updated 9/5/2006 11:35:40 AM ET 2006-09-05T15:35:40

Guesst: John Bolton, A.B. Stoddard, Chuck Todd, Ron Reagan, Terry Jeffrey

NORAH O‘DONNELL, MSNBC HOST:  Nine weeks until election day with violence rising in Iraq.  Today, the Pentagon released a report that says conditions could lead to civil war.  Let‘s play HARDBALL.  

Good evening.  I‘m Norah O‘Donnell in for Chris Matthews.  Welcome to

HARDBALL.

Today on this Friday before the long Labor Day weekend, the Pentagon released its quarterly report to Congress, stating conditions could lead to civil war, and they exist in Iraq.  The report goes onto say that sectarian violence is spreading and concern about civil war and the citizens of Iraq have increased in recent months. 

The report comes as President Bush, Vice President Cheney and Defense Secretary Donald Rumsfeld launch and all-out campaign to defend the administration‘s war in Iraq just weeks before the Congressional elections.

So is the Bush administration trying to bury this negative news by releasing it on a Friday before the long holiday weekend?  In a moment—and we‘ll also talk to John Bolton, who is the U.S. ambassador to the U.N.  about Iran. 

But first, we want to begin with NBC‘s Jim Miklaszewski from the Pentagon.  Jim, tell us about this report. 

JIM MIKLASZEWSKI, NBC NEWS CHIEF PENTAGON CORRESPONDENT:  Well, Norah, whatever the politics may be, there was no burying the facts in this report.  It was a pretty hard-hitting, straightforward report about the stability and security operations in Iraq over the past three months. 

And senior Pentagon officials called it both “sobering and disturbing.”  It cites that over the past three months since May, that attacks in Iraq have been up 15 percent.  Casualties soared more than 51 percent.  Now in July alone, in Baghdad, 1,800 civilians were killed in that wave of sectarian violence, and 90 percent of those were executed. 

And there are even more ominous underlying factors, perhaps, in that the report cites that the sectarian violence which has been largely confined to Baghdad is now spreading northward as far as Kirkuk, and that rival Shia militias are now engaged in deadly turf wars down in the south, including the city of Basra. 

And there‘s also another underlying development which many find disturbing, and that‘s the fact that many Iraqis who were opposed to the sectarian violence are now so threatened by it that they actually have to buy into it—it‘s sort of like the Stockholm Syndrome—and that some of these armed, unlawful militias are now providing more security, even social services, than the government of Iraq itself—Norah. 

O‘DONNELL:  Mik, do the dire warnings in this report square with the rhetoric we have heard from the secretary of defense, Donald Rumsfeld? 

MIKLASZEWSKI:  Well, you know, it was General John Abizaid, the commander of CENTCOM, who first said before Congress that he thought that conditions were ripe for a possible civil war.  After a couple of weeks, he backtracked a little bit and he thought civil war was far off. 

You never hear the secretary use the words, necessarily, civil war.  He tries to avoid that.  While he acknowledges conditions do exist he doesn‘t believe that—he‘ll tell you that there is not a civil war today.  And that is the fact based on the fact that the government of Iraq is still intact and the security forces there are still loyal. 

But there are a lot of factors at work here which have U.S. military officials and many Iraqis who, in recent polls, indicate that they are now more concerned that a civil war could break out in Iraq than ever. 

And there are even reports that some of the Shia who were opposed to civil war have had about enough and are now considering the idea of taking up arms in an eye for an eye, tooth for a tooth scenario. 

O‘DONNELL:  Mik, U.S. troops levels in Iraq have increased recently. 

As this report makes clear, sectarian violence is spreading beyond Baghdad.  You mentioned that.  This is an election year.  Is there any indication, though, that more troops will be coming home before November?  It seems like it would be highly unlikely given the dire situation. 

MIKLASZEWSKI:  Interestingly enough, General Casey, the commander of ground troops in Iraq, said recently that he thought there could be some reduction in troops.  But I have got to tell you, nobody is talking about any significant reduction in the number of American troops in Iraq before the end of the year. 

And actually, I got a look at a classified report recently.  It was a flow chart of sorts, and it had the number of American troops at the current level almost flatlined for as far as the eye could see. 

O‘DONNELL:  Wow.  Thank you.  NBC‘s Jim Miklaszewski at the Pentagon. 

Iran is refusing to comply with a deadline to halt its nuclear program.  Iran says it can‘t be bullied, but can it be stopped? 

John Bolton is the U.S. ambassador to the United Nations.  Welcome, Ambassador.

JOHN BOLTON, U.S. AMBASSADOR TO U.N.:  Glad to be here.

O‘DONNELL:  Iran is once again refusing to comply with this deadline.  Do you have any confidence that the U.N. Security Council would agree to sanctions?

BOLTON:  I don‘t think we know at this point.  I think this is going to be a major test of the Security Council, to see whether it‘s capable of dealing with the serious proliferation threat that Iran poses.

Now, the foreign ministers who are the five permanent members of the council, plus Germany, have agreed that if we came to the point that we‘ve reached, that they would seek sanctions in the Security Council.  So we‘re certainly prepared to do that when we get the instruction to proceed up here.

Whether the council will actually produce a resolution with sanctions remains to be seen.

