updated 8/9/2006 11:41:32 AM ET 2006-08-09T15:41:32

Guests: Sean Smith, Joe Trippi, Alan Schlesinger, David Lightman, Mike Allen, Andy Pergam

CHRIS MATTHEWS, “HARDBALL” HOST: Connecticut Democrats spoke loud and clear tonight when they handed a primary defeat to Senator Joe Lieberman.  He heard them and said he‘s going to keep running anyway.  Primary winner, Ned Lamont, sees the anti-war and anti-incumbent feelings that are being felt all across the country.

Let‘s play “Hardball.”

Good evening.  I‘m Chris Matthews.  And welcome to a special election night edition of “Hardball,” live from WVIT in New Haven, Connecticut.

It‘s 1:00 a.m. on the east coast and we have a winner in the Democratic Senate primary.  Newcomer Ned Lamont beat three term Senator Joe Lieberman, one of the most prominent members of the Democratic Party.  The election delivered a record turnout, but less than the projected 50 percent, in one of the most hotly contested primaries in recent memory.

This election could be the first sign of what the upcoming fall elections could be.  Tonight we have the reporters who have covered this race in the field and online.  We have the political analysts who can help us read the results and talk about the national implications of this race in Connecticut.

Plus, we‘ll show you the ecstasy of victory and the agony of defeat.  We begin this hour with NBC‘s Chip Reid, at Lieberman headquarters in Hartford.  Let‘s go right there.  Chip?

CHIP REID, NBC CORRESPONDENT: Hi, Chris.  I thought one of the most stunning things about this speech was that Joe Lieberman said he‘s running as an independent Democrat, but he made very clear that he‘s running as something that he calls “Team Connecticut.”  He said “Team Connecticut” consists of Democrats and independents and Republicans. 

He clearly is appealing to everybody across the political spectrum and, in fact, he will probably need people from the independent and Republican parties here in order to win after this snub from Democrats who have supported him in such a big way for such a long time.

And I‘ll tell you, if you look at the numbers, he could win this race.  I mean, there is big support for him among independents and quite a bit of support for him among moderate Republicans.  And with this nearly 50 percent support he got from Democrats, it‘s certainly something he could do.

Now, he is going to have to withstand a lot of criticism from people who say he‘s just not playing fair.  If you lose a Democratic primary, it‘s over.  If you lose, you‘re out and there‘s going to be a lot of criticism like that.

MATTHEWS: I can‘t hear you now, Chip.  OK, Chip, let me ask you about the problem of him running against the Democratic Party.  The Democratic Party has a candidate from the United States Senate, Ned Lamont.  He won the primary fair and square tonight.  No complaints.  He won with 52 percent to 48 percent.

Elections have been decided by many fewer votes than that, including presidential elections.

What excuse does he have not to accept the results of his own party primary?

REID:  Well, his excuse is basically that he believes the people of Connecticut, what he calls “Team Connecticut,” support him.  And I think if you look at the numbers right now, he may well be right, if you look at Republicans and independents and Democrats, he may well be right that the people of Connecticut support him and he does not seem concerned by the argument you‘re making, that if you lose a primary, you should be out. 

He does not seem to think it is unfair to proceed.  I think that‘s partly because he thinks that the Lamont campaign itself was very unfair in how it characterized his positions.  So I think that is partly the reason.

But I‘ll tell you, he‘s going to come under a lot of criticism in coming days for now playing fair.  And Joe Lieberman is very well known for being a fair person and when he starts to get hit with these arguments from editorials and Democrats and other people across the nation that he‘s just not playing fair, will it change his mind?

It sure didn‘t sound that way tonight.  He sounded absolutely 100 percent determined to go ahead with this.

MATTHEWS: OK, well, thank you very much, Chip Reid.  When we return, Lieberman campaign manager Sean Smith will be with us and later we‘ll talk to the folks that are staying up late with us here in New Haven, Connecticut.

You‘re watching “Hardball‘s” coverage of the Connecticut Senate Democratic primary, only on MSNBC.

(BEGIN VIDEO CLIP)

NED LAMONT: Stay the course, that‘s not a winning strategy in Iraq and it‘s not a winning strategy for America.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to “Hardball.”  We‘re in New Haven, Connecticut, where Ned Lamont has beaten Joe Lieberman by four points, with most of the returns in now.

Right now, we‘re joined by Sean Smith, Senator Lieberman‘s campaign manager.  Sean, thank you for joining us tonight.  How did you close the gap?  You had, according to the Quinnipiac poll, almost a double-digit deficit with your primary challenger. 

How did you close so near to overtaking him?

SEAN SMITH, LIEBERMAN CAMPAIGN MANAGER: I think as it got closer to the election, voters realized the stakes in this election and a lot of them started asking themselves, “Do I really want to wake up on Wednesday morning without having Joe Lieberman as my U.S. Senator and replace him with a guy that I don‘t know very much about?”

And we really cut through a lot of the negative campaign advertising that had come from the other side, clarified Joe Lieberman‘s record, and let him talk about the future and what he wants to do for this state.

MATTHEWS: What loss did you suffer because of your crash of your Website and your e-mail capability this afternoon?

SMITH: It‘s hard to tell.  Turnout was higher than anyone expected.  So people did get to the polls.  People turned out.  The campaign Website and e-mail issue is going to be decided by law enforcement and the courts and the political realm will sort itself out.

