updated 3/8/2007 11:15:41 AM ET 2007-03-08T16:15:41

Guests: Josephine Hearn, Richard Wolffe, Ron Schatz

TUCKER CARLSON, MSNBC HOST:  Welcome to the 6:00 p.m. edition of our show.  Is the day after Christmas for critics of the Bush administration.  Time to assess the results of the much anticipated day of delivery, the Scooter Libby verdict.  The adrenaline of conclusion has been replaced by sober assessment.  What was all worth to the president‘s critics?  Will Bush pardon Scooter Libby?  How will the verdict affect Dick Cheney?  What about Republicans running for president next year?

We‘ll measure the trial‘s past and its future, plus John McCain and the Walter Reed scandal in the always entertaining list of this year‘s most wasteful federal pork projects.

But first, a sobering reminder that there are still people out there who wish us ill and who are willing to do something about it.  Authorities in Los Angeles stopped an Iraqi man at LAX yesterday and discovered a magnet with wires attached hidden in his rectum.  Maybe it was an elaborate fetish, or maybe it was a dry run for a future terror attack.  We do not know.

But we do know there are many people would like to bring about another 9/11.  So what are we doing about it?  The latest idea for the Democratic Congress?  Unionize the airport screeners.  Democrats argue that TSA employees have a right to collective bargaining, and maybe they do.  OK.

But that is not the question.  The question is will unionized screeners make air travel safer?  Let‘s see.  How teachers‘ unions made the schools better?  Have government employee unions improved the service at the DMV?  As the head of the TSA explained to the Senate this week, a unionized work force at the airport will have a quote, “serious negative security impact.”

Well, that‘s it.  That‘s all you need to know about this question.  If Democrats continue to press for unions at the airport, you‘ll know they just do not care.

With analysis of the Libby verdict, the ongoing Walter Reed scandal, Hillary Clinton‘s appeal to women as well as the rest of today‘s news, we welcome the Politico‘s Josephine Hearn and “Newsweek‘s” senior White House correspondent Richard Wolffe.  Welcome to you both.

JOSEPHINE HEARN, THE POLITICO:  Thank you.

CARLSON:  I‘m going to put up something I don‘t think I have ever done before, today‘s “New York Times” editorial.  The lead one about Scooter Libby.  This is the final line and I think it says a lot.

Quote, “It was a breath of fresh air to see someone in this administration which specializes in secrecy, prevari - prevari -“ you know what I mean, lying, “and evading blame, finally called to account.”

What strikes me is, Richard, Scooter Libby was actually not called to account for that or for anything really directly having to do with the Iraq War and neither was the administration.  This is something of a hollow victory for opponents of the war, it seems to me.  Or is it?

RICHARD WOLFFE, “NEWSWEEK”:  Well, I don‘t think you can dismiss or downplay the significance of a guilty verdict in perjury and obstruction of justice.  But it was a limited trial.  Absolutely was limited.

The question is why did Scooter Libby take such extreme steps to defend his bosses?

CARLSON:  Right.

WOLFFE:  Both Bush and Cheney.

And the answer is, it was not just about 16 words as people have tried to minimize it.  He was a leading voice, if not the leading voice in the bureaucracy in the run-up to war.  The whole case for the war.  He is the guy who came up with the script that Colin Powell was to deliver at the UN.  He was a key lynchpin at getting bad intelligence into the mainstream, into the bloodstream of this administration.

So is it minor?  I don‘t think is.  It actually gets right to the heart of the case.

CARLSON:  It is a series of felony convictions.  And there is no minimizing that.  Those are bad.  Period.  And Scooter Libby apparently lied, and that is bad.  However, the Bush administration has never to this day really had to explain why and how it went to war.  And on a bunch of questions, Josie Hearn, we don‘t know actually.

HEARN:  That‘s right.

CARLSON:  My question to you is, will Democrats find out?  They have subpoena power.  They could open up a series of hearings to really get the answers.  Are they going to?

HEARN:  I think they will.  I think it is part of the political fallout of this.  One thing you noticed yesterday was the one juror who spoke to the press, Denis Collins.  He said that they had seen Libby as a fall guy in this.  I think that gives Democrats cover to go and say if Libby is the fall guy, who is really the person that is to blame?

