updated 2/9/2007 10:14:15 AM ET 2007-02-09T15:14:15

Guests: Jon Tester, Terry McAuliffe, David Schertler, Eric Cantor, Steve Israel

CHRIS MATTHEWS, HOST:  A change of plan.  Seven Republican senators declare war on the escalation.  They‘ll attach their anti surge resolution on any bill that passes them.  Who says elections don‘t matter?  Who says it‘s only Democrats who worry about Bush‘s thinking?  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL tonight.  Seven Senate Republicans break free.  Early this week all but two Republicans united to block the debate on a resolution opposing President Bush‘s escalation of the war in Iraq.  Then came the headlines blaming them for killing the debate over Bush‘s plan to send in more than 20,000 more troops.

Are the Republicans getting the message that the American people not only demand a debate they want action from their leaders in Washington?  More on this with the new Democratic Senator Jon Tester of Montana.  He‘s the guy with the crew cut.

Plus House leaders say if the Senate won‘t debate the war, they will.  Later, a red-hot debate against Congressman Eric Cantor and Steve Israel and later NBC‘s Tim Russert finished his testimony today in the Scooter Libby trial.  HARDBALL‘s David Shuster will have a full report.  But first NBC‘s Mike Viqueira is on the Hill with the latest.  Mike?

MIKE VIQUEIRA, MSNBC NEWS CORRESPONDENT:  Chris, good afternoon.  House Democrats will over three days next week put a resolution on the floor that would be very simple.  Simply expressing opposition to the president‘s policy of sending 21,000 more troops into Baghdad and Iraq.  They will contain nothing on funding for the troops.

Remember, this was the tripping point in the Senate that caused that disagreement over process that didn‘t even allow them to get started with the debate.  Nancy Pelosi, Steny Hoyer, the Democratic leaders have said this is merely a first step.  They talk about March 15, that is the day that Jack Murtha will put out his bill that will fund the war for another $100 billion for the rest of this year.  Now I had an opportunity to ask Pelosi and Murtha yesterday whether that funding bill will affect the war.

Remember there are brigades that are yet to be deployed to Baghdad by March 15.  They don‘t expect them to get there until May.  Murtha told me, yes, he hopes it will then I asked him if perhaps he‘ll use that bill to close Guantanamo Bay, that‘s something that‘s been tossing around, and he said he would like to do that and they are indeed looking at that.

Now you mentioned those seven Republican senators.  They‘re going to try to attach this resolution that they could not get on the floor of the Senate to any upcoming bills including the big spending bill that‘s coming down the pike right now.  We should mention that five of the senators that are signatory that that are up for re-election in an environment that‘s been very difficult for Republicans and if the war keeps going the way it has been going, continues this way, it will remain so in 2008, Chris.

MATTHEWS:  So now, let‘s just go to both sides of the Hill.  On the Senate side, do you believe those seven Republicans are ready to stick to their guns now having seen the headlines that bashed the Republicans for preventing a debate.  Will they insist on adding their resolution as a rider?  We‘re talking about the Warner resolution which is bipartisan.

VIQUEIRA:  Well, they are still led by John Warner and its not John Warner‘s style to be really confrontational on major bills.  Take the spending bill for example.  Almost $500 billion which will keep the government running until October 1 of this year.  Unclear whether he‘d try to block that to attach this resolution onto it but a number of other things coming through the Senate and they have pledged to do so.

Democrats say this is again a first step in the House and they‘ve had hearings going on beginning this weak, beginning with Henry Waxman, waste, fraud and abuse.  What they hope to do is sort of break the ice around Republican‘s position.  Even John Boehner, the Republican leader says he expects many Republicans to join in voting for this resolution on the House floor next week, Chris.

MATTHEWS:  So there is less than 200 Republicans in the House now.  What do you think is a reasonable ballpark as to how many would have to feel because of the constituents back home, they would have to back an anti-surge resolution?  Are we talking 50, something like that?

VIQUEIRA:  Probably around that.  I think there are 202 Republicans now in the House of Representatives.  You have to remember only 10 percent of all the House members have a competitive race coming up in any given election year and so that might you mitigate things somewhat.

But look, Republicans are not going to fall on their sword for this president anymore.  I think that‘s clear and a lot of them have a lot of trepidation about going foursquare behind the president although they will try offer a resolution as a substitute in the House.

And I hate to get into process, Chris, but we‘re not going to run into those procedural road blocks in the House that we saw in the Senate.  The Democrats or any majority can pretty much ram through whatever they want to do.  We saw that last June when Republicans put a resolution on the floor saying we support the troops and largely dared Democrats to vote against it and Democrats were not offered—allowed to offer the resolution that they wanted to offer, Chris.

MATTHEWS:  All right.  The good old House Rules Committee.  Thank you very much, Mike Viqueira.

Democratic Senator Jon Tester of Montana is a member of the Homeland Security and the Veterans‘ Affairs Committee.  He says the Warner resolution is just the first step the Congress needs to take.  Are you hopeful that there will be a vote by those seven Republicans and most of the Democrats to state your opposition to this surge of troops into Iraq?

SEN. JON TESTER, (D) MT:  Absolutely.  I‘m actually disappointed that the cloture vote didn‘t come to fruition so we could have that debate and have that vote this week.  Now we‘ve got a situation where we have the continuing resolution that‘s going to come up that we have to get voted on and passed by midnight a week from today otherwise potentially the government shuts down.

So, I think without being too critical, we really have wasted some time this week where we could have been debating that surge, augmentation, escalation, whatever you want to call it, proposal by the president and really give the president a clear sign of where the U.S. Senate was on this issue.

MATTHEWS:  If you want to give them a clear sign, why not let the Republicans have their motion forward as well which says cut off the funds so then you‘d have to see that your side would win on the resolution, the nonbinding aspect of criticizing the president but you‘d probably fall short and divide as a party of cutting off funding for the troops.  What‘s wrong with giving the Republicans a chance to show how your party is divided if you‘re showing how their party is divided?