MATTHEWS:  Let me talk to you, our last few questions now, about the future now.  You have from now to November to try to win a plurality of the votes in a three-way race against the Democratic candidate, Ned Lamont, and the Republican candidate, Alan Schlesinger.

How do you get a plurality of the votes?  What‘s your plan?

SMITH: Well, I think you heard Joe Lieberman talk about it tonight. 

Americans and people in Connecticut are tired of the partisan bickering.  They‘re looking for someone who can reach across partisan lines and cut through a lot of the cynical politics that we see out of Washington and be someone who can appeal to everybody.

I think Joe Lieberman has done that really for his 18 years in the Senate.  He‘s tried to do it in this campaign, but it was a tough Democratic primary, where the extremes of the party came out. 

But I think you‘re going to see him talk, as you did tonight, about the politics of purpose and unity and I think he‘s going to be successful.

MATTHEWS:  How is it going to work, as you see it?  Will Joe urge people to vote for Democrats, nominated Democrats, in addition to him for other offices?

SMITH: That‘s a good question, you know, and that stuff will all play itself out in the next few weeks and months.  You know, he always wanted to let all the voters of Connecticut decide his fate.

All the voters hired him 18 years ago.  They rehired him twice.  And he always wanted all the voters of Connecticut to have the say whether he stays or goes.

MATTHEWS: But what about the Democrats who are running on other ballot positions?  Does he support the Democratic slate, except for Ned Lamont?

SMITH:  I don‘t know.  I think that he‘s going to have to make that determination himself.  But, you know, the Democratic primary is over.  The general election began tonight and he is appealing to all the voters of Connecticut, not just the Democrats.

Does he support the other ones on the ticket?  He‘ll make that determination.

MATTHEWS:  Because he‘s running, I thought earlier you said or he said he‘s running as a Democratic independent.  Doesn‘t that mean he‘s running alongside the other Democratic candidates for office in Connecticut this November?

SMITH: He‘ll be a positioning candidate.  He‘ll be a registered Democrat today, tomorrow, the rest of his life.  He said he‘ll caucus with the Democrats if he‘s successful in being reelected.

I think he is going to be the guy who‘s always been progressive, Democrat, who votes with the party the vast majority of the time, but isn‘t afraid to reach out across the aisle and work with the other side to get things done.

That‘s who he is and that‘s who he‘s going to appeal to and that‘s the message he‘s going to appeal to voters with.

MATTHEWS: Does he have the support of the senior Senator, Chris Dodd?

SMITH: Again, those things will all sort themselves out over the next few days and weeks.  Right now he‘s just enjoying tonight with his family.  He‘s looking forward to starting the general election campaign tomorrow morning and some of these other things will work themselves out.

MATTHEWS: Do you believe, if you had a couple more days, you would have won the Democratic primary?

SMITH: Yes, I do.  You saw how fast things were closing in the final few days.  Again, as we made a case to voters that Joe Lieberman isn‘t the guy that Ned Lamont‘s been saying he is for the last four months, poured $4 million of his own money into a very relentlessly negative campaign.

Joe Lieberman spoke the truth a few nights ago in East Haven, with Max Cleland at his side, about his real record and his real position on Iraq, as well as his record of opposing George Bush on nearly every initiative of his presidency.  And when voters saw that, they came back home to Joe Lieberman and I think if we did have a couple more days, we might have had a different outcome.

MATTHEWS: Has there been any contact with the White House since the results came in tonight from your campaign?  Has the president called to console Senator Lieberman?  Have you heard any communication from Karl Rove or other people at the White House about what happened here in Connecticut today?

SMITH:  No, no, not at all.

MATTHEWS: Do you expect to hear from the president?

SMITH: I do not.  I do not.  I expect that Senator Lieberman is going to hear, though, from people his own party and from his friends and colleagues in the United States Senate and from well wishers all over the country, many of whom were here tonight and have been here in this campaign the last couple weeks, pitching in and doing everything they can to help him out and, you know, I think many of them are going to stick with him.

MATTHEWS: Are you going to ask or is your campaign or the candidate going to ask the president to come in to Connecticut and campaign for Senator Lieberman on the independent ticket?

SMITH: President Bush?

MATTHEWS: Yes.

SMITH: No, I don‘t think so.  I don‘t think so.  This is ...

MATTHEWS: Have you ruled out accepting an endorsement from President Bush?

SMITH: I can‘t imagine a scenario where President Bush would support Joe Lieberman.  This is a man who ran against him twice for national office, a man who has opposed him on nearly every initiative from tax cuts to the wealthy to social security privatization, and has been very critical, despite supporting the overall goals in Iraq, been very critical of the handling and the management of the war.

I don‘t think George Bush will be coming in to support Joe Lieberman.

MATTHEWS:  But George Bush kissed Joe Lieberman.  He kissed him on national television.  Don‘t you expect him to endorse him?

SMITH: No, I don‘t think so.  I don‘t think that that‘s a political marriage that exists.

MATTHEWS: Well, congratulations on a good showing tonight, Sean. 

You‘ve been a hell of a campaign manager in the last several days. 