O‘DONNELL:  Well, your good friend, Russia‘s foreign minister, Mr.  Lavrov, said today that he thinks sanctions are a dead end.  So, clearly, the Russians have signaled they‘re not willing to agree to any sanctions.

BOLTON:  That, of course, would be a contradiction to what he signaled in June, when he signed on with Secretary Rice and the other foreign ministers to do just that if Iran declined to suspend its uranium enrichment activity.

I have a feeling that when we get down to cases and actually put a resolution on the table, we‘ll find out more specifically.  But as I said at the beginning, this really is a test for the Security Council. 

If we can‘t deal in the council with a proliferation threat like Iran, then I think that tells us a lot about the utility of the council and the global struggle against proliferation of weapons of mass destruction.

O‘DONNELL:  But as you know, Russia and China have economic interests and other reasons why they don‘t want sanctions on Iran.

If the U.N. Security Council does not agree to sanctions, what good options do you have left?

BOLTON:  The possibility of sanctions in the council has always only been one part of the effort that we‘re prepared to undertake against Iran.  There are a number of other steps we could take.

Most significantly, lots of countries can impose sanctions on Iran without action by the Security Council, the European Union, Japan, others.  Just as the United States has unilaterally imposed almost total economic sanctions in terms of bilateral transactions, other countries could do the same thing.

But I want to come back to the council for a second.  It‘s not at all clear that Russia or China would actually veto a resolution in the Security Council.  They may not support it, but if they acquiesce in it by abstaining, that still leaves open the possibility that the council could act.

O‘DONNELL:  Ambassador, I must ask you, because since 2002, we have called Iran part of the axis of evil.  The president, Ahmadinejad, seems emboldened.  He says, “I‘m not going to be bullied.”

The U.S. keeps talking about consequences and, yet, there have not been consequences.  And the Iranians, many experts say, keep calling our bluff.  Does the U.S. look impotent?

BOLTON:  Well, one of the things that we‘ve been trying to do really for about over three years now, since Secretary Powell agreed to the initiative that British then foreign secretary Jack Straw undertook, to try and find a negotiated solution to the problem posed by Iran‘s effort to acquire nuclear weapons.

So the course of this diplomacy, which Secretary Rice continued and, indeed, expanded, has been to work with the three European countries that have been engaged in the negotiations with Iran.  The United Kingdom ...

O‘DONNELL:  But, Ambassador, you have repeatedly tried the diplomatic route.  You have tried it in the U.N. Security Council.  You have issued warnings.  The IAEA is on your side.  They just put out a U.N. report that said that they had found bomb grade uranium.

I mean, there are more and more dire warnings and increased rhetoric from Iran.  And, yet, again, answer that question about consequences to Iran.  We see the president there feels emboldened by this.

What consequences does he face?

BOLTON:  Right.  I was answering it when you interrupted me.  But the discussions we‘ve been having with the three European countries, the United Kingdom, Germany and France, have allowed them to take the lead in trying to find a peaceful and diplomatic solution by offering Iran a very, very generous package that if Iran would give up its pursuit of nuclear weapons, they could have a different relationship with us and with western Europe.

Now, they have not done that and we are at the point where the five foreign ministers agreed, bringing in Russia and China, significantly, that we would go back to the Security Council and seek the consequences that President Bush spoke of earlier this week.

So I think in that sense, we really are, at the moment, that we‘ve predicted for some time that if Iran did not comply with our demand that they give up the search for nuclear weapons.

O‘DONNELL:  As you know, David Ignatius from “The Washington Post” is in Iran.  He has a piece in today‘s “Washington Post” today.  And he reports that, in fact, Iranians feel more emboldened by the dire situation in Iraq.

Do you acknowledge that the war in Iraq has made diplomacy with Iran more difficult?

BOLTON:  Well, I haven‘t seen that piece, so I don‘t really know what the thrust of the argument is.

But I think the question of dealing with Iran‘s nuclear program is really substantially different than the situation we faced in Iraq.  And I don‘t think that the security situation inside Iraq really affects our diplomacy vis-a-vis Iran.

I think...

O‘DONNELL:  But you do acknowledge that Iran, to some degree, recognizes what‘s going on in its neighborhood and feels emboldened by the situation in Iraq and some say emboldened certainly by the situation in Lebanon.

BOLTON:  I think what Iran is doing is causing a major part of the problem both in Iran and in Lebanon and in the occupied territories by its support for Hezbollah and Hamas.

I think that the rhetoric that President Ahmadinejad loves to use all contributes to the compelling need to prevent Iran from obtaining nuclear weapons, because with that kind of regime...

O‘DONNELL:  So let me...

BOLTON:  ... having nuclear weapons would be a very difficult threat in the region and worldwide.

O‘DONNELL:  There have been dire warnings from this administration that Iran, of course, is seeking to acquire and build nuclear weapons.  How would sanctions stop that effort?

BOLTON:  Sanctions, as I said earlier, are only a part of the effort.  I think there are, in addition, steps that we have taken, will continue to take through the Proliferation Security Initiative, which is intended to onterdict international trafficking in weapons and materials of mass destruction.  We‘re also now going after the financing aspect of weapons of mass destruction proliferation and going after the financial contacts that Iran has with the outside world.  All of which can have a dramatic impact on the country.

