updated 11/1/2006 1:29:46 PM ET 2006-11-01T18:29:46

Guests: Dick Armey, Rick Davis, Steve McMahon, Matthew Dowd

CHRIS MATTHEWS, MSNBC HOST:  Got you, bought you, fighting for revival or survival, the Bush team jumps on something John Kerry said, but in a desperate bid did they botch their last chance?  Let‘s play HARDBALL. 

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

Today, with the violence getting worse in Iraq and the election just a week away, Republicans found their weapon of mass distraction.  In a choreograph of press releases, Republicans collaborated in a chorus of attack on former Democratic presidential candidate John Kerry for something he said last night.  In a string of attacks on President Bush last night, Kerry ridiculed Bush‘s lack of education on the Middle East which Kerry said got us stuck in Iraq. 

(END VIDEO CLIP)

SEN. JOHN KERRY (D), MASSACHUSETTS:  Education, if you make the most of it and you study hard, and you do your homework and you make an effort to be smart, you can do well.  If you don‘t, you get stuck in Iraq. 

(END VIDEO CLIP)

MATTHEWS:  Republicans from Rush Limbaugh to Tony Snow to John McCain to Denny Hastert have said Kerry was really maligning the troops, implying that American servicepeople only join up because they are educational failures.  This violent interpretation of Kerry‘s words let the senator to issue this blistering counterattack today. 

(BEGIN VIDEO CLIP)

KERRY:  John McCain ought to ask for an apology from Dick Cheney for misleading America.  He ought to ask for an apology from the president for lying about the nuclear program in Africa.  He ought to ask for an apology for, once again, a week ago referring to al Qaeda as being the central problem in Iraq when al Qaeda is not the central problem.  Enough is enough. 

I‘m not going to stand for these people trying to shift the topic and make it politics.  America deserves a real discussion about real policy, and that‘s what this election is going to be about next Tuesday. 

(END VIDEO CLIP)

MATTHEWS:  Just to clarify what happened in context, yesterday at Pasadena College, John Kerry, the senator for Massachusetts and the former Democratic candidate for president, was talking about President Bush.  He made a couple of shots.  Let me read you from the Associated Press at the time. 

Kerry opened his speech at Pasadena City College with several one liners, saying at one point that Bush had lived in Texas, but now, quote, “lives in a state of denial.” 

He then said, ‘you know, education if you make the most of it, you study hard, you do your homework, and you make an effort to be smart and you can do well.  If you don‘t, you get stuck in Iraq.”  He has talking about the president, not about the people fighting our war in Iraq.

NBC‘s Michelle Kosinski is with the president in Georgia—Michelle.

MICHELLE KOSINSKI, NBC NEWS:  Hi, Chris.

The president just entered the arena here in Perry, Georgia.  You can see him on the podium.  He is shaking hands.  He is with the Republican challenger, Mac Collins.  We did get an advanced copy of the president‘s speech, and he is expected, once again, to ask Kerry to apologize for those statements he made, even though, of course, Kerry is portraying that as a botched joke. 

In his proposed speech, which he is about to start as soon as the challenger gets through here, he is expected to say that the troops are not poorly educated.  It‘s not a lack of intelligence.  In fact, in his speech he calls them plenty smart and that they‘re volunteers and patriots. 

Of course, this has been an opportunity for Republicans in the days leading up to the election, maybe nowhere better than a district like this one, the eighth congressional district in Georgia.  This is one of two seats in the state.  Analysts say it is the only state with two seats that are vulnerable currently held by Democrats. 

Granted, these are some of the most conservative Democrats in the House, and Republicans, in their ads leading up this election, have been not so much attacking their opponents, but the challengers have been saying that, you know, these are the proposed ills, the problems that would happen if Democrats did gain control of the House. 

So the president is expected not only to gauge, again, the reaction to what Kerry said, but also issues that Republicans have with Democrats in general on the war on terror and all of those other hot issues right now—

Chris. 

MATTHEWS:  OK, thank you, Michelle.  I guess we‘re going to wait for the president to take the lectern.  He‘s being introduced now.  It‘ll come any second.  I don‘t want to take any of his time away.  Let‘s watch the introduction. 

UNIDENTIFIED MALE:  We want more.  We want a larger role in the global war against terrorism. 

(APPLAUSE)

UNIDENTIFIED MALE:  And as a member of the Armed Service Committee in the next Congress, I‘ll work Saxby Chambliss and Johnny Isakson to see that it continues to be the best of the best.  Mr. President, we love you here.  You are in the land of patriotism. 

MATTHEWS:  Well, this s a good crowd for the president, we can see that.  It‘s a good opportunity to score his licks against John Kerry.  I‘ve got joining me right now former Republican leader of the House Dick Armey. 

Mr. Armey, what do you make of this—well, it‘s a rhubarb I guess in politics terms.  What is it?  Is this a real catch him, we got him, or is it they‘re making it look like they‘ve got Kerry saying something?

DICK ARMEY ®, FMR. HOUSE MAJORITY LEADER:  Well, it‘s pretty standard fare in political discourse.  You misconstrue what somebody said.  You isolate a statement, you lend your interpretation to it and then feign moral outrage.  And Democrats have been doing it for years. 

MATTHEWS:  So it‘s a bicoastal, bipartisan opportunity.

ARMEY:  And I would say to John Kerry, look, you live by the P.C., you die by the P.C.  I mean, the P.C. was a Democrat creation, so share and share alike.

MATTHEWS:  What do you mean the P.C.? 

ARMEY:  Political correctness, you know, feigning moral outrage for what might be perceived to have been a possible slight, given my interpretation of what was said. 

MATTHEWS:  And so the president—well, according to the prepared statement we have gotten a copy of, will jump on Kerry defending the troops when, in fact, Kerry may well have meant—according to reading the script of what he said and the account of it, he was trashing the very man who is now defending the troops.  He was trashing Bush himself and Bush says don‘t say those terrible things about my troops!