TESTER:  I think first of all if you can‘t get enough votes for cloture on a resolution dealing with the surge that the president proposed which is really the issue that‘s in front of this country right now is a surge of additional troops into Iraq, you know, I think, the proposal about cutting funding off for the troops and the war in Iraq and how it‘s been administered and how the political leadership has failed on that, there‘s been plenty of time to talk about that over the last four years and .

MATTHEWS:  What‘s wrong with voting on both at the same time?

TESTER:  Because I think the issue before us now is the escalation, Chris, and I think that‘s what‘s really important.  The president proposed an escalation for Iraq.  I think we need to deal with that first.  I agree it is the first step and we can deal with that other stuff later.

MATTHEWS:  Let me tell you, a lot of people out there, and you know them, who want to see the money cut off.  They want to see the Congress say no more war and make it stick.  There are people who want more than a resolution.  They want somebody to say I‘m cutting off funding for this war because it‘s the only way to stop this war.  Shouldn‘t those people get a vote?

TESTER:  First thing‘s first.  The escalation—if we can‘t get a vote on the escalation, we‘re certainly not going to get a vote on any other thing that deals with the war in Iraq.  Whether it‘s troop caps or whether it ...

MATTHEWS:  One of the danger flags the Republicans especially have put up is any time there‘s a debate on this war that it hurts the morale of the troops.  Let‘s hear what General Peter Pace had to say just yesterday on that very point.

(BEGIN VIDEO CLIP)

REP. JOHN MCHUGH, ® NY:  Gentlemen, I‘d like your honest, forthright, candid advice to this committee as we are beginning at the Senate is now to consider non-binding resolutions that express concerns and lack of support for the surge mission, how that might be received by the troops in the field?

GEN. PETER PACE, CHAIRMAN, JOINT CHIEFS OF STAFF:  Sure, I‘ll start.  There is no doubt in my mind that the dialogue here in Washington strengthens our democracy.  Period.

(END VIDEO CLIP)

MATTHEWS:  Well, there you have it.  That‘s pretty impressive from a man with all those ribbons on to say it‘s OK to have a democracy here because we‘re fighting for one over there.

TESTER:  Yes.  I think we‘ve lost tremendous amount of lives, we‘ve spend what, $500 billion on the war.  Potentially could be another $200 billion by the end of the year.  I think it‘s appropriate we debate the issue.

MATTHEWS:  Is it important to have the support of a general like that to say it‘s OK to exercise your rights as a senator?  Or don‘t you need that?

TESTER:  I don‘t think need that but I‘m glad he said what he said.

MATTHEWS:  Do you think that‘s going to affect the course of the debate and allow the Republicans especially more opportunity to debate this issue.

TESTER:  I think—I‘ve been here for a month.  Iraq has been the issue.  The overwhelming, overarching issue that‘s taken all of the air out of the room.  I don‘t know if you‘re talking about minimum wage or ethics, it doesn‘t matter.  Iraq still there.  It really is time .

MATTHEWS:  True here, by the way.  Let me look at the senators.  Chuck Hagel, Susan Collins, Olympia Snowe, both of them from Maine, of Course, Republicans, Voinovich of Ohio, Gordon Smith of Oregon, Norm Coleman of Minnesota.

You can get a little cynical here and point out the following that Voinovich just saw Sherrod Brown knock off his colleague.  Mike DeWine, a good guy.  He got knocked off, Mike DeWine in Ohio.  You have got to figure Voinovich is worried.

You‘ve got to figure anybody from Oregon which is a well known an anti-war state for years going back to the McCarthy-Kennedy campaign back in ‘68 and you‘ve got to look at Coleman and wonder if he doesn‘t see Al Franken coming or somebody like him on the Democratic side—is this what‘s shifting the debate against the war?  The Democratic, Republican, concern, whatever, the concern for re-election?

TESTER:  I hope not.

MATTHEWS:  Why not?  What‘s wrong with the voters having some power in this country?

TESTER:  I think the voters do have power in this country.  And they showed it in the last election.  But what I really hope promotes people to debate this is the fact that this country is in the middle of a quagmire where there‘s no end in sight for this war and there‘s no plan and there still is no plan.

MATTHEWS:  What are - without naming them, perhaps, why are your Republican senators who are opposed to this surge who agree with you, that it‘s not good to escalate this war, let alone whatever, what did they say to you when they voted party line early this week to oppose any kind of vote on the floor?

TESTER:  To be honest, I didn‘t quiz them on it and I don‘t know why they did what they did.  We need more than seven to get cloture.  We need 11 I believe.

MATTHEWS:  You don‘t get Lieberman and you don‘t get Tim Johnson.  He is ill.

TESTER:  Right.  So we need four more to get cloture so we can debate and vote on it.  And I don‘t know why they did what they did and I don‘t know why the two Republicans who voted for cloture did either.  But I do know that this is a critically important issue and I do know the fact that the president stepped forward about a month ago and saying, we‘re going to put up in another 21,500 that ends up to be closer to 50,000 troops into Iraq, I think that needs to be discussed.

MATTHEWS:  “Mr. Smith Goes to Washington”, I‘m told, the book I think was from Montana.  The gentleman from Montana?  Isn‘t it?  Jimmy Stewart was from Montana?

I am getting close to what I want you to do now because asked Jim Webb, another senators, why don‘t you go on the floor right now, go over to the floor, ask for the floor and begin to filibuster and say, I want to vote and stay there until you get a vote?  Why don‘t you go on the floor and demand a vote?  If you really had the passion of people like moveon.org out there, the people who really want to stop the war, why don‘t you act like it?  I‘m is not a senator.  I‘m egging you on here, obviously.

TESTER:  First of all I would hope that we can get things done without having a filibuster.

MATTHEWS:  But that ain‘t happening.