What we‘re seeking to do is find ways to prevent Iran from getting a completely indigenous nuclear capability.

O‘DONNELL:  As you know, Kofi Annan is in the region.  He is planning to meet with the Iranians tomorrow.  Do you have any confidence that Kofi Annan will be tough enough with the Iranians tomorrow?  What do you want him to say?

BOLTON:  I think what he should say is, Read Security Council Resolution 1696 again:  it made it clear that you are required to suspend your uranium enrichment activity and that if you don‘t, the Security Council will proceed to sanctions.

I don‘t think he‘s there to negotiate, but I think it certainly would be useful if he conveyed again the message that the Security Council sent in that resolution.

O‘DONNELL:  All right, we‘ll be back with Ambassador John Bolton.

And, coming up, on Wednesday on MSNBC, Decision 2006: Battleground America.  All day we‘re gearing up for the big midterm elections.  NBC‘s Tim Russert kicks off our coverage at 9:00 a.m. and NBC‘s Brian Williams, David Gregory, Campbell Brown, Lester Holt, Chris Matthews, Joe Scarborough and Tucker Carlson will all bring you the biggest races and the hottest political stories this fall.  It‘s all part of this huge day, Wednesday, only on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  Coming up, as Iran refuses to shut down its nuclear enrichment program, how far is the United States willing to go to stop them?  More with U.S. Ambassador to the U.N., John Bolton, when HARDBALL returns.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to HARDBALL.  We‘re back with John Bolton, U.S. Ambassador to the United Nations.

Ambassador, thank you again for joining us.

BOLTON:  Glad to be here.

O‘DONNELL:  What is the worst case scenario if Iran is able to continue its uranium enrichment?

BOLTON:  The worst case would be they would perfect the uranium enrichment technique.  They would then move to industrial scope of production to enrich uranium to weapons grade concentrations of the U-235 isotope, and then begin producing nuclear weapons.

What we‘d like to see is a reversal of that strategic decision by Iran, much the same way Libya came to the conclusion they were actually safer not pursuing nuclear weapons than doing so.

O‘DONNELL:  And why do you think Iran feels emboldened to continue to defy the United States and the international community?

BOLTON:  Well, I certainly can‘t read the minds of the people in control in Iran and I think that‘s one reason why we feel we need to take the step of going to sanctions and increased international isolation, since, to date, the diplomatic efforts have not succeeded in convincing them to change that strategic decision.

O‘DONNELL:  But you must have some kind of inkling or thought about why they feel so emboldened to continue to defy the United States.

BOLTON:  Well, they‘ve been pursuing nuclear weapons, by our lights, for close to 20 years.  So I don‘t think that reflects in any change in what they‘ve been doing.

They‘re just getting much closer to it now than they have been in those past years.  This is a longstanding policy they‘re pursuing.

O‘DONNELL:  Again, referring to David Ignatius of “The Washington Post,” he reports today that Ahmadinejad‘s defiant rhetoric, in that that there‘s a widely shared conviction in the Middle East that Iran is a rising power in the Middle East, while the United States is in decline and now is the moment for Iran to emerge as a regional superpower.

Is that one of our concerns?

BOLTON:  I don‘t think that that analysis is necessarily accurate. 

The support that Iran has been providing to Hezbollah in the range of a $100 million a year, the support it‘s provided to Hamas, the support it‘s provided to other terrorist groups, has also been part of a longstanding policy.

So I don‘t know that this reflects an overall change in Iran‘s behavior, but a continuation of policies they‘ve been pursuing for some time, policies which are very dangerous in the region and globally, no doubt about it.

O‘DONNELL:  We talked about the worst case scenario with Iran and, clearly, they want to become a regional superpower.  Does the U.S. have any good military options?

BOLTON:  Well, I think that the discussing what the options are is obviously not something that would be terribly productive.  I think any president charged with responsibility for protecting the American people is not going to take the military option off the table when you confront a threat as grave as an Iran, armed with nuclear weapons.

O‘DONNELL:  So you‘re saying, when the president, just like he did the other day before the Amercian Legion, warns of consequences for Iran, you‘re saying he‘s not referring to military consequences.

BOLTON:  Well, he‘s made it plain for some time that our prefered way of dealing with this problem is through peaceful and diplomatic means, and that‘s what we‘ve been doing for the past several years.

O‘DONNELL:  But you‘ve found those means thus far unsuccessful.  Is it now time to turn to another means of dealing with Iran?

BOLTON:  Yes, as I said before, now that the Iranians have made it clear they have no intention of suspending their uranium enrichment activity, I think moving for sanctions in the Security Council, considering other economic steps, ramping up the Proliferation Security Initiative, are all things we should and will be doing.

O‘DONNELL:  And quickly, since the U.N. General Assembly meets at the end of September, do you hope to have those sanctions by then?

BOLTON:  I never make predictions about the timing of action in the Security Council, but once we‘re given the instruction to proceed here in New York, we‘ll go as fast as we can.

O‘DONNELL:  And finally, I must just ask you, the Iranian president, Ahmadinejad, has challenged President Bush to a debate.  I don‘t imagine that‘s something you‘re considering, is it?

BOLTON:  That‘s another one of his silly ideas, and I wouldn‘t waste any time on it.