ARMEY:  Right.

MATTHEWS:  So this is a bit of theater orchestrated well by the White House.  They have got the American Legion commander out there making a statement.  They got him to do it.  I‘m sure—I assume that most of these people didn‘t read the whole statement of Kerry yesterday, but they are happy to jump on the quote they got.   

ARMEY:  A fundamental premise of politics is we can make this work if people just never figure it out.

MATTHEWS:  Well, Kerry is out there once again today.  We‘ll have more of his quotes today later in the program, Kerry out there trying to prove that he learned something from the Swift Boats, attack, counter attack.  Don‘t let it go, and today he‘s out there.  We‘re going to have that in quotes, but I want to be very deferential to the president. 

I don‘t know how long this Georgia introduction is going to go, but this fellow—we‘re going to watch and make sure we pick up with the president as soon as he comes on. 

Let me ask you about this war in Iraq.  Is it the big fish in this election? 

ARMEY:  You know, I‘m trying to figure that out.  I think it is to some great degree, but I‘m not quite sure how it cuts.  And I think this debate that we are seeing tonight, this wall that we are seeing played out is the bet being made on both sides of the aisle on that. 

MATTHEWS:  You think they‘re doubling up their bet, the president and his party?  They‘re saying, look, we‘re going to fight for this war right through the election? 

ARMEY:  Absolutely.  I think the president is saying the American people think this is about their safety and their security.  We are standing firm on their behalf.  We are reliable, and the Democrats are not.  And he is trying to seize this moment to say not only is John Kerry not reliable here, but he‘s not even respectful for the people that are defending your safety.   

MATTHEWS:  How long can you fight a war, look at American history—you‘re an academic.  How many years can you ask America to be in a prosecutive war without a clear result in sight? 

ARMEY:  I don‘t, obviously—Vietnam tells us there‘s a point at which that‘s too long. 

MATTHEWS:  Korea too.

ARMEY:  Korea as well, so the model, of course, that we are all proud of is World War II where we went in, we were decisive, we came to the conclusion that freedom prevailed, and we were heroes. 

MATTHEWS:  Do you know how long the war lasted?  From December of ‘41 for us through August of ‘45.  You know, we are up about to approach that mark in this war, which seems so smaller? 

ARMEY:  Yes, and at ‘45 it was over, and this is a war with no end in sight. 

MATTHEWS:  Let‘s take a look.  Here‘s the president of the United States about to take the helm here. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  Thank you all very much. 

(APPLAUSE)

BUSH:  Thank you all very much.  Thanks for coming.  Thanks for the warm welcome.  It‘s great to be back in the state of Georgia. 

(APPLAUSE)

BUSH:  It just seems like I was just here yesterday.  I must have Georgia on my mind. 

(APPLAUSE)

BUSH:  I got something else on my mind, and that is to make sure Mac Collins becomes the next United States Congressman from this district.  I appreciate you coming.  He is a self-made guy.  He is a no nonsense fellow.  He has got a lot of common sense, just the kind of person you want representing you in Washington D.C. 

(APPLAUSE)

You know, he kind of reminds me of a lot of folks in my home state.  See, he didn‘t start off as a Republican.  He was the Butts County commissioner and he ran as a Democrat, a Reagan Democrat.  And then he saw the direction of where the Washington, D.C., Democrats were taking his party, so he came home.  He came home to a party...

(APPLAUSE)

He feels like I feel:  We don‘t want Washington Democrats running the House of Representatives.

(APPLAUSE)

BUSH:  I appreciate you coming to express your support for Mac.  I‘m honored you‘re here.  With your hard work, Mac Collins will be elected and we‘re going to keep control of the House and the Senate.

(APPLAUSE)

I‘m proud to be here with Julie.  That‘s Mac‘s wife.  She, like my wife, is a very patient person.  Mac married above himself; so did I.

Laura sends her love and...

(APPLAUSE)

... she sends her love to the Collinses, but she also sends her love to your governor.  You talk about a man who deserves to be re-elected, and that‘s Sonny Perdue.

(APPLAUSE)

He‘s done in office exactly what he‘s said he going to do. 

(APPLAUSE)

And the state of Georgia is better for it.

(APPLAUSE)

I‘m proud to be here with two United States senators who are making a huge difference in the nation‘s capital, folks who represent your state with a lot of class and a lot of dignity, Senator Saxby Chambliss and Senator Johnny Isakson.

(APPLAUSE)

It‘s a good sign when you‘ve got sitting members of the United States Congress come in to help one of their former colleagues.  It means they know him; they respect him; they like him.  So please join me and welcome Charlie Norwood, Phil Gingrey, and Tom Price.

(APPLAUSE)

I‘m proud to be here with the next lieutenant governor of the state of Georgia, Senator Casey Cagle. 

(APPLAUSE)

I thank all of the other candidates.  I thank all the grassroots activists.  You‘re the people who put up the signs, make the phone calls, convince people to go to the polls.  I want to thank you in advance for what you‘re going to do.

(APPLAUSE)

We‘re driving toward victory.

Now, I know up in Washington they‘ve already decided the outcome of the election, you know.

(BOOING)

They‘re measuring the drapes in their new offices.

Same thing happened in 2004, you might remember.

(APPLAUSE)

In 2004, the movers never showed up.

(LAUGHTER)

BUSH:  And they‘re not going to show up in 2006. 

(APPLAUSE)

One reason we‘re going to win this election is because we‘ve accomplished a lot. 

AUDIENCE MEMBER:  Amen!

BUSH:  We‘ve done what the people expect us to do.  We went up and represented the people‘s interests. 

You know, for decades, the public school system failed too many children, so we passed the No Child Left Behind Act and demanded schools show results in return for money.

Test scores are rising, an achievement gap is closing, and we‘re bringing America closer to the day when every single child gets a quality education. 