TESTER:  You‘re right it‘s not happening but we have a continuing resolution now that we have to deal with or the government shuts down period and there are a lot of people depending upon government dollars.

MATTHEWS:  Maybe you can shut the war down this way.

TESTER:  That might be a possibility.  We‘ve been here a month.

MATTHEWS:  You‘re not getting institutionalist are you, senator?  You are using words cloture.  Are you falling into the Mondale trap here of talking like these guys?  Next you‘ll be asking for a moment of personal privilege, start talking like these people.

TESTER:  I wished I could but I‘ll never be there.  The fact is that this war needs to be debated for all the right reasons.  We shouldn‘t have to filibuster this debate.  Or filibuster to get a debate.

MATTHEWS:  Maybe you may have to.  Because I hear these institutional strains in your voice already and it‘s going a little worried.  You‘re not going over to the crazy side are you?  Jon Stewart said that the other night to McCain, I really respect the fact that you run for the senate.  We need more people to run for the Senate and have the guts to take on the system.  Thank you for that.

TESTER:  Thank you, Chris.

MATTHEWS:  I love democracy and I love the fact that it works sometimes.  Thank you.  The crew cut guy.  Mr. Tester.

Coming up HARDBALL‘s David Shuster will have the latest news from the Scooter Libby trial and later Hillary Clinton‘s campaign chairman himself, Terry McAuliffe, will be here.  He plays golf with Bill Clinton.  We‘re going to ask how many mulligans Clinton takes every game.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  This afternoon prosecutor Patrick Fitzgerald rested the government‘s case against Scooter Libby in federal court and HARDBALL‘s David Shuster was there.  David?

DAVID SHUSTER, MSNBC CORRESPONDENT:  Chris, the final witness for the prosecution was Tim Russert, the NBC bureau chief, but he faced a withering cross examination again today.

Prosecutors have alleged that Scooter Libby lied about his conference with Russert in order to obstruct the CIA leak investigation.  Russert testified that he never discussed Valerie Wilson with Scooter Libby.  Scooter Libby said they did.

So once again the defense really went hard at Tim Russert.  At one point they even thundered at Tim Russert saying, only answer the questions we ask you, OK?  They went after the fact that Russert didn‘t keep notes.  They went after the idea that Tim couldn‘t remember what day of the week the conversation with Scooter Libby really was.  At one point at the end of the cross exam they even brought the fact that on the day Scooter Libby was indicted, that morning Tim Russert talked about the expectation there would be big news and talked about Santa Claus bringing surprises under the tree.

Russert was asked if he was talking about Santa Claus as Patrick Fitzgerald.  Russert denied that.

Then on a very short redirect, Patrick Fitzgerald asked Tim Russert, did you feel any joy when Scooter Libby was indicted?  And Russert said in a very low voice, “Gracious, no.”

Of course the conversation Scooter Libby had with Tim Russert, Chris, was prompted by a series of reports that you were putting on HARDBALL about some criticism that Joe Wilson had leveled at the administration a couple of days earlier suggesting that the administration‘s case for war was flawed.

You were raising questions about whether the officer of the vice president may have known about Joe Wilson‘s conclusions that Iraq was not seeking uranium from Niger before the president‘s State of the Union and on audio tape you can here Scooter Libby talking about his agitation towards you.  Let‘s listen.

(BEGIN AUDIO CLIP)

SCOOTER LIBBY, FORMER CHENEY CHIEF OF STAFF:  He was just saying flat out that the vice president had known this and should have told the president.  Otherwise - and me also, me by name.  And so this was frustrating to us and we wanted to get him to acknowledge that the public record was other than he was - as he was saying.  this wasn‘t the first time Chris Matthews had said something negative about the White House and I had prior discussions about this with Mary Matalin who was for the first two years, as I mentioned, lo these many hours ago, had worked for the vice president as our communications person.

And so I called Mary to find out what she thought we could effectively do to try and get Mr. Matthews to acknowledge the public record and to stop saying these things in such an unqualified and incorrect fashion.

I reached Mary by phone and she had her own view of where we were and relayed to me in depth her view of where we were and - but also in the course of it, said, look, the thing for you to do is to call Tim Russert and she gave me her phone number which I wrote on my notes which I turned over to you guys.  And so I called Tim Russert.  You want me to continue?

QUESTION:  Before you - yes, continue.

LIBBY:  So I called Tim Russert, I can‘t recall whether I got him on the phone right away or whether he had to call me back.  When I eventually spoke to him - this note with Mary Matalin is dated on the 10th and I think I called Mr. Russert sort of lateish on the 10th, late afternoon or early evening and went through - I got him on the phone .

(END AUDIO CLIP)

SHUSTER:  Scooter Libby then went on to testify that Tim Russert told him, did you know that Valerie Wilson worked at the CIA?  Prosecutors contend that statement was a lie and they have put in evidence suggesting that Scooter Libby‘s motive in this case to lie was to protect the office of the vice president and somehow obstruct the CIA leak investigator so knowing about the events that led to the outing of Valerie Wilson.

One of the theories of course is that Scooter Libby was trying to protect Vice President Cheney himself and one of the most intriguing portions of the audio tape came when Scooter Libby is describing a conference with Vice President Cheney in October of 2003.  The criminal investigation into the outing of Valerie Wilson had begun.  Scooter Libby had seen some notes presented to him by the FBI.  Scooter Libby‘s own hand written notes showing that Scooter Libby had learned about Valerie Wilson in a phone call from Vice President Cheney about a month before that Tim Russert conversation and Scooter Libby describes to the grand jury going back and having a conversation about this with Vice President Cheney.  Let‘s listen.

(BEGIN AUDIO CLIP)

LIBBY:  I went back to see him and said, you know, I told you something wrong before.  It turns that I had a note that I had heard about this earlier from you and I just - you know didn‘t want to leave you with the wrong statement that I heard about it from Tim Russert.  In fact, I had heard earlier but I had forgotten it.