Everybody‘s going to give you a tough time, but you‘ve been there before.  Congratulations.  It looks like it‘s going to be a three-way race this November.

Sean Smith, are you going to stay on in the general election?  Are you a campaign manager all the way to the end?

SMITH: We‘ll see, we‘ll see.  I hope to be.  We‘ll see what happens over the next couple days.

MATTHEWS: OK, thank you very much, Sean Smith, good sport tonight. 

Thanks for joining us late tonight.

SMITH: Thanks, Chris.

MATTHEWS: It‘s after 1:00 in the morning, as I said.  Joe Lieberman came in short, four points behind Ned Lamont, who got 52 percent to his 48 percent, with just about all the votes counted.

Joining me here, by the way, in New Haven, is a political expert, contributor, MSNBC‘s contributor, our own Mike Barnicle.  And on the phone is another insurgent, Democratic strategist Joe Trippi.

We‘re going to hear from Joe in just a minute, but, first, I want to give Mike the first shot at what we just heard.  Well, I know I was kidding there.  I was kidding a little when I did say he kissed him, don‘t you expect him to endorse you.

But it is interesting, it is interesting to have a guy who was rejected by his own party, who‘s been very supportive of the president on the initial decision to go into war with Iraq, has generally been seen as an ally of the president and it may not be so outrageous to assume that the president is rooting quietly now, not for the hopeless, perhaps, candidacy of Alan Schlesinger, but for this guy, Joe Lieberman, to win the general.

MIKE BARNICLE, “BOSTON HERALD”: Well, I mean, if Bush even ever gave the appearance, the hint of endorsing Joe Lieberman, whatever was left of the Lieberman independent candidacy would be in ashes.  I mean, he would be absolutely toast.

The interesting thing to me, Chris...

MATTHEWS: You mean I was taunting him, in other words.

BARNICLE: You think you weren‘t?  The interesting thing to me, in listening to the campaign manager, Sean Smith, talking about the Lieberman candidacy, the independent candidacy going forward, is it‘s basically, at its roots, it‘s an anti-Ned Lamont campaign more than anything else.

He‘s going to go at Ned Lamont.  He‘s not going to go for Democrats and Republicans and independents, obviously, hoping to pick up a majority of them to win back his job, but he is going to go after Ned Lamont.

What does he do?  Does he go out and trash this guy who basically looks like he could have been a stand-in for Cary Grant in “Mr. Blandings Builds His Dream House” there in Greenwich, Connecticut? 

How do you trash a guy who looks as amiable as Ned Lamont and coming from a guy who is amiable and gentle appearing as Joe Lieberman?  It‘s going to be an interesting contrast.

MATTHEWS: Well, let me go to Joe Trippi, who ran an insurgency on behalf of Howard Dean.  What do you make - is this the most breathtaking bit of spin you‘ve ever seen in your life?

Lieberman gets busted by an insurgency in his party.  He now claims that he‘s the insurgent.  He claims he‘s running against what he calls “partisanship” and he‘s now, having been rejected by his party, claiming that he‘s rejecting his party.

What do you make of that, Trippi?

JOE TRIPPI, DEMOCRATIC STRATEGIST: I just think this is audacious on Lieberman‘s part.  This thing is really audacious.

I mean, this is a huge, huge victory tonight, historic proportions.  I mean, not since 1974, I believe, have we had a U.S. Senator, incumbent U.S. Senator in the Democratic Party defeated by a challenger.

The challenger in that race was the sitting governor of Arkansas, Dale Bumpers, against Fulbright.  This guy wasn‘t beat by a sitting governor.  He was beat by a guy, Ned Lamont, who, a few months ago, no one ever heard of.

You know, the blogs should get a lot of credit for reporting the Lamont campaign, about Ned Lamont early, but it‘s really credit to people in Connecticut who knocked on the doors and who said they were going to fight for change and who did the impossible, really something incredibly bold of defeating a U.S. Senator, incumbent U.S. Senator.

This never happens and it happened like 34 years, I think, since the last one.  It‘s an amazing victory for Ned Lamont.  I don‘t care what the Lieberman campaign says tonight.  I don‘t think they‘ve got any salve to console themselves with this Lamont victory. 

MATTHEWS: Is this a big victory for the bloggers, the people on the political - I guess I don‘t want to put anybody in a category they don‘t want to be in - I guess it‘s fair to say on the left, though.

TRIPPI:  Well, I think the - look, the blogger sphere clearly is able to bring a lot of attention to candidacies that are not reported on by the mainstream media in the early stages.  And so I think, yes, a lot of “MyDD and “Daily Codes” and a lot of the blogs brought these campaign to the attention of a lot of people around the country.

But then what happened was Ned Lamont stepped up.  Tom Swan, his campaign manager, did a masterful job of organizing at the grassroots level, as did others in the campaign, and they got a lot of volunteers and grassroots support and this is really a victory of the people.

This was a people-oriented campaign.  It‘s a people-powered campaign, the likes that we started to see in 2003 with Howard Dean, and I think you‘re going to see a lot more of not just in 2006, but 2008.

What‘s happening here is power is devolving.  It‘s moving to the

grassroots.  Television and sort of the consultant class and the Democratic

both parties‘ establishments need to get a clue here that something different is happening in our politics.  People now can participate in ways they weren‘t able to before and they can make a big difference.