O‘DONNELL:  Understood.  Thank you, Ambassador John Bolton—thank you very much for your time.  We greatly appreciate it.

BOLTON:  Happy to do it.

O‘DONNELL:  And up next, will the Bush administration‘s strategy of calling Islamic terrorists ‘fascists‘ and calling Democrats ‘defeatists‘ help Republicans keep control of Congress, or will it backfire?

We‘ll be back with more on that.  You‘re watching HARDBALL, on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to HARDBALL.  With crucial midterm elections two months away, President Bush is going out with a new P.R. offensive, defending his strategy on the war on Iraq.  But is it smart to turn the public debate on the topic of Iraq, as opposed to turn it away from it? 

A.B. Stoddard writes for the “Hill” and HARDBALL political analyst Chuck Todd is editor in chief of The “National Journal‘s Hotline”.  Welcome to both of you.  We saw what the secretary of defense did this week, essentially accusing critics of being Nazi era appeasers.  We heard President Bush describe the war on terror as the decisive ideological battle of the 21st century.  This is a battle between good and evil.  He said Iraq is at the center or it.  Chuck, why this new push by the administration to really tie everything to Iraq? 

CHUCK TODD, EDITOR IN CHIEF, THE “HOTLINE”:  Well it‘s more of trying to blur Iraq.  I mean this is about making sure voters go into the voting booth in November thinking terrorism first, not Iraq.  If a voter is going into the voter booth thinking Iraq, they‘re voting Democrat.  If they are going in thinking terrorism, they‘re voting Republican.  They have to figure out, Iraq is a P.R. disaster right now, they have to figure out how to get it. 

O‘DONNELL:  And it‘s not like we should act like this is a big surprise.  I mean this is out of the old playbook.  I mean this is 2002, 2004, it worked.  There is some indication, however, or there‘s some discussion, will national security not be the trump card in 2006? 

A.B. STODDARD, THE “HILL”:  No, I think it will.  But, what I think is so interesting about the message this week on Iraq is that they are sort of embracing this defeatist message now.  They can no longer talk about progress.  It‘s really hard to muster the word victory, even though Bush was using it yesterday.  They‘re just saying we abandon Iraq at our peril.  We can‘t leave this war or else. 

So it‘s, to the American people who have heard this before, I think it‘s really dangerous because what they‘re saying is, we just can‘t leave.  It‘s not a plan, it‘s not a strategy.  It doesn‘t inspire hope or confidence.  The more that they drive down confidence in the voters, the more they are going to drive out incumbents.  And that‘s why I think it‘s a liability for them. 

O‘DONNELL:  The reason I‘m struck by this argument about whether national security will again be the trump card again for Republicans, as the “Wall Street Journal” has a very good piece about this, once again pointing out what has been our NBC NEWS/”Wall Street Journal” polling, and what‘s happened actually over the past several years is there has been significant erosion for Republicans on the very issue of national security and Iraq. 

For instance it was in October of 2002 Republicans had a 30-point advantage on Iraq.  Now Democrats have a three-point-point advantage.  Democrats have an nine-point advantage now on foreign policy.  Even when it comes to dealing with terrorism, Republicans have had significant erosion in how they are doing on all of that.  So could that signal, Chuck, that they may face a different environment this year, in terms of using national security as the message? 

TODD:  Well I think what they are running into, it‘s an educated electorate.  It‘s a more educated electorate this time.  They are separating out.  We are seeing more and more surveys where they ask the question is Iraq part of the war on terror and you are seeing a real divide.  It depends on the survey, but it‘s really right down the middle of a majority of the country sometimes thinks that Iraq is not part of the war on terror, depending on the poll.  And that‘s a big change. 

I mean it‘s a Democratic message that they tried to in 2002, that they tried to do 2004 in Iraq, which didn‘t work, this time might be penetrating.  And that‘s where they run into problems.  Just today another Republican member of Congress came out against Rumsfeld, was sort of expressing a no confidence vote on how Iraq fares. 

O‘DONNELL:  So now we have several moderate Republican candidates, who are in fact, while the White House and the administration is arguably going further to the right, getting tougher with their rhetoric, we see some candidates in really tough races, Republicans are saying, wow, I don‘t support Secretary Rumsfeld, like Ohio Republican Pat Tiberi did today.   

STODDARD:  I think for Democrats going after the no confidence vote on Rumsfeld is a good offensive move.  But what they really need to do is they need to make the case, since voters are making up their minds, many of them, that Iraq is separate from the global war on terror, the Democrats need to make a concerted push on this.  They need to separate these two issues and they need to campaign on that. 

They need to say the Bush policies have made us less able to neutralize the terrorist threat.  Bin Laden is alive, al Qaeda is well, Hezbollah is very well and the $8 billion we are spending a month is making Iraq less stable and us less safe.  They just refuse to do it.  It‘s sort of hanging out there, this window. 

O‘DONNELL:  Well now the strategy that I‘m hearing, on Monday the Democratic leadership from the House, led by Nancy Pelosi and Rahm Emanuel, are sending a letter to President Bush demanding that he fire Secretary Rumsfeld.  Should that be the message that the Democrats employ, fire Rumsfeld?  Or should they be employing and pointing forward a strategy of what to do? 