QUESTION:  And what did he say?

LIBBY:  He didn‘t say much.  He said something about, “From me?” something like that and tilted his head, something he does commonly and that was that.

QUESTION:  And did he ever indicate to you, other than saying that you don‘t have to tell him everything, the reason why he didn‘t want to know?

LIBBY:  I think one of the times when I went to see him to tell him that I wouldn‘t be available to him, that I would be out for the day for an FBI interview or something like that, he said, “Fine,” and held up his hand, you know, “I understand.”

And he either said or I took it from him, we shouldn‘t talk about the details of this.

(END AUDIO CLIP)

SHUSTER:  “We shouldn‘t talk about the details.”  Well it‘s worth noting, Chris, that at that grand jury, Scooter Libby forgets some crucial details about conversations with Cheney earlier in the summer including Libby saying he might have discussed with Vice President Cheney using Valerie Wilson‘s status to us undercut Joe Wilson but Libby keeps saying on that he cannot recall.  Chris?

MATTHEWS:  Thank you very much, David.

For more on the Scooter Libby trial we turn former federal prosecutor David Schertler.  If you listen to Scooter Libby‘s testimony all these days now, it seems like it‘s careful, very well-thought out.  He‘s obviously well-lawyered.  But you can read into it, very serious conversations between him and the boss, Cheney.

DAVID SCHERTLER, FORMER FEDERAL PROSECUTOR:  No question.  I think that his testimony reveals that in the grand jury.  I think we also have documents and notes that reveal this was a very important topic to the vice president in June, July of 2003 and other witnesses have testified to that.

MATTHEWS:  Why did they nail this guy for perjury on a number of counts, obstruction, when they must have surmised that he was working hand in glove with the vice president?  And then he allowed the vice president to testify without going under oath?  Why didn‘t he call the vice president and say, I‘ve got reason to believe there‘s something I want to learn that could relevant to this case.  You have got to talk to me under oath?  Mr.  Vice President.  Why didn‘t he do that?

SCHERTLER:  That‘s a tough question to answer.

I am not sure what Pat Fitzgerald was looking and what he was considering.  I don‘t have any doubt that if Pat Fitzgerald thought that the vice president had committed any kind of false statement or perjury that he would have indicted him as well.

MATTHEWS:  He couldn‘t have committed perjury because he wasn‘t under oath.

SCHERTLER:  He wasn‘t under oath.  He couldn‘t have committed perjury but obviously even in the interviews he could have committed false statements.  I think that what you have here is the prosecutor believes is a very clear case of intentional perjury and false statements on the part of Scooter Libby but even in their discussions they never had enough evidence to prove that whatever Vice President Cheney was telling them wasn‘t true.

MATTHEWS:  Let‘s move ahead.  You‘re a prosecutor.  You know about defense.  You know about smart defense.  Will they put Libby on the stand?

SCHERTLER:  That‘s always the tough question for the defense attorneys.

MATTHEWS:  The down side and up side, either way.

SCHERTLER:  Upside is this is a false statements case.  This case rests on the intent of Lewis Libby and what was going through his mind when he was testifying in the grand jury and talking to the FBI.  I think in that respect he‘s got to testify.  The jury wants to hear him say that this was an honest mistake.

MATTHEWS:  I forgot.

SCHERTLER:  I forgot.

MATTHEWS:  That would fit into the prosecution argument.  Because even Tim, everybody has been exposed as forgetting something.  Even if something about an old Buffalo news issue.  It seems like he‘s gone around and said, I‘m going to be able to say in summation that every government witness, every journalist witness has been found someplace they couldn‘t remember.  Therefore how can—he who‘s without guilt throw the first stone kind of thing.  Is that going to be the summation to the jury?

SCHERTLER:  That‘s going to be part of the summation to the jury.  I think what the defense has to do now that the prosecution has rested, they also is have to show evidence if not through Lewis Libby himself, through other witnesses and documents, about what a day in the life of Lewis Libby was like, what kind of issues he was dealing with so that they can connect that argument to say, look, a year later when he‘s being asked .

MATTHEWS:  Can you still do that after all of this prosecution testimony that this guy seemed to be sitting down there with—like Nixon and Haldeman, every hour going over how to get somebody like me?

How do you say he wasn‘t think being it when he‘s got notes from HARDBALL, annotated copies of the “New York Times” column by Joe Wilson with the vice president‘s writing on it?  All this stuff?

SCHERTLER:  That‘s what the prosecution in this case has done most effectively.  They‘ve shown that in that month, in June of 2003, this was something that Mr. Libby was thinking of on a daily basis.  I think what Mr. Libby has to say is, this might have looked important at the time but in the mix of other things .

MATTHEWS:  If people watched this show like Scooter and Dick watched it, it would be beaten “American Idol” right now.

OK.  David Schertler is going to come back with this and later the chairman of Hillary Clinton‘s campaign is going to be joining us, Terry McAuliffe.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARBDALL.  I‘m back with former federal prosecutor David Schertler.  Will the vice president testify?

SCHERTLER:  Yes.  I think he has to testify in this case.

MATTHEWS:  Does he expose himself to all kinds of questions about what he was doing with Scooter in the back room?

SCHERTLER:  The vice president?

MATTHEWS:  The vice president.

SCHERTLER:  I don‘t believe the vice president will testify in this case.

MATTHEWS:  Just his former chief of staff will?

SCHERTLER:  Yes, I think that‘s right.  What you‘ve got with the vice president, he cuts both ways.  The prosecution wasn‘t going to call him, I don‘t think the defense will call him.  And I don‘t think they‘ll call him because on cross examination the vice president is going to be confronted by his own notes and his own writings about how important this issue was to him.

MATTHEWS:  This was to him.  So his annotations on the Joe Wilson column in the “New York Times” said blablabla, his wife sent him, it all brings him into the intrigue here.