MATTHEWS: Joe Trippi, hold on there.  Joining us now from Lieberman campaign headquarters is MSNBC.com‘s Tom Curry.  Tom, what do you have to add to this?  It seems to me that you see an interesting battle of spin here. 

You‘ve got Lieberman claiming, having been defeated in his own Democratic primary, after all these years, that somehow he‘s had this epiphany, some recognition that the old politics of the party that brought him to the dance is somehow defiled and he‘s going to bring cleanliness to the political process by claiming he has no interest in being one of those soiled people in the Democratic party who engage in partisanship.

I don‘t know.  Is this going to work, do you think?

TOM CURRY, MSNBC.COM: Chris, to make any campaign work, you need money and I think a key question for tomorrow morning is what does Senator Schumer say, Chuck Schumer of New York.

It‘s not just what Senator Schumer says, but also how aggressive will Senator Schumer and other Democratic leaders be in trying to discourage Democratic donors from giving money to Senator Lieberman‘s campaign from now until November.

The network of donors that Senator Lieberman has were willing to finance round one of this battle.  But will they be willing to write another check for $2,000 for round two and will Senator Schumer be aggressively discouraging them from doing that?

MATTHEWS: You‘re asking a key question.  Will the Democratic party back the Democratic candidate?  Is there a doubt on your mind that they might back out here and secretly allow Democratic money to flow to the challenger, the third party challenger, Lieberman, now?

CURRY: There‘s only so much that the Senator Schumer and the other party leaders can do.  If you have an individual donor who‘s had a relationship with Senator Lieberman for many years and feels strongly about what Lieberman has done and his positions on the issues, then that donor will write that check.

But there is great damage potentially to the Democratic party here, because, remember, in these individual races, when I went across the state over the last six or seven days, the people who were most uncomfortable, Chris, were the local state reps, the state senators, the chairmen of the town committees in each of these towns, like East Haven and Waterbury and other places.

Those are the people who the local party will be divided.  There will be some Lamont people, there will be some Lieberman people.  And if you‘re running a campaign for the House of Representatives or for state legislature, you know, you could have two-thirds of your people supporting Lamont and the other one-third supporting Lieberman, and how do you get all those people to work together?

So it potentially is damaging to the party.

MATTHEWS: I thought it‘s also interesting that Sean Smith, the campaign manager for Joe Lieberman, said he can‘t tell us now whether Joe Lieberman will endorse other Democrats.  He hasn‘t even figured that out yet, hasn‘t figured out how they‘re going to deal with the senior Senator, Chris Dodd, up here in Connecticut, haven‘t figured out anything yet, how they‘re going to run this rebellious third party campaign against their own party.

We‘ll be back with more, with Mike Barnicle, Joe Trippi and Tom Curry.  The results are in.  Ned Lamont‘s the winner up here in Connecticut, with a  comfortable four point victory, actually, with all the votes in.  But it hasn‘t stopped Joe Lieberman.  I guess he‘s a sore loser, but he may well be a winner in November.

You‘re watching “Hardball” on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to “Hardball.”  Ned Lamont has won the Democratic nomination for the U.S. Senate in Connecticut, defeating Joe Lieberman by four points, a substantial majority.  But Joe Lieberman says he doesn‘t care, he‘s running as an independent.

I guess he calls himself now an independent Democrat.  He sure did lose the primary today.  Didn‘t bother him any.  He‘s dusted himself off and he‘s saying, “I‘m running in a three-way.”

We‘re joined right now by the third wheel in that race, Alan Schlesinger.  He‘s the Republican candidate as of today for the United States Senate up in Connecticut.

Mr. Schlesinger, you‘re now going to face two Democrats.  You‘ve got to beat both of them.  How are you going to do it?

ALAN SCHLESINGER, REPULICAN SENATE CANDIDATE: Well, in all due respect, I think it makes the job quite a bit easier.  A lot of people have said that because these two individuals have basically evaporated all of the oxygen in this race, that there‘s no room.

But I have to tell you I believe that we have an incredible chance of winning now that the Democratic vote is certainly split.  Some people have brought up the 1970 election.  For those of you who don‘t remember it, in 1970, Lowell Weicker won as a Republican, when the Democrats, in an analogous situation, split the vote.

We plan to hopefully repeat 1970 and be able to show the voters out there that there is only one conservative, actually moderate conservative in the race, and that is Alan Schlesinger.  And when we have the chance to really show what we are going to showcase in this particular race, I think it will be very clear that there are two very liberal candidates and one moderate conservative.

MATTHEWS: Well, would you call Joe Lieberman a dove on the war in Iraq?

SCHLESINGER: No, he certainly is not and my positions on Iraq probably are not quite as hawkish as his, because I‘d like to see the troops come home as soon as possible.  I think actually all three of us want to see that.

But on everything else, the entire domestic agenda, Mr. Lieberman, sometimes I mistakenly call him Mr. Kennedy, because we checked his record and it‘s almost identical to Ted Kennedy.  And when the average Republican and fiscally conservative independent voter finds out that Joe Lieberman talks right and votes left on everything other than Iraq, I think there‘s going to be a lot of explaining to do by Mr. Lieberman.

MATTHEWS: Would you have voted to send U.S. troops and occupy Iraq?

SCHLESINGER: Originally?