(APPLAUSE)

MATTHEWS:  You know, I think we‘re going to just wait until the president gets to the main point we know he‘s going to get to for the purposes of reaching of reaching the evening news tonight.

Let me ask you, Mr. Armey, you‘re an economist.  You‘ve taught economics.  Is economics going to be a big part of this election?  Health care costs, gasoline costs, social security, the usual issues, the usual issues that matter to people at their kitchen table. 

ARMEY:  You know, it‘s a big point to voters, but the point I‘ve been making for some time is neither party is really addressing these issues very effectively.  The Republican party, not at all, as they should be doing, where they can take the leadership.  And the Democratic party I don‘t see much, either, on these issues.  They all want to talk about the war, I mean, one way or the other. 

But the fact is that I‘ve been arguing the pocketbook voter, in the final analysis, will decide the outcome.  But the pocketbook voter today has a bit of a dilemma.  He‘s not sure that either party has a strong position on my issues, and doesn‘t really know which way to jump. 

MATTHEWS:  You know, I looked at a poll that we got today that showed

that a majority of voters use gasoline prices as a factor—a big factor -

an important factor in how they vote.  In other words, so many people commute in this country by car long enough distances to really cut into their income, their real income, that they would change their vote based on gas prices.  And here they are, gas prices dropping right before the election.  Are you a conspiratualist (ph)?  Do you think there‘s a deal here?  How does it work this way, so neatly for the Republicans? 

ARMEY:  Again, I have argued that gas prices are a reflection of a market that, you know, it goes up and goes down.  Housing markets, you know, the bottom‘s dropped out of the housing market.  Certainly nobody would...

MATTHEWS:  Are we heading into a recession right now? 

ARMEY:  No, I don‘t think so.  I think the fundamentals of the economy are finally in the electronic economy and they are strong are we have reason for great optimism.  The innovation, the creativity, the expansion of new product line, as it were, is still there.  There‘s still many exciting things for us to see. 

MATTHEWS:  Do you believe the president has failed to get credit for the stimulated economy?  The high market, the 12,000 Dow, et cetera, et cetera.

ARMEY:  Yes.  Of course, I mean, I‘ve watched politics for years.  Republicans rarely get credit for the good things that happen in the economy during their watch.  Democrats always get more credit than they deserve.  They are just better at political discourse that we are. 

MATTHEWS:  Well, why?  Republicans are bragging?  Ronald Reagan was pretty good at it.

ARMEY:  Ronald Reagan was the exception.  We all love Ronald Reagan. 

MATTHEWS:  But he got credit for everything he did.  He had “Morning in America”, he had everything. 

ARMEY:  Yes.  He was—Ronald Reagan was a great role model for our party, and I think for most people.  But he was a fellow that the American public just intuitively loved so much, that he could always get credit. 

MATTHEWS:  Why do you think this president‘s job approval number has gone down consistently since 2001?  It‘s gone down every year.  If you put it on one of those—remember those Cartesian planes, that‘s his approval rating.

ARMEY:  Well, I think, for example, the war is dragging his approval rating down.  The fact of the matter is we‘ve had a lot of bad things happen on his watch.  Who—I mean what president do you know could have handled Katrina better?  That had—to what extent were the screw-ups in Katrina local rather than national?  And, but it falls on the president‘s head.  So he hit a string of bad luck in events that have sort of blown up on his watch, and he hasn‘t made a big shining breakthrough on the domestic policy front. 

MATTHEWS:  Did your numbers as a Congressman, all the years you were reelected in Texas, did they move up and down depending on what people thought of the current president?

ARMEY:  No.  My numbers were rather interesting.  I was always at about 70/30.  About 70 percent of the people of my district appreciated me, and about 30 percent had quite another view of me. 

MATTHEWS:  And it had nothing to do with the president at that time? 

ARMEY:  No, I never saw a change. 

MATTHEWS:  You never saw a change?

ARMEY:  No, not all that time.  Obviously, my first election, when I took the seat away from an incumbent Democrat, was one thing.  But after that, it quickly went to 70/30 and stayed there through all the years. 

MATTHEWS:  Let‘s go back and watch the president.  I think he‘s getting to close to where we think he‘s going to talk about this John Kerry comment yesterday and really hit him hard. 

BUSH:  The Democrats believe they need more of your money to spend because they can spend it better than you can.  But you know, sometimes philosophers don‘t act.  We act.  See, we say we‘re going to do something, and we do it.  And we cut the taxes on everybody who pays income taxes.  We doubled the child-tax credit.  We reduced the marriage penalty.  We cut taxes on small businesses.  We cut taxes on capital gains and dividends.  And for the sake of our family businesses, and farmers, we put the death tax on the road to extinction. 

You might remember the debates.  I certainly remember them.  Democrats in Washington predicted that tax cuts would not create jobs, would not increase wages, and would cause the federal deficit to explode.  Well, the facts are in.  The tax cuts have led to a strong economy that‘s added 6.6 million new jobs since August of 2003.  Real wages are on the rise, and deficit has been cut in half three years ahead of schedule.

(APPLAUSE)

BUSH:  Tax cuts work and Mac Collins understands that.  You know, and the Democrats don‘t.

I want the folks out there who are trying to make up their mind about this election to understand that the Democrats don‘t want you to know what their tax plans are.  They just don‘t want you to know.

Recently, the top Democrat leader in the House made this observation.  She said, “We love tax cuts.”  Given her record, she must be a secret admirer.

(APPLAUSE)

She and her party voted against reducing the marriage penalty,

voted against cutting taxes on small businesses, voted against lowering taxes for families with children, voted against every single tax cut. 

If this is her definition of love, I‘d hate to see her definition of hate.

(APPLAUSE)

It‘s important for you to understand when you‘re out there hustling for the vote that if these tax cuts are not made permanent or not extended, your taxes are going up. 