CARLSON:  There is really an appetite for that?  I don‘t cover the Hill, you do.  But I don‘t see—if there is an appetite, who is coming from?  There really are Democrats in the leadership who would like to open a yearlong investigation into exactly where we went into Iraq?

HEARN:  I don‘t think there is a yearlong investigation there, but they are poised to use their subpoena power in ways they have not before.  They have only have it for what, two months right now, and this is an area that they have wanted to investigate for basically four years.  Basically back on these claims were made in 2002.  So I think there is certainly an appetite.  I don‘t think anyone has come to the fore.  I don‘t think it has yet has been vetted by leadership as far as whether they do want to proceed down that path, but I think there is certainly an appetite.  Especially among the liberal members caucus, the out of Iraq caucus.  These are people basically who voted against the war in 2002 and have been denouncing it for four years.

CARLSON:  I must say, I‘m hardly a liberal activist.

WOLFFE:  Really?

CARLSON:  Really a conservative.

I have a lot of questions.  I want to know who forged that memo, the Niger memo, for instance.  There are a lot of questions I want answered and I hope they answer them.

The element of this that has not been, I don‘t think, hashed out in public quite enough, Richard, is the effect of this case on the press and press freedom and the ability of reporters to talk to their sources.

An interesting quote today from Bob Zelnick, a longtime ABC News guy who said today, he said, because of this trial, quote, “It is going to take a long time for reporters and their sources to figure out how to deal with each other in a way that doesn‘t risk contempt citations and imprisonment.”

This case would seem and Fitzgerald‘s imprisoning of Judy Miller for 85 days would seem to have a profound chilling affect on journalism, but journalists seems to be cheering this on.  Why is that?

WOLFFE:  Well, in my experience, journalist‘s relationships with their sources are individual things.  Nobody talks to you saying, well, here are the lists of journalistic ethics and here are the rules of the administration and let‘s put the two together and sort of have a legal agreement about how we talk.  It is a relationship thing.  At least the best working relationships you have are like that.

CARLSON:  Of course.

WOLFFE:  I think this undermines in general, undermines the idea that you could have anything like an off the record conversation.

CARLSON:  Right.  Exactly.

WOLFFE:  Certainly moving into a campaign season, I hear a lot of campaign people saying there is no such thing as off the record.  Everything is on the record now.  Yeah, up to a point with people you don‘t know, that is true.  But let‘s just be clear here, journalists and sources do not enter into these kinds of sensitive conversations thinking there may be a prosecutor out there.  We‘d better watch out.  We‘d better talk to our lawyers first.

As soon as that happens, you are not having a real discussion.

CARLSON:  It seems to me that would be part of effect—the long-term effect of this case.  Josie, I mean you are a journalist and live in a world full of them.  I again have been struck by how few reporters I know are upset by the fact Judy Miller did 85 days for not wanting to talk about a confidential conversation.

Do you know other people who are upset about it or they don‘t care?

HEARN:  I think people were upset when it happened.  Some were, to some extent, but really it is this sense among both sources and reporters that it will never happen to me.  That‘s the feeling.

CARLSON:  Isn‘t that an important principle worth defending?  What about all these stupid journalism organizations that are standing up for reporters?  You know what I mean?  Where are they?

HEARN:  I think they are pushing for things like a federal shield law.  In fact you saw members on the House floor today calling for something like that.  We may see something like that, but still, I think there is a sense that this was such an anomaly.  Hopefully it won‘t be repeated.  Some sources joked with me back when Judy Miller went to prison, she—would you go to prison for me, before they would say something.

But I do not get the sense that it hangs over the discussions now.  And I cannot tell you why that is exactly except a feeling that this happened once.  We do not know when it will happen again.

CARLSON:  It seems to me people did not like Judy Miller‘s politics.  They imagine she was a pawn of the White House and maybe she was.  I don‘t know.  But because of that, they did not stand up for one of their own and it was kind of distressing to me.

WOLFFE:  I heard a lot of people saying journalists should not have to give up their notes, should not have to give up their sources and certainly shouldn‘t go to prison.  Did personal feelings about Judy Miller or any of these people taint how journalists approached this?  Maybe.  But as a matter of principle, I know a lot of reporters who are very uncomfortable .