TODD:  Even the fire Rumsfeld gets people divided in the Democratic side because you talk to even some of these Democratic veterans that are running for Congress on the Democratic side and they sit there and say, you know, Rumsfeld is just taking orders from the commander-in-chief.  This is about, it‘s either about Bush or it‘s not about Bush.  Don‘t try to separate—

O‘DONNELL:  Does anybody think that Bush, if he were to get rid of Rumsfeld, that he would change his strategy in Iraq? 

TODD:  Right and, you know, the White House isn‘t stupid.  A confirmation hearing for Donald Rumsfeld is a political suicide mission.  It would just be a disaster.  I mean, it would be a P.R. disaster for them. 

O‘DONNELL:  For the Democrats? 

TODD:  For the Republicans.  No way they would actually do that. 

STODDARD:  I think it‘s good for Democrats to make Republicans defend Rumsfeld.  I don‘t think they can lose.  On balance, I don‘t think they lose.  But I am not someone who thinks the Democrats have to, at this stage, set an Iraq policy, specific timetable. 

TODD:  But what they haven‘t done is they have not set a policy of strength at all.  They have still sat there and said everything that has made us weaker, and they make that case very well these days, but they don‘t talk about, OK, this what we‘re going to do to make us stronger.

STODDARD:  They are not on the ground.  They are not executing this war.  It‘s not their war.  They are not supposed to give General Casey his marching orders.  I just don‘t see why Democrats have to do that. 

O‘DONNELL:  It‘s clear from all of the smart guys who follow all of these races, including you Chuck, who know every single one, that they think that Republicans are going to lose the House of Representatives and, as James Carville said, if we can‘t win in this year, we need to really reexamine who the Democratic Party is. 

We‘re going to have more with these experts, A.B. Stoddard and Chuck Todd.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(MARKET REPORT)

O‘DONNELL:  Welcome back to HARDBALL.  I‘m Norah O‘Donnell in tonight for Chris Matthews.  And we back with A.B. Stoddard of “The Hill” and Chuck Todd of “The Hotline.”  Thank you, again, to both of you for joining us. 

Hillary Clinton for president.  She was just up in Seneca Falls, New York, campaigning outside what is going to be the new National Women‘s Hall of Fame.  And she was asked if she thinks that there‘s going to be a new—if there‘s going to be a woman president someday.  And she said, quote, “It just depends on when and if that happens.  Stay tuned.”  One more tease by Senator Clinton.  But we all think she‘s running, right A.B.? 

STODDARD:  I think that they have done an incredible job of—you know, they are so calculating and so controlling and they‘ve done this great job of making it so quiet that it‘s going to have to burst into the open really, you know, right after the elections in November. 

Everyone else has been to Iowa.  She has got to get going.  I mean, she might have the lead in money and she might be the big elephant in the Democratic primary race, but I still think she has to be official pretty soon. 

TODD:  I think she can wait.  I think she can go—if you look at—

I think they‘re following very much the George W. Bush model from the ‘98 governor‘s race and going into—you know, he was one of the last to get in that nomination fight. 

In fact, there was a debate before he was even a candidate in, I think early ‘99.  He gets in in June of ‘99 and it becomes a big event and all this stuff.  I think that that‘s the timetable we‘ll see and we‘re going to have seven or eight more months of this before the election. 

STODDARD:  Really?  Oh.

TODD:  That it won‘t be until June—I know.  So, because what it will do is it will completely tie the hands—the financial hands of a Mark Warner and a John Edwards, all these people, and I think that that‘s what they would, you know, secretly like doing. 

O‘DONNELL:  She does face a Senate race with minimal opposition, so she‘s likely to win.  She‘s expected to raise as much as $60 million.  She won‘t have to spend all of that to get reelected, so she could have $30 million in the bank when her election is over, which would put her far ahead of any other Democrat, and she can use that money to run for president. 

TODD:  You know what‘s interesting?  She‘s already spent $25 million? 

O‘DONNELL:  Yes, that is.  On what? 

TODD:  Well ...

O‘DONNELL:  Has anybody done a piece on that?

TODD:  Well, they haven‘t done the big, big story.  But it‘s on infrastructure.  You talk to some people and they think that Terry McAuliffe, who is, obviously, going to be working for Hillary Clinton, is building basically a junior DNC, you know, their own version of the DNC, since they‘re not close. 

O‘DONNELL:  Because they don‘t trust Howard Dean. 

TODD:  They don‘t trust Howard Dean.  That‘s exactly right.  They don‘t trust Howard Dean.  They‘d rather build it themselves than control the entire committee. 

O‘DONNELL:  OK, we have to ask you about the comments of Senator Conrad Burns, the Republican from Montana, who also faces a very difficult race.  The Democrats want this seat even though it is in red state Montana.  But Conrad Burns has had a number of slip-ups that people who look at YouTube know and have seen there. 

He recently just—while Laura Bush was out campaigning for him, as a closed fundraiser, he said, the United States is up against a faceless enemy of terrorists who, quote, “drive taxicabs in the daytime and kill at night.”  We were—this is an insensitive comment to say the least, but as someone said to me, he‘s going to have trouble when he comes back to D.C.  to get a cab. 

STODDARD:  I hope he has trouble in Montana is all I can say.  He‘s vulnerable right now.  He‘s struggling to hold onto his seat and we might just find out that he didn‘t get in trouble in Montana for this. 