BUSH:  See, that‘s what happens.  If they don‘t extend the tax cuts or pass a law that says they‘ll be a permanent part of the law, you can count on your taxes going up. 

I think it is interesting to note that the person who wants to be the head of the Ways and Means Committee for the Democrats said that he can‘t think of one tax cut that he would extend. 

See, that‘s code word for:  Get ready; if the Democrats take the House, your taxes are going up. 

(BOOING)

BUSH:  And it‘s a fundamental issue in this campaign.  They may try to hide their intentions, but that‘s what‘s going to happen. 

I want you to think about it.  If the tax cuts aren‘t made permanent or not extended and you‘ve got a child, your taxes will go up $500 a child.  The tax credit is now $1,000 per child, thanks to people like Mac Collins.

(APPLAUSE)

The man who wants to be the head of the Tax Committee said they‘re not going to extend those tax cuts, which means tax credit goes from $1,000 a child to $500 a child. 

So when you get to dinner tonight and you‘re siting around the table with your children, you can just count heads...

(LAUGHTER)

... and multiply that by $500.  So if you‘re a family with four children, that four times $500 is $2,000.  That‘s a $2,000 tax increase.

That may not sound like a lot to Washington Democrats, but it sounds like a lot to me and Mac Collins.  And we‘re going to keep your taxes low. 

(APPLAUSE)

This election is taking place in an historic time.  When our children and grandchildren look back on this period, one question will overwhelm all the rest:  Did we do everything in our power to fight and to win the war on terror?  That‘s the fundamental question this generation faces. 

We face an enemy that is brutal.  There is no negotiation with these people.  You can‘t try to talk reason into these totalitarians. 

BUSH:  They have an ideology.  Make no mistake about it—they believe things.  What they really believe is, they believe freedom is bad.  They can‘t stand the thought of free societies.  That‘s why they hate what the United States of America stands for:  the ability for people to worship freely, the ability for people to vote and to express their opinion freely is something we hold dear. 

It‘s the exact opposite of what these ideologues believe in and what they‘re trying to impose on other parts of the world. 

The best way to protect the American people is to bring the enemies to justice before they hurt us again. 

(APPLAUSE)

The best way to protect you is to make sure our professionals have all the tools necessary to do their job.  When it comes time to protecting the homeland, the United States of America must be right 100 percent of the time.  And the enemy, which desires to strike us again, only has to be right once. 

That‘s why I decided to work with the Congress and our professionals to change some things.  I decided it didn‘t make any sense to have a wall between our intelligence and law enforcement folks.  It may be hard for you to believe, but right around September the 11th, 2001, the folks in charge of protecting you couldn‘t share intelligence. 

And so, I asked Congress to pass the Patriot Act to tear down that wall.

(APPLAUSE)

That enabled people to share information. 

This is a different kind of war.  I know there‘s probably some World War II vets out there.  In those wars, you could measure progress by how many airplanes you were able to shoot down.  Or you were able to measure progress by how much land mass you took.

This is a different kind of war.  This is a war that requires good information in order for this government to do its most important job, which is to protect you.

And so therefore, I felt it was important if Al Qaida or an Al Qaida affiliate was making a phone call into the United States, we better understand what they‘re calling about.

(APPLAUSE)

In this different kind of war, we pick up people off the battlefield.

BUSH:  We capture people like Khalid Sheikh Mohammed, who our intelligence officers believe was the mastermind of the September 11 attacks. 

I felt it was important for the Central Intelligence Agency to be in a position to question this person to determine if he knew information that would be necessary to protect you. 

(APPLAUSE)

Now, when you‘re out rounding up the vote and people say, “Well, there‘s no difference between them,” or they‘re saying, “Well, maybe I feel comfortable with the Washington Democrats,” I want you to remind them about these three votes we just recently had. 

There‘s a clear pattern.  When it came time to renew the Patriot Act, more than 75 percent of the Democrat members in the House of Representatives voted no.

When it came time to vote on whether to allow the CIA to continue its program to detain and question captured terrorists, almost 80 percent of the House Democrats voted against it. 

(BOOING)

BUSH:  And when it came time to vote on whether the National Security Agency should continue to monitor terrorist communications, almost 90 percent of the House Democrats voted against it. 

(BOOING)

BUSH:  On all these vital measures, measures necessary to protect you, the Democrats in Washington follow a simple philosophy:  Just say no.

When it comes to listening in on the terrorists, what‘s the Democrats‘ answer?  Just say no.  When it comes to detaining terrorists, what‘s the Democrats‘ answer? 

AUDIENCE:  Just say no!

BUSH:  When it comes to questioning terrorists, what‘s the Democrats‘ answer?

AUDIENCE:  Just say no!

BUSH:  When it comes to trying the terrorists, what‘s the Democrats‘ answer? 

AUDIENCE:  Just say no!

BUSH:  So when the Democrats ask for your vote on November 7, what‘s your answer? 

AUDIENCE:  Just say no!

(APPLAUSE)

BUSH:  One thing is, the people in this district don‘t have to worry about Mac Collins giving the professionals the tools necessary to protect you. 

Those tools are necessary, no question about it.  But the best way to protect you is to stay on the offense.  It‘s to keep the pressure on the enemy. 

BUSH:  It‘s hard to plan and plot attacks against America if you‘re on the run, and that‘s exactly what our brave professionals are doing. 

(APPLAUSE)

It‘s important that the United States not forget the lessons of September the 11th, 2001.  I assure you, I‘m not going to forget them.

And one of the important lessons is that when we see a threat overseas, we got to take that threat seriously.  When you see a threat, you  just can‘t hope for the best in this day and age, where terrorists are capable of inflicting damage on the homeland. 

I saw a threat in Saddam Hussein.  Members of the United States Congress from both political parties saw that same threat.  The United Nation‘s saw the threat.  I made the right decision in getting Saddam Hussein out of power.

