is America‘s most outspoken anti-war activist.  But does she speak for America, or just the fringes?  She‘s called President Bush “the biggest terrorist in the world,” and she stood side-by-side with socialist dictator Hugo Chavez in Venezuela.

Now, she begins a two-month hunger strike to get the American people to join her mission to end the war.

Welcome to HARDBALL, Cindy.  Let me begin by asking you, you know, Americans may hate the war, but they don‘t necessarily hate the president.  How do you expect to get change by going around the world and trashing the president of the United States?

CINDY SHEEHAN, ANTI-WAR ACTIVIST:  Actually, I don‘t hate the president, either.  And I don‘t trash the president; I trash the president‘s foreign policy, which is fundamentally and inherently wrong and immoral.  And I don‘t tell people around the world anything that they don‘t know.

O‘DONNELL:  But you called him “the biggest terrorist in the world.” 

So you are trashing the president.

SHEEHAN:  Well, you know, he says a terrorist is somebody who kills innocent men, women and children, and there have been over 100,000 innocent men, women and children killed in Iraq on his orders.

O‘DONNELL:  Cindy, you have just begun a two-month hunger strike. 

Isn‘t this really just more of a publicity stunt?

SHEEHAN:  No, actually it‘s not.  It‘s a moral reaction to an immoral war.  Thousands of people all over the world are joining us.  And hunger strikes have proven to be effective tools in civil disobedience and changing policy.

O‘DONNELL:  But do you honestly expect Defense Secretary Donald Rumsfeld or the president of the United States to say, Cindy Sheehan is going on a hunger strike and so I‘m going to end this war?

SHEEHAN:  Well, that would be nice, but what we‘re trying to do is also awaken consciousness in the United States and around the world to get more people out and active, because we know two-thirds of America disapprove of George Bush and his policies in Iraq, but I don‘t see two-thirds of America out protesting, writing their congresspeople and changing policy.

O‘DONNELL:  And nor, quite frankly, do you see members of Congress—and you claim to not be in the fringes, to not be an extremist, and yet what members of Congress support you in your policy?

SHEEHAN:  Well, really on both sides of the aisle.  We have Ron Paul and Walter Jones, who are Republicans who are outspoken critics of George Bush‘s policies.  We have many on the other sides, just as John Conyers, Charlie Rangel.

O‘DONNELL:  And in the Senate?

SHEEHAN:  In the Senate, well we would have many supporters in the Senate too.

O‘DONNELL:  Who?  Who?

SHEEHAN:  John Kerry.

O‘DONNELL:  John Kerry supports an immediate withdrawal from Iraq. 

Did he tell you that?

SHEEHAN:  His office is working on starting a withdrawal as soon as possible to have the troops home by the end of the year.  He has—I have talked to his office about that, and that‘s something he‘s trying to push in the Senate.

O‘DONNELL:  Well, in fact, the bill that Senator Kerry has proposed went down in flames in the Senate.

SHEEHAN:  Yes, it did but, you know, only—you know, in Vietnam, there was only a few senators at first, and then it turned around.

O‘DONNELL:  Let me challenge you on this, Cindy, because what you‘re calling for is, in fact, an extreme position, because there are very few members of Congress who support immediate withdrawal.  You would, if you could, fly a bunch of planes over there, pick up all our troops and take them home tomorrow, if you could, if it was in your power.  There is no one in the United States Congress, Democrat, Republican or Independent who would do that.

SHEEHAN:  Actually, there are many members.  There‘s an “Out of Iraq” Congress that has 70 members that are calling for an immediate withdrawal.  And we can‘t fly planes over and pick them all up tomorrow.

O‘DONNELL:  Right.

SHEEHAN:  You know, it would take a few months, and it has to be safe for our soldiers and as safe for the Iraqi people as possible, but it has to be as soon as possible.

O‘DONNELL:  You speak very passionately about your cause.  You lost a son in Iraq.  We honor his service and sacrifice.  But you‘ve been traveling the world—Scotland, Spain, Venezuela, Ireland, Australia, Austria—how does that help the cause when, again, you‘re around the world trashing the president, calling him a terrorist, calling him worse than Osama bin Laden.  How do you honestly expect to affect change with those types of remarks?

SHEEHAN:  Well, it‘s really important too that the people in the world know that there are Americans on their side, because as anti-Bush sentiment goes up in the world, anti-American sentiment goes up also.

And people—I‘ve had hundreds of people around the world tell me before you, we thought all Americans supported George Bush.  And it‘s important for us, people of different countries in different borders, to reach out to one another to work to force our leaders to solve problems peacefully.  And this is really important.

O‘DONNELL:  But why go stand side-by-side by Hugo Chavez in Venezuela?  Why do that?  I mean, it sounds like—would you rather live under Hugo Chavez than George Bush?

SHEEHAN:  Yes.  You know, Hugo Chavez is not a dictator like you introduced him.  He‘s been democratically elected eight times, and he‘s not anti-American.

O‘DONNELL:  Saddam Hussein was democratically elected.

SHEEHAN:  Yes, hold on a second.  He is not anti-American.  He has helped the poor people of America.  He has sent aid to New Orleans.  He has sold heating oil to disadvantaged people in America, in the United States of America at low cost, and he—the people of his country love him, and for us to say that we have some kind of influence over Venezuelan policy is wrong. 

The people of Venezuela have elected him overwhelmingly eight times, and it‘s his country, and it‘s their country and they should have the leader that they deserve, that they want.

O‘DONNELL:  All right, Cindy Sheehan, thank you for joining us.

SHEEHAN:  OK, thank you.

O‘DONNELL:  And tomorrow night at seven Eastern, live HARDBALL coverage of the Connecticut Senate debate between Democratic Senator Joe Lieberman and his challenger on the left, Ned Lamont, whose anti-war candidacy has been gaining momentum.  That‘s 7 p.m. on HARDBALL.  Now it‘s time for “THE ABRAMS REPORT.”

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

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