TODD:  No, I think you talk to Republicans and they‘ll tell you they‘re more—they assume Burns is toast, more so than even Rick Santorum these days, that Conrad Burns has now dug himself a hole he can‘t get out of and it more comments like this. 

O‘DONNELL:  So why send poor Laura Bush up there to campaign for him? 

TODD:  I think that was before he made this final taxicab comment. 

Because it‘s such a red state, it‘s one of those things, they‘re not that far behind.  The question is, can they actually get over it? 

O‘DONNELL:  In fact, on the front page of “USA Today” they talk about the Senate races, and that Democrats have a good shot but may not take back the Senate.  And they have some of the poll numbers.  We‘ll show them to you. 

In Pennsylvania, Republican Rick Santorum, he is trailing by 18 points.  You mentioned that.  In Ohio, DeWine is trailing by six points.  And in Montana, Burns trails tester by three percent.  But you say the Republicans have pretty much said we are probably going to lose Montana. 

TODD:  They almost feel like that‘s a harder—it‘s going to be harder to get that than in some ways even—with Pennsylvania, they think that Bob Casey Jr. might fall on his face.  In Montana, it‘s Conrad Burns falling on his face.

O‘DONNELL:  And remind me, because your publication, which is called “The Hotline” said which three seats essentially that the Republicans would have to hold on to in order to hold the Senate. 

TODD:  They‘re trying to build a firewall in Missouri, Ohio, and Tennessee.  They know if they win two of those three, Democrats can‘t win the Senate back and at this point, they‘re willing to sacrifice almost everything else.  But if they can hold two of the three, Democrats can‘t win the Senate. 

O‘DONNELL:  A.B., you wrote for “The Hill” Democrats, however, have done something this year, which they have made up the gap on fundraising and money. 

STODDARD:  I mean, look, the fact that they made up that gap is really

after campaign finance reform is really impressive.  And I think it was unexpected, a big surprise in both parties.  And the fact is, the political winds are at their back.  I mean, this is the year.  This is absolutely the year. 

Times have changed a lot since 1994.  There‘s a lot of advantages that Republican incumbents have that they didn‘t have 12 years ago in electronic media.  Their turnout operations has really impressed.  It was instrumental in 2004. 

And finally, there‘s a lot of factors that play in the sort of incumbent protection business.  But the Democrats have everything they could ask for at this point.  If the voters don‘t buy what they are selling it could be drastic.

O‘DONNELL:  The Democrats want to make this a national election, make this a referendum on President Bush.  The Republicans are trying to make this a choice election.  We‘ll see what happens.  Thank you to A.B.  Stoddard and Chuck Todd. 

Up next, President Bush calls anti-war Democrats defeatists.  Will that kind of rhetoric backfire or will it work?  HARDBALLers Ron Reagan and Terry Jeffrey tackle that one.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to HARDBALL.  With the 2006 election just weeks away, can Republicans manage to maintain power in Congress?  Will the Bush team‘s full frontal assault on war critics work or will it back fire.  Here to dig into these questions are tonight‘s HARDBALLers, MSNBC political analyst Ron Reagan and Terry Jeffrey of “Human Events.”  Thank you to both of you. 

RON REAGAN, MSNBC POLITICAL ANALYST:  Thanks, Norah. 

O‘DONNELL:  Terry, let me begin with you, a new Pentagon report out tonight, delivered to Congress, says sectarian violence is on the rise.  Iraq is on the brink of civil war and that they are facing the most complex security challenge since the U.S. invasion in 2003.  Given the facts the Pentagon is reporting, can they win the politics of this when this White House is putting everything on Iraq and national security? 

TERRY JEFFREY, EDITOR, “HUMAN EVENTS”:  Well look, there is no doubt, I think, that the biggest problem the Republicans face politically going into November is the Iraq war. 

O‘DONNELL:  So then why are they campaigning on it? 

JEFFREY:  I think they can help neutralize the problem by pointing out a couple of things.  Number one is the consequences that would ensue if the United States were to leave Iraq today and number two is that the Democrats really aren‘t offering a realistic alternative.  The fact of the matter is we went in to Iraq with bipartisan majorities of both houses of Congress.  A majority of the Democrats in the Senate voter for it. 

In fact, Senate majority leader, Senate minority leader Harry Reed, he wants to be majority leader, Chuck Schumer, who runs the Democratic Senatorial Campaign Committee, they both voted for the war.  But do they have a clear alternative to the policies we‘ve been following there that will get us the stability we need for to us get out?  I don‘t think they do.  So I think the degree the administration focuses on the fact that they don‘t have an alternative and what the consequences would be helps to neutralize the Democratic advantage. 

O‘DONNELL:  Ron Reagan, you heard some of the strong rhetoric coming from the administration this week.  Secretary Rumsfeld says that critics blame, have a blame America first mentality, that essentially they are equivalent to Nazi era appeasers and that the media is, in part, to blame.  Your reaction to his comments? 