(APPLAUSE)

In this global war against extremists who use murder as a weapon, Iraq is now the central front.  Oh, I‘ve heard all the voices in Washington, D.C.  A lot of them say it‘s just a distraction in the war on terror, that it‘s not a part of the war on terror, people in Washington, Democrats say. 

Well, all I ask, if you‘re undecided about this important issue, is just listen to the words of Osama bin Laden, or Mr. Zawahiri, the number two of Al Qaida.  Osama bin Laden calls this fight the third world war.  He has said that victory for the terrorists in Iraq will mean America‘s defeat and disgrace forever.  It‘s important to listen to the words of the enemy if you‘re in war. 

Now I want you to listen to the words of a senior Democrat in the House of Representatives.  The reason I bring this up is I want you to understand there is a different mindset in Washington.  She said, “The president says that fighting them there in Iraq means it‘s less likely we will have to fight them here.” 

I did say that, and I strongly believe it.

“The opposite is true,” she went on to say, “Because we are fighting them there, it may become more likely we will have to fight them here.”

I want to remind that person that Iraq is not the reason that the terrorists are at war against us.  We were not in Iraq when the terrorists bombed the World Trade Center in 1993.

(APPLAUSE)

BUSH:  We weren‘t in Iraq when they blew up the USS Cole or the embassies in Kenya and Tanzania, and we were not in Iraq on September the 11th, 2001, when they killed nearly 3,000 citizens on U.S. soil.

(APPLAUSE)

You do not create terrorists by fighting the terrorists.  The best way to protect you is to find the terrorists where they exist and bring them to justice so they can‘t hurt you again. 

(APPLAUSE)

Our goal in Iraq is victory.  Our goal is for a young democracy to be able to sustain itself, govern itself, and defend itself and serve as an ally in the war on terror.

And the fighting‘s tough.  No question about it, it‘s tough.  It‘s tough because we face a brutal enemy without conscience.  It‘s tough because the enemy kills innocent men, women and children.  It is tough because they film the atrocities and they broadcast them for the world to see. 

You see, they believe that the United States does not have the will necessary to complete the mission.  That‘s what they believe. 

They don‘t understand this country.  We will never run in the face of thugs and assassins.

(APPLAUSE)

We will defend ourselves.

(APPLAUSE)

Our goals haven‘t changed, but our tactics constantly adjust.  Our commanders on the ground have what it takes to succeed.  And if they don‘t, I‘ll make sure they do. 

The enemy changes, we change. 

We got a lot of good things going for us in Iraq, starting with one of the finest United States militaries ever. 

(APPLAUSE)

In the midst of a heated campaign season, there are some things

we should all be able to agree on.  And one of the most important is that every one of our troops deserves our respect and our gratitude. 

(APPLAUSE)

Yesterday, my opponent in 2004 presidential race, Senator Kerry, was speaking to a group of young people in California. 

(BOOING)

BUSH:  I want you to listen to what he said.  He said, you know, “Education:  If you make the most of it, you study hard, you do your homework, and you make an effort to be smart, you can do well; if you don‘t, you get stuck in Iraq.”

(BOOING)

BUSH:  The senator‘s suggestion that the men and women of our military are somehow uneducated is insulting and it is shameful.

(APPLAUSE)

The members of the United States military are plenty smart.  And they are plenty brave.  And the senator from Massachusetts owes them an apology.

(APPLAUSE)

Whatever party you‘re in in America, our troops deserve the full support of our government.

(APPLAUSE)

And I don‘t have any doubts that Mac Collins will stand strong for the men and women who wear the uniform of the United States.

(APPLAUSE)

Something else is going for us when it comes victory in Iraq, and that is the Iraqi citizens.  They‘ve endured unspeakable violence, but they are determined to repulse the extremists and the radicals.

Nearly 12 million went to the polls and said:  We want to be free.  I was pleased with the turnout, but I wasn‘t surprised, because I believe there‘s an almighty and I believe that one of the great gifts of the almighty to every man and woman on the face of the earth is freedom.

MATTHEWS:  Well, you never know when a politician says something, whether he made that statement by error, or he made that on purpose, and in the case of what the president said, it‘s possible that he doesn‘t know the case in which John Kerry was speaking yesterday.

Just to remind you who are watching, this is the “Associated Press‘s”

account of what John Kerry said yesterday in Pasadena College.  “Kerry

opened his speech in Pasadena City College with several one liners saying

at one point that President Bush had lived in Texas, but now, quote, ‘lives

in a state of denial.‘” 

He then said, “You know, education, if you make the most of it, you  study hard, you do your homework and you make an effort to be smart, you can do well.  If you don‘t, you get stuck in Iraq.”  That, Kerry said, was a reference to the president, and if you listen to the transition of words there, it clearly looks like he was talking about President Bush being in a state of denial, not realizing when he took us into Iraq what he was going to face, because he didn‘t study hard in school.

President Bush says today, no, he wasn‘t saying that, isolating the few words in the middle of that statement, he said he was trashing the military for being uneducated and the kinds of people who flunk out of school and end up in the military and then get stuck in Iraq.

What is the correct interpretation, Dick Armey?

ARMEY:  Well, of course, this is a perfect example of politics in America.  Perception is reality.  The president wants the people to perceive the president as having maligned our troops.

MATTHEWS:  If you slapped the president into a lie detector right now, what do you believe would be the results, truth or dishonesty?

ARMEY:  Of the president?

MATTHEWS:  Right now.  Was he telling the truth?

ARMEY:  First of all, that‘s not a fair test, you‘re talking about politics here.

MATTHEWS:  We‘re talking about politics.  I love this.  And you can ask...

ARMEY:  ... What does truth or honesty have to do with politics?

MATTHEWS:  Someday you are going to be able to watch politicians, and when they talk, we‘re going to know whether they‘re telling the truth or not.