SCHERTLER:  Absolutely.  And it shows this was a priority of him to get to the bottom of who was Joe Wilson and why had he gone to Africa?  And of course if it is important to him, it was going to be important to Lewis Libby.  I think the defense will not call him because that will hurt them.

MATTHEWS:  It‘s a great story to watch.  It‘s a great Washington story.  I hope everybody comes out of this right but I tell you it‘s a hell of a Washington story.  And I like the fact that we‘re learning things.

SCHERTLER:  We‘re learning a lot of things that we otherwise wouldn‘t see.

MATTHEWS:  We‘re learning how this war started.  Thank you very much, David Schertler.

Up next, Hillary Clinton‘s campaign chairman Terry McAuliffe.

And later, U.S. Congressman Eric Cantor and U.S. Congressman Steve Israel will give us an early taste of this week‘s hot fight in the House over Iraq.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  A little bit less than a year before the primaries and caucuses are underway.  Who‘s on the best shape in the Democratic side?  Terry McAuliffe is Hillary Clinton‘s campaign chairman.  He was chairman, by the way, of the Democratic National Committee and author right now of the hot Washington bestseller, “What a Party!  My Life Among Democrats, Presidents, Candidates, Donors, Activists, Alligators and Other Wild Animals.”  See that book, it‘s in your book store right now.  It‘s probably up front near the point of purchase cash register.

TERRY MCAULIFFE, HILLARY CLINTON‘S CAMPAIGN DIRECTOR:  Beautiful.

MATTHEWS:  Let me ask you right now about this campaign.  Why are the Democrats all saying we don‘t want federal money, we want to spend this thing through the roof?

MCAULIFFE:  Why should we be taking taxpayer money when we can afford this ourselves.  People want to give us money, we ought to be able to do it ourselves.

MATTHEWS:  Take the big money out of politics.  What happened to the ethics of Watergate?

MCAULIFFE:  First off, the most you can give is $2,300.  Let‘s be clear on this.

MATTHEWS:  Or $4,600 in Hillary Campaign.

MCAULIFFE:  That‘s the general.

MATTHEWS:  Giving it now.

MCAULIFFE:  Twenty-three hundred, $2,300, yeah.  It‘s not like your old Republican friends with bags of cash.  This .

MATTHEWS:  My Republican friends?  How many they are.

Let me ask you about “The Washington Post” lead editorial today.  I put it up right now.  They say Hillary refuses to list the names of her big bundlers.  The $250,000 club, the $25,000 crowd, these are the people that bundle together lots of campaign soft money.  Why doesn‘t Hillary, your campaign, tell us the names of those people who are giving money?

MCAULIFFE:  We might.  We don‘t have any bundlers yet because we haven‘t had anyone collect our money yet.

MATTHEWS:  Are you committing now to let us know the names of who‘s giving money?

MCAULIFFE:  We might.  I‘m just back in town from a two-week trip.  I have to meet Patty Seliz-Doyle (ph) who is our campaign manager.  Jonathan Manz (ph) our finance director I‘m meeting tomorrow.  We‘re all for full disclosure.  We have nothing to hide.

MATTHEWS:  When‘s it going to happen?

MCAULIFFE:  When is what going to happen?

MATTHEWS:  When are you going to tell us who is bundling money?

MCAULIFFE:  We‘re going to meet tomorrow and figure it out.

MATTHEWS:  Let me tell you why it‘s important.  When Dick Cheney who takes a lot of heat on this program and appropriately so for such issues as energy, where he pulled together a lot of big oil people into his back room and developed an oil policy and won‘t tell us who the oil guys were and Democrats raised hell about that.

MCAULIFFE:  We want transparency.  We want people it to know and I can promise with you President Clinton, they‘re going to know.

MATTHEWS:  So this editorial is unnecessary?  You guys are going to release the names of your big money people?

MCAULIFFE:  We‘re going to have a meeting tomorrow, as I say with the campaign manager, Patty Selize-Doyle, but I‘m all for let‘s let people see.  We have nothing to hide.  Absolutely nothing to hide.  We‘re proud of this campaign.  Hillary is out there, she is doing great.

MATTHEWS:  Transparency is coming?

MCAULIFFE:  You bet.

MATTHEWS:  Thank you.  Let me ask you about the February 5.  A while ago during a social time you and I had, where I think you were on the record but it‘s not a tough thing you said.  You thought this election will be done by February 5.  That‘s before you knew—or was it—that California was moving?

MCAULIFFE:  California was filing the papers.

MATTHEWS:  So you knew the big states were coming in?

MCAULIFFE:  Yeah.

MATTHEWS:  I‘m thinking this way.  Hillary can take a couple of bumps.  She can may be lose to Edwards in Iowa, close call, she can lose maybe another close call in Nevada.  Come back because of her strength and win in New Hampshire win and maybe in South Carolina.  But the big one is the money one, if she wins in California, she just swamps these other elections, doesn‘t she?

MCAULIFFE:  We are 15 points up in Iowa, the poll that came out two days ago.  We‘re 14 points up in New Hampshire.  You know how I feel about these things.  We‘re going to win them all.  But it‘s not only California from what we hear.  And we don‘t control any of this.  This is the states.  But it‘s New Jersey, it‘s Michigan.

MATTHEWS:  You think they‘re all by February 5?

MCAULIFFE:  I just flew in from Illinois and they were telling me, they were coming.  It‘s over by February 5.

MATTHEWS:  Did you see this swamp coming that early?  That they were all coming that early?

MCAULIFFE:  Listen, I was the chairman of the party.  I‘ve lived through this for four years with states saying I wanted to move up.

MATTHEWS:  You‘re not under oath.  Did you know this was all going to happen?  You knew it all, didn‘t you?  That they were up all coming up to February 5?

MCAULIFFE:  I knew the calendar process, I can tell you that.  And I knew these states wanted to come up.  They don‘t like the idea of Iowa and New Hampshire getting all the press.

MATTHEWS:  This creates a situation where the candidate with the most name I.D. and the most money and the most organization can roll into the nomination so early.