REAGAN:  Well, you know, I‘ll tell you, Secretary Rumsfeld wrote an op-ed in the “L.A. Times” today and it was a catalog of misperceptions and misdirection.  He said, among other things, that the people who question the war on terror and the war in Iraq, they don‘t believe the defense of liberty is worth the cost.  He said that the people who don‘t believe in the war in Iraq are bent on appeasing the terrorists.  Who exactly is bent on appeasing terrorists?  I haven‘t heard anybody like that. 

This is just political rhetoric and it‘s not going to work.  The American public is leaving this boat in droves now and you see that in the polls.  But as Terry pointed out, it‘s really the only thing that the Bush administration, the Republicans, have right now.  So they are really off the boat on everything else. 

O‘DONNELL:  Well Ron, let me challenge you on that.  Ron let me challenge you on that, on the appeasing the terrorists.  Would not leaving Iraq and leaving the security challenge there, would not that hand a victory to the terrorists? 

REAGAN:  No actually about five to seven percent of the fighters in Iraq, by our own military‘s estimate, are actually foreign Jihadis.  The vast bulk of the violence is being created by sectarian militias, Sunni, Shia, a little bit of Kurds too.  That‘s what we are right in the middle of here.  That‘s what the public realizes.  They have disassociated Iraq from the war on terror and rightfully so. 

O‘DONNELL:  Terry, what about that, there is a perception that American troops are fighting al Qaeda in Iraq.  But what is going on now is sectarian violence, as the Pentagon points out in their report today. 

JEFFREY:  Well I think there‘s a number of things going on in Iraq.  In his best speeches the president explains that, well sometimes I think he doesn‘t, but I agree with Ron, the principle conflict in Iraq is between Iraqi insurgents, who don‘t want the Shia government to become stable and impacting the future of Iraq.  That is the principle struggle.  Most of the casualties the United States are taking are from the Sunni insurgents. 

At the same time, however, al Qaeda is present in Iraq, which was made clear when we killed Zarqawi and rounded up a good number al Qaeda in Iraq terrorists.  That is part of the struggle.  It is not the core of the struggle in Iraq itself.  And third we have the sectarian violence, which in a large part now is Shia on Sunni and the government we‘re supporting in Iraq is, in fact, a Shia dominated government. 

But all of those complex factors, Norah, point to the fact, which is the core of Rumsfeld‘s argument, if we get out of there now, what happens?  Is it good for our national security interests or is it bad for our national security interests?  The Democrats don‘t have any answer.  They want to get out for political expediency and they don‘t care what happens down the road. 

O‘DONNELL:  I‘m curious why the decision the political strategy is to make Secretary Rumsfeld the center of essentially the political fight, the lightning rod, if you will, by giving this very controversial speech earlier this week before the American Legion.  Of course Secretary Rumsfeld‘s folks tried to clarify those with the “L.A. Times” article today. 

Also, we have heard the very strong response from the Democratic party.  And just today we have got this, which is essentially Secretary Rumsfeld is now sending letters to Nancy Pelosi, who is the Democratic leader in the House, and the Democratic leader in the Senate Harry Reed, saying I‘m concerned about the comments you made to the media about what I said.  I‘m sending you the full text of my remarks because I assume your comments to the press were in reaction to inaccurate media reports.  So what‘s this?  We get blamed now, he says. 

REAGAN:  Well, he‘s always trying to blame the media and he blames the terrorists for manipulating the media and suggests that the media is, sort of, complicit in this manipulation.  At the same time, of course, the Pentagon is spending millions of dollars to manipulate the Iraqi media, at the same time.  It‘s not a media issue here.  It‘s reality versus fantasy issue here. 

O‘DONNELL:  Well and Terry, what about this, that now Rumsfeld wants to spend $20 million to monitor media reports about the Iraq war. 

JEFFREY:  Well, if it is for the purpose of advancing U.S. national interests in Iraq, I think it‘s a good idea, but let me get back to this point that Rumsfeld made.  I read Secretary Rumsfeld‘s op-ed piece in the “L.A. Times.”  At the end of it he said I hope that people would read my full speech at the Defense Department website.  So I went to the Defense Department website, like anybody watching this show can, and I read Rumsfeld‘s full speech.  In fact the speech really isn‘t so much an indictment of Democrats.  He doesn‘t talk about Democrats.  It is an indictment of the press.  And I think he makes a heck of a point that people can check for themselves, Norah.  He points out that one of the malefactors at Abu Ghraib has had 10 times as many references in the national media as Paul Smith, who posthumously won the Medal of Honor for his courageous actions...

(CROSSTALK)

JEFFREY:  I think there definitely is a reality of the fact... 

O‘DONNELL:  Terry?

JEFFREY:  ... the liberal media in this country pushes negative stories on Iraq because they think it advances...

(CROSSTALK)

O‘DONNELL:  Terry, what would this country have done had not the media exposed what was going on in Hurricane Katrina?

JEFFREY:               Look, I have no problem with the adversarial press.  I am a member of an adversarial press.... 

O‘DONNELL:  What many people forget is that the White House also uses the press to their own—to their own...

JEFFREY:  “The New York Times” beat the Abu Ghraib prison story to death because they thought it advanced the liberal agenda.  They thought it hurt President Bush.  And in the meanwhile...

REAGAN:  Terry, they exposed Abu Ghraib because it was a terribly important story. 

(CROSSTALK)

REAGAN:  American soldiers are torturing prisoners of war.  That is an important story. 