ARMEY:  I think John Kerry is right.  He‘s making a defense of himself.  He‘s saying, look, I was not maligning the troops.  I was maligning the president of the United States.  And if John Kerry wants to say, I stand on my defense of having said that the president of the United States is not a bright fellow, that he made critical mistakes, didn‘t take the advantage of his education.  If that‘s what Kerry‘s kind of gotten himself in, I know the situation he is in.  It‘s been a hard lesson for me too, but contrary quite frankly to what is a common practice in politics, I can tell you from my own experience, it is better to stay away from personalities.

MATTHEWS:  Like don‘t attack a guy‘s IQ.

ARMEY:  Well, that‘s right.

MATTHEWS:  Which is what he was doing there basically.

ARMEY:  Well, I agree.

MATTHEWS:  Dick Armey, it‘s great, former House Republican leader.  Sir, thank you for joining.  We will be right back to talk about with strategists from both sides to talk about how the Kerry rhubarb might play out.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  You think the president put that at the end of his remarks so we‘d watch the whole thing?  Pretty smart politics.

Anyway, welcome back to HARDBALL.  Let‘s bring in Democratic strategist Steve McMahon and Republican strategist Rick Davis. 

Steve, what was that about?  The president of the United States, a week before a general election, a chance to make a big point, he jumps on a statement made by his former opponent the day before and accuses him of trashing the American troops.

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  Right, accuses him, if you read the “A.P” story and you believe the way it‘s characterized there, perhaps somewhat disingenuously of going after the American troops. 

I think what we have here is another example of nuance by Senator Kerry.  And it was not a nuance that worked in his favor this time.  It‘s clear to me reading that that he was talking about what happens when a president doesn‘t study very hard in school and do his homework, the president gets stuck in a quagmire in Iraq.

It‘s unfortunately not the way it came out, and he‘s going to spend a day explaining it.  And it‘s a distraction, frankly.

MATTHEWS:  Will this go on until the election?  Will this be the big November surprise they were hoping for?

MCMAHON:  The Republicans will it goes on until the election, but it‘s going to last another news cycle, and we‘ll be out of it.

MATTHEWS:  Will it hound Senator Kerry as long as he is in politics?

MCMAHON:  I don‘t think so. 

MATTHEWS:  People will finally—if he sticks to his guns, is he smart?

MCMAHON:  He‘s got to stick to his guns here.  And frankly, if you read the transcript, it looks like Senator Kerry‘s version of the truth is more aligned with the truth, which doesn‘t surprise me particularly.

MATTHEWS:  Rick Davis, truth?

RICK DAVIS, REPUBLICAN STRATEGIST:  You know, it‘s not so much the act, but the cover up.  And I think a lot of what Kerry‘s doing today is keeping the story alive because...

MATTHEWS:  ... Is it a cover up if it was a badly reported story by the president and the other Republicans? 

DAVIS:  It doesn‘t matter.  I mean, if there was any question that he was actually insulting our troops, our men and women in uniform, he should just have said, look, I apologize if anybody took this wrong.

MATTHEWS:  Then he‘s admitting a mistake. 

DAVIS:  Politicians never made a mistake?  This is the problem with Kerry.

MATTHEWS:  Let me ask—I don‘t want to gang up, you guys are talking.  I just want to ask, do you think he possibly meant to ridicule the American fighting person?

DAVIS:  It doesn‘t mater whether he meant it or not.

MATTHEWS:  I‘m going to ask you that.  Rick, I‘m trying to find reasonable people.

DAVIS:  It‘s no question, if you watched the show and if you listened to what he says...

MCMAHON:  ... You‘re on the show, Rick.

MATTHEWS:  Do you think he did it?

MCMAHON:  You have to answer the question.

MATTHEWS:  Do you believe he might have been doing this to make fun of working people, people who went out and fought for their country.

DAVIS:  I don‘t know what he thought he was doing, but what it sure sounded like is he either screwed up a joke, or intentionally maligned him.  And in that case, anybody worth their salt says clean this up and move on.  Does John Kerry really want to be the closing story in the ‘06 election cycle?  Say you‘re sorry and move on.

MCMAHON:  What‘s really funny here Rick, is that you have a bunch of guys in the White House who didn‘t serve, and in fact who went to great lengths not to serve, to avoid service in Vietnam.  Some perhaps didn‘t even show up when they were supposed to.

DAVIS:  This has nothing to do it.

(CROSSTALK)

MCMAHON:  No no, it does have something.

DAVIS:  You want to talk about service, John Kerry stood up today and he said, you know, I‘ve never said anything negative about anyone in the uniform.  What did he do?  When he came back from Vietnam and sat in the front of Senate committee and said that men created atrocities in Vietnam.  Look what he said today.

MCMAHON:  He was talking about the president of the United States. 

(CROSSTALK)

MATTHEWS:  Let me read you two points again.  I‘ve had to do this five times during this hour.  I will do it just so when we when we walk away from this show, you have the facts, you can interpret them as you will.

This is the “Associated Press” story of what happened yesterday at Pasadena City College.  “After Kerry delivered several one liners saying at one point that President Bush had lived in Texas, but now lives in a state of denial.”

He then said, “You know, education, if you make the most of it, you work hard, you study hard, you do your homework, you make an effort to be smart, you can do well.  If you don‘t, you get stuck in Iraq.”

The context is he‘s trashing Bush for not having studied the region of the Middle East, not being prepared for what we‘d face over there, the Sunnis and the Shias and everybody else fighting with each other, being stuck in that quicksand.  That was his point.

Now here‘s Kerry today.  You can take it for what it‘s worth Rick, you‘re invited on the show to express a smart point of view.  Let‘s get at it.

OK, “if anyone thinks a veteran would criticize more than 140,000 heroes serving in Iraq and not the president who got us stuck there, they‘re crazy.”

DAVIS:  And what did Kerry do when he came back from Vietnam.  He criticized men in uniform in war.  They were still fighting the war in Vietnam when he came back and said this. 