MATTHEWS: No.  Would you have done it when the vote came up in 2002?

SCHLESINGER: Oh, yes. 

MATTHEWS: So you‘re with Lieberman.

SCHLESINGER: I was.  I think the difference is where we have to go now.  I think Malaki has made it clear that he is going to replace our troops in an aggressive fashion. He has not done that.

I put out not a timetable, but I basically want to keep the feet to the fire of Mr. Malaki and say, “Listen, you said you were going to start replacing our troops with Iraqis that are trained.  Let‘s do it.”  I‘ve said at least 50 percent within the next 12 months.

Other than that, it‘s the commander in chief‘s decision.  President Bush has to make these decisions, but I want to keep the heat on the Iraqis.  I particularly was very upset with Malaki‘s comments about the recent violence in Lebanon.

MATTHEWS: Are you going to have a three-way TV debate, there are several of them up here in Connecticut, among yourselves, you, Lieberman and Lamont?

SCHLESINGER: The sooner, the better.

MATTHEWS: Have you got any commitments from the networks, the affiliates, any of them?

SCHLESINGER: I was just called tonight, as a matter fact, by someone who is working with the ABC affiliate.  I also spoke to the NBC affiliate that I was on a show on your network, called “Connecticut Newsmakers” this week, and they assured me there would be a debate and hopefully it will be in September. 

MATTHEWS: What percentage do you need to win this three-way bout?

SCHLESINGER: Well, as far as polling, I think we need to show that we‘ll be in the mid-20s, because what polling doesn‘t take into account, and you probably know this, as a veteran, Mr. Matthews, is that it cannot poll what a coattail effect shall be.

I‘m going to be positioned right next to a very popular Republican governor by the name of Jodi Rell.  I‘ll be directly next to her on the top line.

MATTHEWS: Right.

SCHLESINGER: That cannot be polled.  We believe that if we poll 25-26 percent, we will win this race.  Right now, in the Rasmussen...

MATTHEWS: With what?  What will you end up with?  What will be the winning plurality?  I want to know what your strategy is.  Are you hoping to get up to 40 or do you think you can win this at 37-38?  What do you need to win the general against both Lieberman and Lamont, the winner and the loser tonight?

SCHLESINGER: Thirty-seven and we believe a 25 poll number would translate to 37, with the coattail effect of Governor Rell on election day.  Right now, she has a favorability close to 75 percent with the voters.

If she polls in the mid-50s or even, unprecedented, to show 60 percent, it would be very, we believe, very makeable to turn a 25 percent poll number into a 37 percent victory.

MATTHEWS: Well, this is fascinating, because you know a lot people have talked to Chris Dodd, the senior Democratic Senator up here, the Senator from the state, and they‘re talking about fear, that the Republicans can win this Senate seat, you can win it, Mr. Schlesinger, because of the spoiler in this race, as they see it, and, that is, Joe Lieberman.

Do you think that Joe Lieberman is your best and only hope to win the Senate seat from Connecticut? 

SCHLESINGER: Well, actually, I think Joe Lieberman had won tonight...

MATTHEWS: Well, you said so tonight when we started this conversation, that you‘re better off now because Lieberman‘s in.  He creates a spoiler opportunity and gives you a chance to sneak past both Democrats, right?

SCHLESINGER: I think that‘s a fair analysis.  If I was going to straight head-to-head on Lamont, I think it would be very unusual and unknown what would happen.  But the three-way race is precedented, as I said.  It‘s precedented in Connecticut and we‘ve been very successful.  That‘s the last time the Republicans won the seat was with the analogous situation.

MATTHEWS: Are you going to send a thank you note, perhaps a cologned thank you note tonight to Joe Lieberman for giving you a shot at the U.S.  Senate?

SCHLESINGER: Well, I don‘t know if it will be cologned, but Joe‘s a wonderful man.  We just disagree on how we should approach the problems of the United States.  But I do thank the Democratic voters this evening for giving us an opportunity not just to have a three-way race, but to really showcase the differences between the three candidates.

And I think it‘s very interesting and I also think that the voters are going to have a real choice and I think that‘s great.

MATTHEWS:  Are any of your people that you beat today going to run against you in the general?

SCHLESINGER: I didn‘t beat anyone.  I got the nomination at the convention.  My two opponents, they endorsed me.

MATTHEWS: What do you make of a guy who loses a primary and says, “To hell with the primary.  I‘m going to run anyway?”

SCHLESINGER: Well, I think that‘s just a matter of polling, but, you know, I do have to just poke a little fun at Joe Lieberman.  I call him “Joey two-time,” because if you remember, in 2000, he ran for U.S. Senator and vice president and he had his name on the ballot twice.  And this year, I guess he wanted to try twice and have his name on the ballot twice, because I think he‘s calling his party the “Lieberman Democrat Party,” and then he‘ll have his name on as Lieberman.

MATTHEWS: I know, it‘s funny.  I have to laugh, because you‘re referring to a character in “GoodFellas,” Charlie two times, the guy that used to say, “Going out to get the papers, get the papers.”  It‘s interesting they call the guy running for the U.S. Senate by the name of a “GoodFellas” name.

Anyway, thank you very much.  That‘s a little bit of comic relief tonight.  Congratulations on winning the nomination and being a contender in this big three-way coming up here in November in Connecticut.