O‘DONNELL:  Terry, and I must point out for accuracy‘s sake, that it was a man who serves honorably in our military that actually brought that information about Abu Ghraib to his superiors and to the press. 

Ron Reagan and Terry Jeffrey are staying with us.  We‘re not done.  Up next, predictions for the midterms.  Will the Democrats win control of Congress?  This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  And we are back with Ron Reagan and Terry Jeffrey.  Let‘s also now take a look at a monologue about the secretary of defense from our own Keith Olbermann.  It‘s getting a lot of attention on the Internet. 

(BEGIN VIDEO CLIP)

KEITH OLBERMANN, MSNBC ANCHOR:  Dissent and disagreement with government is the life‘s blood of human freedom, and not merely because it is the first roadblock against the kind of tyranny that men Mr. Rumsfeld likes to think of his troops still fight this very evening in Iraq.

It is also essential, because just every once in a while it is right, and the power to which it speaks is wrong. 

This is a democracy, still.  Sometimes just barely.  And as such, all voices count, not just his.  Had he or his president perhaps proven any of their prior claims of omniscience about Osama bin Laden‘s plans five years ago, about Saddam Hussein‘s weapons four years ago, about Hurricane Katrina‘s impact one year ago, we all might be able to swallow hard and accept their omniscience as a bearable, even useful recipe of fact plus ego.  But to date, this government has proved little besides its own arrogance and its own hubris. 

Mr. Rumsfeld is also personally confused, morally or intellectually, about his own standing in this matter.  From Iraq to Katrina to flu vaccine shortages to the entire fog of fear which continues to envelop our nation, he, Mr. Bush, Mr. Cheney and their cronies have, inadvertently or intentionally, profited and benefited, both personally and politically. 

And yet he can stand up in public and question of morality and the intellect of those of us who dare ask just for the receipt for the emperor‘s new clothes. 

In what country was Mr. Rumsfeld raised?  As a child, of whose heroism did he read?  On what side of the battle for freedom did he dream one day to fight?  With what country has he confused the United States of America? 

And about Mr. Rumsfeld‘s other main assertion, that this country faces a new type of fascism—as he was correct to remind us how a government that knew everything could get everything wrong, so too was he right when he said that, though probably not in the way he thought he meant it.  This country faces a new type of fascism, indeed. 

(END VIDEO CLIP)

O‘DONNELL:  And that was Keith Olbermann the other night.  Terry, your response? 

JEFFREY:  Look, the establishment press in this country, and by that I mean NBC, of which this network is a part, CBS, ABC, “The New York Times,” “The Washington Post,” they have more power than Donald Rumsfeld.  Donald Rumsfeld may end up being secretary of defense for eight years.  He has to answer to the president of the United States who can fire him at any moment.  He has to answer to the United States Congress.  By the way, Norah, if they wanted to, they could impeach him.  Democrats are talking about calling for him to resign.  They could impeach him if they had him for an impeachable offense.  Donald Rumsfeld could be gone from the scene a couple of years from now. 

This Keith Olbermann seems to have eternal life on MSNBC.  The fact of the matter is, the liberal press is arrogant.  They try to drive the opinion in this country, and Donald Rumsfeld is absolutely right.  They play up negative news in Iraq and they play down positive news, because they think it advances their agenda, and that‘s why there is a tremendously powerful now alternative conservative media in this country, including Fox News, including Rush Limbaugh, including Sean Hannity, including talk radio all around this country, because they are sick and tired of the liberal press. 

(CROSSTALK)

O‘DONNELL:  ... however, is it appropriate for the secretary of defense, who is the civilian leader of a nonpartisan military, who controls billions of dollars, the lives of men and women, to be engaged in a political argument? 

JEFFREY:  It‘s not a political argument.  He is defending his troops, their morale and their cause.  And specifically, I‘ll say again...

O‘DONNELL:  Let me get Ron in here.  I apologize, Ron, go ahead.

JEFFREY:  Yes, sure. 

REAGAN:  Well, you know, Terry is talking about the mainstream media.  Most of the mainstream media championed this war, along with Donald Rumsfeld and George W. Bush.  I would remind Terry too that Fox‘s ratings right now are plummeting, because a lot of people in America are sick of the sort of jingoism they get when they tune into Fox. 

So, no, should Secretary Rumsfeld be engaging in a political argument?  No, he should have better things to do, but apparently he doesn‘t.  Keith Olbermann is exactly right.  Why should we trust these people when they have been wrong down the line on just about everything you can think of?  And now they are saying trust us, and if you don‘t, you are an appeaser of terrorists?  I‘m sorry, that‘s just garbage. 

JEFFREY:  Let me ask you something.  When we talk about specific policies dealing with terrorism, for example the policy of whether the National Security Agency ought to intercept communications of al Qaeda in the United States, if you say the United States should not do that, is that appeasing terrorism or not?

O‘DONNELL:  I‘ve got to go.  This is why we live in a democracy.  This is the greatest country on earth, and it‘s going to be decided by voters in November.  Thank you, Ron Reagan and Terry Jeffrey.

REAGAN:  All right, Norah, thanks.

JEFFREY:  And not by the liberal press.

REAGAN:  Please tune in Tuesday at 5:00 and 7:00 Eastern for more

HARDBALL.

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

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