MCMAHON:  Let‘s talk about Vietnam—Rick, let‘s talk about Vietnam. 

Let‘s talk about this.  What did the president do?

DAVIS:  Let‘s talk about—there‘s a consistency to this guy.

MCMAHON:  What did Dick Cheney do?  What did everybody over at the White House do?  What did they all do?

DAVIS:  Look, he said—he criticized everybody who attacked him.  John McCain sent out a press release this morning.  He had the same A.P.  article in front of him that you have. 

MCMAHON:  And Rick ...

DAVIS:  He read this and said ...

MATTHEWS:  We don‘t know that.  rMD+IN_rMDNM_We don‘t know—Rick, you don‘t know that and I don‘t know that, but probably he was called by the White House like every one of these other guys, John Boehner, Denny Hastert ... 

(CROSSTALK)

DAVIS:  He read the story. 

MATTHEWS:  How do you know that?

(CROSSTALK)

DAVIS:  Because I talked to him this morning. 

MATTHEWS:  Tell me what he said? 

DAVIS:  And he said, look, this is—he was aghast by this statement. 

And said this is the kind of thing that could not stand. 

MATTHEWS:  With respect to context.

DAVIS:  If there‘s any implication that any politician, regardless of who is or what he did in his youth, wearing the uniform and criticizing ...

(CROSSTALK) 

MATTHEWS:  So you‘re saying John McCain believes that the guy he has always called his friend actually gave a speech trashing American troops as flunkies? 

DAVIS:  I don‘t think he thought he gave the whole speech trashing American troops, but the statement that was read ...

MATTHEWS:  He believes—no, in your belief, John McCain told ...

(CROSSTALK)

DAVIS:  Trashed American troops.

MATTHEWS:  So John McCain told you this morning that John Kerry is such a lousy guy that he makes ...

DAVIS:  He didn‘t say that he was a lousy guy.  He said, look, John Kerry is a friend of mine.

(CROSSTALK)

MATTHEWS:  But anybody who says the people serving in the military right now are in the military right now because they flunked at school ...

DAVIS:  We‘re in the middle of a very difficult war.  Don‘t you think he‘s in a university, he‘s telling these jokes, it‘s a lousy joke.  He should to apologize for implying that he‘s insulted these troops. 

MCMAHON:  The Republicans ...

DAVIS:  I don‘t think you can give him a buy on this and say hey the right thing to do is attack the president ...

(CROSSTALK)

MATTHEWS:  Let me read it for the third time.  “Kerry opened his

speech at Pasadena City College with several one liners, saying at one

point that Bush had lived in Texas but now lives in a state of denial.  He

then says, you know, education, if you make the most of it, you study hard,

you do your homework and you make an effort to be smart, you do well.  If

you don‘t, you get stuck in Iraq.”  Kerry said that was meant as a

reference to Bush, not the troops.  You say it was a reference to the

troops. 

DAVIS:  It could have easily been a reference to the troops.

MATTHEWS:  So what do you think?  What do you think?

DAVIS:  If you‘re standing there—I think it probably was reference to the troops.  But who knows what he was thinking.  I get the right to think whatever I think.

MCMAHON:  The Republican attack machine.

(CROSSTALK)

MATTHEWS:  And of course, that‘s why you‘re here.

DAVIS:  It‘s not a Republican attack.

MCMAHON:  Look, the Republican attack machine is out in force.  The talking points are ...

(CROSSTALK)

MATTHEWS:  No, no, no ...

(CROSSTALK)

MCMAHON:  Can I just say one thing?

MATTHEWS:  You have the perfect right to have an interpretation.  I had that interpretation when I first heard it.

DAVIS:  Right.

MATTHEWS:  Then I read the context.  I saw what he was doing.  He‘s getting into a fit of political rhetoric and he‘s blasting Bush, trying to tell jokes about him, finally saying this is what happens when you don‘t study in school, you end up taking the troops into Iraq. 

He skipped a couple of words.  He didn‘t say it well.  It‘s like a doctor who performs a brilliant operation and then leaves a hammer in the body.  OK, I mean, that‘s what it was like, OK?  I‘m not going to defend his confusing us.  The fact that we are arguing about what he said proves he didn‘t say it well. 

MCMAHON:  He is not in the business of comedy, and obviously, he should stay away from telling jokes, but it‘s clear from the context, it‘s clear from the article, what he was talking about.  He‘s talking about a president who wasn‘t prepared when he went into war—and I think the evidence amply supports his argument—who didn‘t tell the truth to the American people before we went, who attacks everybody, including now John Kerry, that disagrees or expresses a point of view that is even slightly questioning of a policy that‘s an absolute, miserable failure.  They ran Colin Powell out of the administration, that I‘m sure would like to run John Kerry out of the Congress...

DAVIS:  Now we‘re on to Colin Powell and John Kerry? 

MCMAHON:  Well, listen, it‘s what they do.  It‘s what they do, Rick. 

(CROSSTALK)

DAVIS:  And says, look, I‘m more important today than all these guys I‘m out campaigning for...

MATTHEWS:  You wouldn‘t believe the number of press conferences coming into this studio from the top Republicans, all of them, in a grand bit of choreography, not since the June Taylor dancers has there been so much... 

(CROSSTALK)

MCMAHON:  I can‘t believe you are sitting here doing it for them today. 

DAVIS:  Who did that?

MCMAHON:  The Bush campaign.

DAVIS:  If you look at what Kerry said today, he was insulting to John McCain by saying, I‘m only being attacked by people who didn‘t serve. 

MCMAHON:  You remember what they did.  You remember what they did in South Carolina and Virginia, don‘t you, Rick?

DAVIS:  It‘s got nothing to do with South Carolina and Virginia.  This has got all to do with about what Kerry said the better behavior would have been to look.