I also want to thank Tom Curry, who has been with us, Joe Trippi and Mike Barnicle.

Up next, much more on the national implications of Ned Lamont‘s victory up here in Connecticut.  Joe Lieberman has lost, lost substantially this election and promises to come back to battle what he calls “partisan behavior.”  Who else should be worried after this result tonight?

You‘re watching “Hardball” on MSNBC.

(COMMERCIAL BREAK)

BILL FITZBERALD, MSNBC ANCHOR: I‘m Bill Fitzgerald, and here‘s what‘s happening.  The energy secretary insists there are adequate oil supplies, in the wake of the shutdown of America‘s biggest oilfield in Alaska.  He cites high inventories and pledges by Saudi Arabia and Mexico to increase production.  Those assurances brought oil prices down 67 cents a barrel on Tuesday.

Israel has declared a no drive zone in southern Lebanon.  It is threatening to blast any moving vehicle within 18 miles of the Israeli border, except humanitarian convoys.  Meantime, ground fighting in southern Lebanon intensified Tuesday, with more than 160 Hezbollah rockets hitting northern Israel.

All that as the U.N. Security Council met on a U.S.-French cease-fire resolution.  Lebanon raised objections, saying the draft resolution gives too much to Israel.

As expected, Federal Reserve policy-makers left interest rates unchanged Tuesday.  It was the first meeting in more than two years where they did not raise rates.

And national football league team owners chose Roger Goodell to succeed Paul Tagliabue as NFL commissioner.  He was Tagliabue‘s top assistant.

You‘re up to date.  Let‘s go back now to “Hardball” and Chris.

MATTHEWS: Welcome back to “Hardball.”  Ned Lamont is the big winner here in Connecticut.  He won the Democratic primary 52-48 over incumbent, three term Senator Joe Lieberman.  But Lieberman refuses to die.  He vows to run as an independent in November.

We‘re joined right now by “Hardball” correspondent, my friend David Shuster, and “Time Magazine‘s” Mike Allen.  They‘re together down there in Washington at our studio.  And the “Hartford Courant‘s” David Lightman.

In deference to the local fellow, let‘s go to David Lightman.  You know, I figured this was going to go to about seven, he would win by about 71 by about four.  What happened over the last couple of says of this campaign, as you watched it, David?

DAVID LIGHTMAN, “HARTFORD COURANT”: Well, people remember the Joe Lieberman that they‘ve known for 30-some years.  They remembered how he marched in their picket lines.  They remembered how he helped with their Medicaid applications. 

And we talked about this the other day on the show, it was a struggle between do you vote on Iraq or do you vote on your friend and neighbor, and he began to close it, because people remembered the good old Joe they used to know and that closed the gap.

MATTHEWS: What about the Schiavo case?  I‘ve been hearing up here, I‘ve only been up here a day and a half, and I keep hearing liberals, I guess it‘s fair to say, you would think would be with Lieberman, upset at the fact he joined in that kind of intervention by Congress in the Schiavo matter down in Florida.  That bothered them.

Did they just sort of kiss that off and voted for Joe or what?

LIGHTMAN:  Yes, again, the vote was so divided.  There were people who were angry about Iraq, but they were also angry about stuff like Schiavo.  They‘re angry about all the moral stuff of Hollywood.  They‘re angry at faith-based initiatives.

They‘ve had enough of that.  But then there was that other half and if you look at the vote, he got a lot of support in the Naugatuck Valley, which is a very blue collar area in Connecticut.  It was almost a blue collar-white collar split in a lot of areas.

Somebody was saying to me, “It‘s almost the Bobby Kennedy coalition” from 1968 who voted for Joe Lieberman.  Of course, a lot of the people who voted for Bobby Kennedy aren‘t around anymore.  But it‘s that same idea, the old working class and that‘s what he got.

MATTHEWS: Sounds familiar.  It sounds to me, David Shuster, like the thing I grew up with in a big city, in Philadelphia, the working class people tend to be loyal to the people in charge.  They are loyal to the politicians they‘ve elected over the years. They trust them. They‘re not just sort of the whimsical, more carefree upper classes.

DAVID SHUSTER, “HARDBALL” CORRESPONDENT: Well, Chris, you‘ve put your finger on what may be one of the most intriguing things over the next couple of days and that is tracking Joe Lieberman‘s support among the working class, because one of the great ironies that we saw tonight was there was Joe Lieberman telling a nationwide television audience, “If you want to give me money, go to my Website.”

In other words, he was making a national appeal as a national figure and, yet, what got him in trouble in the first place, at least partly, was the fact that he seemed out of touch, as Mike Barnicle, was pointing out, with some of the local interests, the local constituents, their needs and their identification.

And so how that‘s going to wash over the next couple of days, I think, is going to be fascinating.

MATTHEWS: Let me go to Mike Allen.  Here‘s a guy that got rejected by his own political party up here.  He wasn‘t smashed.  He just lost by four points.  If he can get reelected to the Senate without the Democratic party, they‘re not going to have a single thing to do with him.  He‘ll be able to just say, “Go away, I don‘t want to go to your stupid meetings.  I‘m down here in Washington doing the big stuff.  Forget your stupid meetings and caucuses and fund-raisers.  I beat you bums last time, I‘ll beat you again.”