MCAULIFFE:  You like to know the facts and let me tell you what the deal in California is.  It has nothing to do with the presidential primary calendar.  Talk to anybody out there.  It has to do with term limits.  They‘re trying to get rid of term limits in California.

MATTHEWS:  So they want an early count on that.

MCAULIFFE:  It also has to do with their reapportionment.

MATTHEWS:  They want to have an early vote in the year so they can get on the ballot in the end of the year.

MCAULIFFE:  Exactly.  It has nothing to do with presidential campaign.

MATTHEWS:  So it‘s serendipity for you guys.

MCAULIFFE:  Whatever happens.  We‘ll deal with whatever we got.

MATTHEWS:  It‘s—how much money will you drop in California with that L.A. media market that reaches three quarters of the voters of that state?  How much money can you spend in California to blow out the opposition?

MCAULIFFE:  You just saw the gubernatorial candidates spending $50, $60, $70 million out there.

MATTHEWS:  Can you spend that kind of money in a presidential primary?

MCAULIFFE:  I‘m just going to say we‘re going to have the resource we need and we‘re going to run a very competitive campaign.

MATTHEWS:  Like Walter Mondale.  Resources.  Come on.  Money.  Say the word money.

MCAULIFFE:  Money.  We will have the necessary monies we need to run this campaign.  But you know what, Hillary is having fun, we‘re ahead in the polls.  We have a long to go but we‘re doing great.

MATTHEWS:  Is it a healthy thing for you and your campaign for Hillary to have a woman of that—she is controversial.  She‘s got more favorable than unfavorable but a very high unfavorable.  She gets the nomination lock up by February.  She has to defend her nomination from February of 2008 to November of 2008.  That‘s one heck of a lot of exposure isn‘t it?

MCAULIFFE:  It‘s the same for whoever the Republican nominee is going to be also.

MATTHEWS:  You think he or she - he probably will be picked by then?

MCAULIFFE:  Of course it‘s going to go both sides.  We‘ve been through this before.  For the other primary candidates, until you‘ve run for president and you have been in this meat grinder you have no idea what‘s coming?

MATTHEWS:  Is your friend Bill going to be in this campaign?  Going to be busy with the campaign, not get any distractions going with other things?

MCAULIFFE:  He‘s going to be very busy.

MATTHEWS:  No distractions?  He‘s writing a book.

MCAULIFFE:  He‘s got a distraction right now.  He‘s writing a book for the next two months.

MATTHEWS:  Will he distract our attention from his wife by misbehavior?

MCAULIFFE:  No sir.

MATTHEWS:  He won‘t?  He‘s going to be a good boy?

MCAULIFFE:  His wife is running for president.  He‘s going to do everything—he‘s the most popular man in the world today.

MATTHEWS:  It doesn‘t kill me if he does distract from this campaign. 

We do not want to go back to 1998.  Some people do.

MCAULIFFE:  I think 1998 in the congressional elections we actually picked up seats.  Is that what you‘re referring to?

MATTHEWS:  Is that how you keep score?  I keep score, he got impeached.

MCAULIFFE:  Chris, let me just tell you this.  She is running for president of the United States.  This is about Hillary Clinton and her campaign.  Her vision.

MATTHEWS:  He‘s part of this?

MCAULIFFE:  You bet.

MATTHEWS:  He‘s going to do whatever it takes for her to win?

MCAULIFFE:  You bet.  Absolutely.

MATTHEWS:  Let me ask you about the candidates.  You have a three-way race coming up in Iowa.  You say you‘re ahead of this there right now.  What about John Edwards.  I thought he was ahead.

MCAULIFFE:  A poll came out two days ago.  Hillary went there and announced on Saturday.  She went out there, did her first trip after that.  And as you know, 500 people were supposed to show up, 2,800 people came.  We had to get an adjoining gym and telecast it in.  There was so much excitement.  People are excited about having the first female president.  They know that Hillary is tested, she is strong, she‘s principled.

MATTHEWS:  Do you think she‘s overstaffed?

MCAULIFFE:  I think Hillary does whatever she wants to.

MATTHEWS:  Doesn‘t she seem overstaffed to you?

MCAULIFFE:  It‘s hard for Hillary .

MATTHEWS:  No, no, I don‘t mean that.  She said something pretty funny the other day and she should have just left of at that and everybody knew what she meant.  It was clear, it was a funny joke, maybe it was a little .

MCAULIFFE:  Ken Starr .

MATTHEWS:  OK.  Whatever.  It wasn‘t Ken Starr.  It was her husband.

MCAULIFFE:  I‘ve been married 18 years.  My wife has said lot of things about me, too.

MATTHEWS:  I‘m with her.  I think it was a funny joke much we all know what she went through.  Why did she have to go back and rediscuss and reanalyze it and reposition?  Why doesn‘t she just let what she says stand.

MCAULIFFE:  I think it was fine when she said do you guys want me to be funny and now I‘m funny and now you psychoanalyze me.  I thought that was pretty funny too.  You can tell Chris, if you watched the last two weeks, this is her campaign, forget the staff .

MATTHEWS:  She doesn‘t think she‘s overstaffed?  She doesn‘t have people saying, you should have said this, you should have said this.

MCAULIFFE:  I give her one piece of advice every day.  Go have fun and she‘s having fun and this his time.

MATTHEWS:  She‘s more attractive that way.  Let me ask you about her speaking ability.  Does she have to deal with the fact that she can‘t speak to a large room?

MCAULIFFE:  I think she can.

MATTHEWS:  She‘s terrible at it.  She‘s wonderful—in public speaking, that would be interesting.

MCAULIFFE:  You can tomb my big book party, she‘ll be speaking, see how you do.

MATTHEWS:  I think her problem is that she yells and she talks in a scolding fashion rather than in a way that‘s winning and charming.  Whereas Bill knows how to modulate.