(CROSSTALK)

MATTHEWS:  If you‘re watching, you read what was said.  You‘re looking at how it was said, how it exploded.  We got to get the full tape, by the way.  That would be very helpful, to watch the whole tape of what he was saying.  Maybe we would have less argument.  I think it is open to both interpretations. 

My interpretation became, after seeing it a couple of times and reading the text of what he‘s saying, he was out there trashing the president‘s lack of preparation for going into Iraq.  And by the way, I agree with him on that.  If this president had more sense of history about the Middle East, we would not be stuck in Iraq. 

Anyway, thank you, Rick Davis.  Thank you Steve McMahon.

When we come back, we‘re going to talk with former Bush-Cheney campaign strategist—love that word—Matt Dowd (ph).

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Let‘s bring in Matthew Dowd, a Republican strategist, and co-founder of hotsoup.com. 

Matthew Dowd, sir, your assessment of this rhubarb?  I am not going to say everybody has the same interpretation.  Mine at first was Kerry said something terrible.  I read the context, I realize now it was a litany of an attack on the president for his basic lack of education in the Middle East before we went to war there.  But you‘re open to any possibility, here, sir.  What do you think is going on here, with the president calling, basically, our attention to a major national speech tonight in Georgia, trashing Kerry? 

MATTHEW DOWD, HOUTSOUP.COM:  Well, I think it‘s actually something that American public doesn‘t care all that much about.  I think John Kerry served in Vietnam very well, misspoke, got jumped on, as what happens in this politics and the way we‘re living today and people jump back and forth.  But I think by tomorrow or the next day, the American public‘s going to want to know what‘s the Democrats‘ plan to get out of Iraq and fix the situation.  And what are the Republicans going to do? 

I think this is just a story that I think the American public, as we found out on “Hotsoup” throughout the course of the last few weeks, this is the kind of thing that we don‘t want us to focus on, they want to focus on the substance of problem.

MATTHEWS:  Do you think Kerry was making fun of troops?  Military people, enlisted men and women as people who can‘t make the academic grade and therefore end up in the military?  Is that what you‘re saying?

DOWD:  Do I think that was his intention?  No.  I don‘t think—I think John Kerry supports the troops.  I think he was a member of the military.  I don‘t think that was his intention.  He said it badly, and different people can interpret it different ways.  But I think John Kerry‘s intention has always been, in his own way, to support the troops. 

MATTHEWS:  You know, when I first worked in politics, back in 1971, believe it or not, when I got back from the Peace Corps in Africa, I worked for a Senator, and I was writing speeches and doing a little answering mail, and things like that, tricky mail.  And the Eagleton affair came along, you know, where Tom Eagleton had that electro, whatever you call it, electroanalysis on himself because of his psychiatric condition years before.  And I got really mad when he got in trouble, and I said, how could people be so cruel in this business?  And he said—this is Frank Moss (ph), a great old guy—he said, the whole business of politics, Chris, is to take the littlest, bitty thing in the world, the littlest, bitty thing, and make it into the biggest thing you ever saw. 

Is that what turns people off to politics, this inflated notion of the smallest thing? 

DOWD:  Well, I think we‘ve with YouTube and with all these different things, and with 24-hour cable, with all the things we have, it‘s what it‘s become, the small nit-picky thing that people focus on and they discuss.  When in reality—what I like to say is what people are interested in is the signal, not the noise.  And I think this is just part of the noise.  And it‘s not the signal.

What people care about in Iraq, it‘s not what John Kerry—John Kerry lost a presidential election.  The American public‘s already made that decision.  What they care about is what‘s going on there and how we‘re going to deal with the situation, not some misspoken statement about whether or he thought the troops were ignorant or not, which I don‘t think, in any way, you could say he thought that.  He misspoke.  And that‘s—but I think it‘s another example, it‘s one of the reasons why I think “Hotsoup”, which you talked about, does so well, is because we‘re trying to have a discussion about stuff that matters to people, not these little, tiny things. 

MATTHEWS:  OK.  Give me three most important issues for people voting in the voting booth that you discovered by talking online to people? 

DOWD:  I think, one, they‘re very worried about Iraq and what‘s going to happen there.  And that is not only Democrats and independence, but Republicans.  What‘s going to happen?  How are we going to make sure Iraq is stable, but, at the same time, bring home our troops as fast as possible?  That‘s what the American public wants.

Two is the economy.  We have an economy, though growing, people are very anxious about it.  The average person changes jobs nine times by the time they‘re 30 years old.  So they‘re very anxious about the economy.

And three, I think just where the country‘s headed in, sort of, from their kid‘s perspective.  What is the educational opportunities?  What are the job opportunities?  sort of, just the future-oriented part of it. 

I think that‘s what‘s going to dominate this election: Iraq, the economy and a sort of a future-oriented “Where is the country going to go?”  And that‘s what I think ultimately is going to be decided. 

MATTHEWS:  Who do you think has been good in our recent history at

addressing these kind of big issues for kids, say, people in there 20‘s,

and they‘re worried about what they‘re going to do in life, and they keep -

they see all these careers changing and the jobs their fathers had, their mothers had, have disappeared and they don‘t know what to do. 

What president can really affect that sort of really personal conundrum or problem?

DOWD:  Well, I think, probably, in my—the forty or fifty years, the presidents that I think have done very well at speaking to the youth, I think Ronald Reagan spoke to the youth and the optimism and the hopefulness of the youth and what they could do.  I think he spoke very well. 

MATTHEWS:  I think you‘re right. 

DOWD:  And I think John F. Kennedy actually spoke in a similar way to the same pattern.  I think those two presidents probably, in a way, pointed a direction for the future of the youth, and I think that‘s what we need for the next president. 

MATTHEWS:  Well, (INAUDIBLE) to be that good, to be that good with young people.  Anyway, thank you, it‘s great having you on.

Thank you for your candor, Matthew Dowd.

Right now, it‘s time for “TUCKER.”

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

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