MIKE ALLEN, “TIME MAGAZINE”: Well, Chris, great coverage tonight.  And you‘ve put your finger on one of the driving forces behind this independent candidacy.  You know, the Republicans tonight were sending around an old clipping with the headline, “Joe Obituary.”  But it‘s a little soon.

Chris, tonight I talked to one of Senator Lieberman‘s senior advisors, Dan Gerstein, and he made the point, “When was the last time the Democratic Party helped someone get elected?”  These candidates are getting elected in spite of the Democratic Party rather than because of it.

And he says, “Look, the Senator has $2 million on the bank.  He‘s running against somebody who‘s angry, which is not either effective in governing or particularly appealing in campaign,” and, Chris, I think you and I agreed that when somebody like former President Bill Clinton calls up Senator Lieberman and asks him to get out, it will be hard to resist.

But Dan said this was a point of no return speech and that they‘re plunging into it.

MATTHEWS: You mean this is a candidate who has used his own political party for his sister soldier moment, Mike.

ALLEN: Well, what‘s so amazing about this, Chris, is but for 500 votes, he would be the sitting vice president of the United States and here you point out he‘s sort of turning his back on the party.

There‘s an amazing turnabout going on here.  Chris, you could look at this set of facts and say that what tonight shows is that association with the president, association with the war can be politically fatal.  At a time when the world is basically a flaming cauldron, that there‘s these great discontent.

Tomorrow, Adam Nagourney‘s analysis in “The Times” talks about an anti-incumbency win.  But instead Republicans are going to - opportunists are going to seize on this and use it to talk about the defeatocrats, the cut-and-run party, and use this set of facts to basically portray Democrats with the caricature Republicans have long wanted to.

MATTHEWS: Let me go to David right now, David Lightman.  It seems to me that Joe Lieberman has a pattern now.  When he ran for vice president, because he was very courageously, I think, nominated by Al Gore back on 2000, he said, “Well, I‘m not that courageous.  I‘m running for reelection simultaneously.” 

This time around, he said, “Yes, I can beat Ned Lamont, but if I can‘t beat him, I‘m running as an independent.  I‘m staying on the ballot.”  I mean, he‘s almost a human hedge fund.

I mean, is this going to be the future of politics, everybody gets two shots?

LIGHTMAN: For me, he‘s more than a hedge fund, he‘s job security.  But that‘s another issue.

The good news about Lieberman is that he - it depends how you look at him.  On the one hand, he feels he‘s a man on a mission.  He has certain things he wants to accomplish.  He believes you have to work with people to get things done, et cetera, et cetera, et cetera.  So it doesn‘t matter what your party label is. 

Now, the flip-side is he‘s an ambitious politician and if he can‘t get the nomination, he turns around and runs as an independent.  By the way, something you said before, he says he‘s going to caucus as a Democrat, he‘ll stay a Democrat.  I mean, look, if Democrats retake the Senate, he becomes chairman of that Homeland Security Committee.

So he needs to stay a Democrat.

MATTHEWS:  So it‘s no harm, no foul as far as the caucus is concerned.

LIGHTMAN: Right. I mean, Harry Reid needs Joe Lieberman as much as anyone.  Suppose you come back with a 51-49 Senate.  I can‘t see it, but the thing we keep asking is suppose, Joe, it‘s December 15 and Mitch McConnell and Bill Frist comes to you and says, “Joe, we‘ll give you armed services if you‘ll just come over.”

Now, he swears he‘ll stay a Democrat, but let‘s see.

MATTHEWS: Well, that‘s fascinating.  We‘ll come back and talk about which way Joe will go if he gets back in, with David Shuster, Mike Allen, and the interesting David Lightman. 

This is “Hardball,” only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: We‘re back, from New Haven, where Ned Lamont has defeated Senator Joe Lieberman by four points.  He won 52-48, with all the votes in, in the Democratic Senate primary.

I‘m back with David Shuster, “Time Magazine‘s” Mike Allen, and the “Hartford Courant‘s” David Lightman, who raised an interesting, I guess, clawing possibility, which is Joe Lieberman could win the general with mainly independent and Republican votes and decide that, after all, he is a Republican and help the Republicans hold on to their leadership.

Do you think there‘s a good chance, small chance, slight chance of that happening, David?

SHUSTER: I wouldn‘t close the window.  I think it‘s a very slight chance, but suppose we go through this campaign and Democrats just beat up on Joe Lieberman.  I mean, Ned Lamont‘s going to just come after him.  He‘s going to have a lot of the Democratic establishment on his side. 

And what if Joe Lieberman wins in November and says, “Wait a minute.  Why I should I be beholden to this gang?”  And then, again, Mitch McConnell whispers in his ear, “Look what we can do for you.”  Now, that would be a tough one for Lieberman.  He really is a Democrat.  He‘s a lifelong Democrat.  He believes in what the party stands for.

I can‘t see him switching, but, again, who knows.

MATTHEWS: We‘re going to go to Mike Allen.  Mike, I want to ask you about this question of who is going to control the Congress.  What do you read in this election?  Certainly, the anti-war candidate won.  The hawk lost.  Is that a significant message to Hilary Clinton that she‘s got to get out of that parking place she‘s put her car in, which is, “I was for the war, I‘m still for the war, I don‘t like the way it‘s being managed.”