MCAULIFFE:  All I can tell you, we‘ve been in this thing for two weeks, we‘re winning today.  We know we have a long way to go.  People are attracted to her candidacy.  People are excited about it.  If you want to nit pick this and that, I think she‘s a great speaker.  I adore the woman, I love her, she is going to win.

MATTHEWS:  Let me ask you about the big arc of this campaign.  I find it totally a mystery.  She could have the kind of excitement that you have and that‘s what you‘re known for in this book.  “What a Party!”  You are a party.

MCAULIFFE:  I love life.

MATTHEWS:  The excitement she builds, the overwhelming charisma of her family, she and her husband come into a room and it just wows people to the point, hey, this is going to happen, so everybody rolls back and they say she‘s got it.  I think a lot of republicans are saying, this is her year and they‘re saying, let her have four years.  We‘ll get her in the White House.

Then there‘s the other part of me that says she‘ll go right up to the edge, sometime in August of 2008 and the gender thing a the past will kick in and all of a sudden people will go, I don‘t know.  Back to Bill and Hillary again.  Back to the sitcom.  Back to this.

I don‘t know if I want to vote for a woman.  She‘s too liberal.  Do you think there might be a that second hiccup whether people go, I don‘t know.  But you don‘t think that‘s going to happen?  You think it‘s a roll from here on it.  It‘s going to sweep the country, she‘s going to win, it‘s going to be an exciting like 1932, 1980, one of those campaigns?

MCAULIFFE:  Yeah, but it‘s going to be a lot w of work.  What the American public wants, Chris, forget all of this, they‘re sick of what‘s going on in Iraq today.

MATTHEWS:  I‘m sick of what‘s going on in Iraq.  I wish she would come out against it.

MCAULIFFE:  And she will offer a dynamic change to this country—

They want results.

MATTHEWS:  I worry she hasn‘t had a clear enough position on this.  Do you think she‘s had a clear position on this?  Do you think she‘s had a clear position?  Voting for the war?

MCAULIFFE:  What I love about Hillary, she says, I can‘t go back, we don‘t have redos.

MATTHEWS:  Look forward.  Say we‘re not going to war in Iran?

MCAULIFFE:  She just said at the DNC meeting the other day.  If the troops are out and I‘m president, the first thing I‘m going to do is bringing the troops home.  Maybe she is a hawk when it comes to protecting our country.

MATTHEWS:  She just went to AIPAC and said whatever is necessary in Iran.  I am taking no options off the table.

MCAULIFFE:  Maybe she is a hawk when it comes to protecting our country.  She agrees we ought to be strong.

MATTHEWS:  Iran is a threat to America?

MCAULIFFE:  We don‘t know but she‘s going to be very tough.  You have to be strong in a post-9/11 world.

MATTHEWS:  Then we‘re going to have a choice between two hawks.

MCAULIFFE:  All she is saying is she‘s going to be strong.  She‘s going to protect America and she will make smart decisions.

MATTHEWS:  Where are the antiwar Democrats going to go?

MCAULIFFE:  You want a smart leader.  You want someone who‘s smart and she‘s smart, and she‘s tough.

MATTHEWS:  You want a choice, not an echo.

MCAULIFFE:  You‘re right we want a choice.

MATTHEWS:  Terry McAuliffe.  Hell of a book, number one everywhere.  This guy has writ an hell of a book.  We can argue Look what he‘s delivered here.  This book has the inside, the color, the greatness.

What‘s coming up, Valentine‘s Day.

Up next, while the Senate points fingers, the House is ready to debate.  How many House Republicans all facing re-election next year, that‘s the deal in the Constitution, will vote against President Bush‘s plans to send more troops to Iraq?

Republican Congressman Eric Cantor of Virginia and Democratic Congressman Steve Israel of New York will be here.  This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

The U.S. House of Representatives is now taking up the fight for the president‘s plan in Iraq.  Will they vote to reject the president‘s course, the surge or will it call for timetable or will they try to actually cut off war funding?

Here now to take up that fight, Democratic Congressman Steve Israel of New York and Republican Congressman Eric Cantor of Virginia.  Congressman, let me ask you Congressman Israel, are you confident there will be a vote next week on the resolution, nonbinding, whether we should be increasing the number of troops over there?

REP. STEVE ISRAEL, (D) NY:  There will be a vote and there‘s going to be a bipartisan vote on a resolution that says two things.  Number one, we emphatically support our troops an number two, we are opposed to a troop increase.  And that‘s going to be bipartisan.

MATTHEWS:  What is the soldier who is going into Baghdad kicking down one door after another, scared to death there is somebody with a gun or a bomb, what is he to think of that resolution?

ISRAEL:  That soldier is going to think that the United States Congress want as different strategy that the strategy this president has put them through.

MATTHEWS:  So he‘s getting killed for a wrong strategy?

ISRAEL:  And that the United States Congress doesn‘t want additional soldiers to go in with the wrong strategy this administration has tried.

MATTHEWS:  Congressman Cantor, what is this soldier going door to door in Baghdad think of this resolution when he reads about it or wherever else he reads about it?

REP. ERIC CANTOR, ® VA:  I agree with your point or your implied point.  I think it‘s very difficult to even fathom that any soldier in the field is going to feel good about what Steve is saying that on the one hand we don‘t support the mission but on the other hand we‘re going to fund the troops.

I think that‘s really a ridiculous position.  At the end of the day I think the policy that will go forward is that this congress will continue to support the mission in Iraq and that‘s a message that we ought to be sending to the soldiers in the field.

ISRAEL:  Well, Chris, we‘re going to have a resolution that he emphatically supports our troops.  In fact it‘s Democrats who have been supporting our troops.  It was a Republican administration that sent troops to Iraq under funded, under equipped.  We‘re going to pass a resolution, spend three days debating that resolution.  It‘s going to be inclusive.  And we‘re going to emphatically .

MATTHEWS:  What will you accomplish with that?