Is that parking place now no parking?

ALLEN: I think the meter‘s run down.  Chris, something amazing here has happened, which is that, as a result of this, a new base in the Democratic party, these bloggers, these younger people, as opposed to the traditional base, like union members, has been empowered by this and Senator Clinton, no question, is going to have to deal with that.

A consequence of this could be she may do something that Republicans never hope for their in their wildest dreams, which is that Senator Clinton may have to move to the left, which would make it so much easier for them in ‘08. 

Chris, I talked to a lot of Democrats tonight who are very morose about this.  They believe that this result, for the reasons you were just pointing to, is going to make it harder for them to take back the House and harder in ‘08, because these candidates are going to have to be dealing with this.

At a time when the president, the Republicans should be back on their heels, tomorrow, you‘re going to see the Republican Chairman Ken Mellman out saying that this is a turning point in the history of the Democratic party, as it turns away from FDR and Jackson toward Michael Moore and move on.

And, Chris, to make some news for you, you‘re going to hear the vice president out this week likely making the same point about the party of the cut-and-run.

MATTHEWS: Well, that may be true, but the FDR coalition included a lot of segregationists, let‘s not forget.  Tents can be too big.

David, let me ask you, Shuster.  Is this for a good close election this fall?

SHUSTER:  Absolutely, I mean, it‘s great for us.  I‘m going to disagree with Mike.  I think it‘s not a bad thing for the Democratic Party, given that Joe Lieberman - I mean, he was an outlier.  All the Democrats know it.  It might be smart politics for the Republicans to portray the Democratic Party as cut-and-run.

But, again, I think the message is also sent to Republicans.  Many Republicans are going to feel that they need to start distancing themselves from President Bush.  Many Democrats are going to start being more aggressive, they‘re going to feel more confident both for their own internal party politics, to start attacking the president.

And then, again, to get to what David Lightman was saying, I don‘t think you‘re going to see Democrats come out and trashing Joe Lieberman.  We‘re already picking up signals tonight that, yes, there‘s going to be a news conference tomorrow, Schumer, Durbin and others are going to say, “We support Lamont.”

But there‘s a difference between having a news conference and saying, “We support Lamont,” and giving tons of money to Lamont and actively trashing Joe Lieberman.  The latter is not going to happen.

MATTHEWS: I can‘t wait to see.  In fact, it might be interesting if just that happens.  Thank you, David Shuster, Mike Allen, David Lightman.  It‘s great to have you all up here tonight.

Up next we‘ll talk to the crowd here in New Haven.  They‘re out here with me.  This is “Hardball” on the streets of New Haven, on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: We‘re back in New Haven and we‘re joined right now by “WVIT” TV‘s Andrew Pergam.  Andrew, you‘ve been wonderful this morning.  We‘ve been around.  What a day, we went out and we caught - we went over to the area which is frequented by Yale types, the upper brows, and we met them and they were all for Lamont.

Then we found Joe Lieberman voting and he was great to talk to us.  Then later in the day we caught the guy who won, Ned Lamont‘s casual lunch in an outdoor caf’.

ANDY PERGAM, “WVIT”: Well, that‘s the interesting thing and you‘re talking about how they‘re relating.  While Lieberman was canceling some events around Connecticut and wasn‘t showing up for some of these things, Lamont was casually sitting back, relaxed, having a nice leisurely lunch, it seems.

MATTHEWS: I thought I was on Montparnasse, on the left bank there, in this caf’, as he allowed himself all the time in the world to have lunch.

Why were they so resting easy after a long campaign?

PERGAM: That‘s a good question. They knew they had the ground troops. 

They knew they had people out there in the field getting things done out there.  They had the bloggers.  They had all these people who were - so many of them were anti-war and that‘s what he ran on.  That‘s what their big issue is.

MATTHEWS: Let‘s allow our bleeding hearts to speak right now.  Everybody was hoping for either a blowout, which had Lamont really making history, or for good old Uncle Tonoose to save the seat, and it was neither.  It was somewhere vaguely in the middle, right?

PERGAM: Right, and what‘s going to be interesting, too, is that you‘ve got a 146,000 to a 136,000.  So you‘ve got a lot of people.  Every two Lieberman people to one Lamont person, those two Lieberman people are so into this, they‘re for Lieberman rather than anti-Lamont and you don‘t see that the other way around.

MATTHEWS: So what do you think?

UNKNOWN MALE: What do I think?

MATTHEWS:  Yes.

UNKNOWN MALE: I‘m glad that Lamont won.

MATTHEWS: What do you think?

UNKNOWN MALE: I think it‘s a wonderful example of American burlesque.

MATTHEWS: American burlesque, OK.  What do you think?

UNKNOWN FEMALE: It feels like America is on a change and we‘re just here to watch it.

MATTHEWS: You‘re right, there‘s change going on.  Something‘s happening here.  Anyway, thank you, Andy Pergam, my pal all day today,  from the local channel 30, we call it NBC 30. 

Goodnight from everybody, for everybody, from New Haven, a great city, coming back here at MSNBC.

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

END   

Copy: Content and programming copyright 2006 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2006 Voxant, Inc. (www.voxant.com) ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and Voxant, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

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