ISRAEL:  We‘re going to accomplish two things.  We‘re not going to allow funding to be cut for the troops in Iraq right now.  We‘re not going to make the mistake Republicans have made with respect to force protection and equipment and we‘re going to send a bipartisan message to the president of the United States that adding 20,000 more troops playing this game of whack mole, being asked to play this game of whack a mole is a bad idea.  We need a better strategy.

MATTHEWS:  Go ahead.

CANTOR:  Chris, let me just step in there.  I‘m glad to hear Steve thinks we‘re going to have a bipartisan resolution, that all is well on the Democrats‘ side of the aisle but the bottom line is Dennis Kucinich is walking around the house as we speak with a letter signed by 70 some of Steve‘s Democrat closing insisting that the language about funding the troops does not or will not be included in the resolution.  So I don‘t think there‘s an agreement.  If it is I don‘t know what that says about the anti-war movement on the other side of the aisle.

So at the end of the day I think I think it‘s a ridiculous position for someone it take to think that the soldiers in the field will respond well when you say you‘re not supporting what they‘re doing but, oh, by the way, we‘ll pay for it.

MATTHEWS:  Let me ask you about this war is—war, this word is being used like it‘s a regular war with an army against another army with the other side, you try to get them to capitulate.  When we got to Berlin, we knew we won the war because the allied forces reached that city and overtook the capital of Nazi Germany and won.  Hitler was dead, the top guys were hanged.  And that was it, we know we won, because the bad guys gave up, they lost.  We know the same thing happened in Japan because of Hiroshima and Nagasaki.

Who has to surrender in Iraq for this war to end?  Congressman Cantor, be specific.  Who is the person who has to sign a surrender document?  Who is this person?

CANTOR:  I think your point is a good one.  We‘re in a new wage war against an enemy unlike that which we‘ve had before.  The enemy—you‘re right.  There‘s a lot of enemies out there.  We‘re in a long-term war with an irreconcilable wing of Islam, number one.  We‘re at war certainly with the Sunni insurgents.  We‘re at war with some of the Shias.  Muqtada al-Sadr.  And certainly, ultimately, the drivers, the funders.  Those providing help and resources in rogue regimes such as that in Tehran.  That‘s who we‘re at war with.

MATTHEWS:  How many wars are we going to have to fight in our lifetime?  You want to go to war with Iran now?

CANTOR:  I‘m not saying we should take anything off the table.

MATTHEWS:  Do you think we should go to war with Iran?

CANTOR:  I don‘t think that‘s responsible for to us take that option off the table right now.

MATTHEWS:  I‘m asking you, do you think we should go to war?  Yes or no?

CANTOR:  I think all options including the military option should be left on the table.

MATTHEWS:  This isn‘t an option question.  This isn‘t multiple choice. 

Right now, February 8, 2007, do you believe we should go to war with Iran?

CANTOR:  I‘ll leave that decision up to the commanders on the ground and those in our military ...

MATTHEWS:  Commanders on the ground whether we go to war with another country?

CANTOR:  I will leave the decisions in the military arena to—this is exactly the point.

MATTHEWS:  This is Barry Goldwater taking.  He used to say that. 

Regional commanders can decide whether we want it use nuclear weapons.  You‘re obviously saying soldiers should decide which country to go to war with.

CANTOR:  I‘m here to say the military experts are those which might come up with the recommendation to the commander in chief that makes the decision.  It is silly for us to expect .

MATTHEWS:  I‘m not talking - I just asked you a very simple question .

CANTOR:  We‘re going 535 commanders in chief .

MATTHEWS:  I‘ve never heard of anything like this in my life.  Never in my life.

ISRAEL:  Congress has a constitutional responsibility to decide whether we‘re going to war or not.  That‘s what we‘re elected to do.  Those are the debates we should have.

CANTOR:  Every president since .

MATTHEWS:  The idea of declaring war as a soldier is unimaginable. 

We‘ll be right back to talk HARDBALL with the two congressmen.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We‘re back with Republican Congressman Eric Cantor to of Virginia and Democratic Congressman Steve Israel of New York.

Let me ask you Congressman Cantor, very clearly, to clear up our discussion, if the U.S. Congress were to discuss tomorrow morning whether to declare war on Iran, would you vote yay?

CANTOR:  This congress is not going to do that because it‘s the commander in chief‘s role, Chris, and Steve knows that as well.  It‘s not Congress that will ask for that.  It is the commander in chief that will make that decision.  Every president whether republican or Republican or Democrat since the War Powers Act was in place has interpreted it as being the commander in chief‘s role to do that.

MATTHEWS:  Would you support the president if he declared war in Iran tomorrow morning?  As things are right now.

CANTOR:  I will support what is in the best interest of securing this homeland and providing our troops with what they need and if there is a threat on the ground in Iraq and in the region that our troops need us, I will support them and that‘s exactly the point on this Iraqi resolution because the Democrats want to have their cake and eat it, too.  This is a nonbinding resolution.  It‘s a sense of Congress.  It doesn‘t mean anything.  In fact it pollutes the message and sends the wrong message to our troops.

MATTHEWS:  Congressman Israel, what‘s the role of Congress in war and peace?

ISRAEL:  Congress under the Constitution of the United States authorizes war.  The War Powers Act requires Congress to vote on whether we should insert troops into hostile situations.  The law is clear.

CANTOR:  Absolutely not.

ISRAEL:  Come on, Eric.

CANTOR:  As a commander in chief the constitution gives .

MATTHEWS:  Congressman Cantor, why did the president ask for approval of Congress before he went to Iraq?

CANTOR:  I certainly think his counsel gave him guidance why he need to do that but the Constitution gives the commander in chief the right to send our troops into battle.

MATTHEWS:  Maybe when it comes to war we don‘t need a Congress according to that.  Thank you very much Congressman Cantor, thank you Congressman Israel.  COUNTDOWN starts now.

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

END   

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