CARLSON:  Good, I hope so.  Because I think what reporters do is vital.  The government has secrets for a bunch of different reasons it does not want us to know about and I think we have an interest in knowing them and reporters are the way we know them and we need to preserve that.

Coming up.  For the most part, Dick Cheney doesn‘t care what you think of him at all.  But will the Scooter Libby trial and guilty verdict may penetrate his steel-reinforced, hermetically-sealed interior and change the way he does his job or change the way the president sees him.  We‘ll tell you.

Plus, President Bush takes steps to repair the broken healthcare system for America‘s wounded war veterans.  Was the problem his making and how fast can real change happen?

The latest on the Walter Reed scandal just ahead.

(COMMERCIAL BREAK)

CARLSON:  The Scooter Libby trial was richer in its political drama that was in its legal intricacies.  What defenders of Libby are calling a miscarriage of justice administration critics see it as an unprecedented window on the ruthless doings of a warmongering administration run amok.  So which one is it?  Joining me now with his view of the case the day after is the host of HARDBALL WITH CHRIS MATTHEWS, Chris Matthews.

CHRIS MATTHEWS, MSNBC HOST:  I think you sized it up.  I really do think.

CARLSON:  Well, does it end here?

MATTHEWS:  There are two sides here.  Without taking sides, you can see that there are two sides to this.  The very people who are now beating the drum for a pardon are the people who agree with Scooter Libby on the war and everything else.  This is an ideological struggle.

And just like in the classic case of the Alger Hiss case back in the ‘50s, the issue of perjury is sort of like one of the weapons in this case.  We caught you perjuring and we are going to nail you, but the fight is over the war.

CARLSON:  The fight is over the war.

MATTHEWS:  Sure.

CARLSON:  But the fight is in this venue over the leak and Valerie Plame and Scooter Libby, it is over.  It goes no further than it did yesterday, does it?

MATTHEWS:  Well, I just think if you look at it, the directions, the finger-pointing that went on at the end of the prosecutor was right at the vice-president.  This was not like this is the end, this was like, I wish it could go further.  This is where the case goes to.  It goes to the guy who was giving instructions.  It seems to me there were about three levels of cover-up.  There was the perjury, that‘s now established against the law and he will be punished for it.  There was the leak itself.  We have now read a lot about how that occurred.  The leak was basically to cover up the faulty intel.  And the faulty intel itself and the war.  So you have three levels of it.  If you get a pardon now, that is another layer of cover-up.

CARLSON:  Quickly, does the leak story and here?  We know who did it, Richard Armitage .

MATTHEWS:  He was not the only one who leaked.  Certainly Scooter was out there pushing this story, too.

CARLSON:  Right.  But we believe Armitage was the first so he‘s the one - nobody cares?

MATTHEWS:  I think whether the administration had an effort to debunk a war critic is the question here and then of course why were they trying to debunk somebody?

Why was the hullabaloo all about?  That was the question raised by the prosecutor.  What was all the hullabaloo?  Why did Cheney go to the mattresses with his chief of staff?  What were they trying to put down?  What was so scary about this middle level person, this Joe Wilson that made them do everything they did to try to destroy his credibility?  What was their biggest fear here?  Their biggest fear, of course, was his accusation that we had an unfounded war.  A war of aggression, not a war of defense.  And a war of aggression, by the way, is a war crime.

CARLSON:  What about a pardon politically?  You even heard one of the jurors .

MATTHEWS:  This is a new story for me.  Turning the page .

CARLSON:  Did you see Denis Collins today, the former “Post” reporter? 

He said you know what, I would be perfectly in favor of a pardon.

MATTHEWS:  The problem you had the verdict that came out during the Jerry Ford obituaries.  If you except a pardon, you accept guilt.  Will Scooter Libby accept guilt?  He might.  He might say I‘d rather get this over with.

CARLSON:  He‘s got two little kids, yeah.

MATTHEWS:  Will a pardon be seen as part of a cover-up, another layer of cover-up if there is negotiations implicitly going on now between Fitzgerald and the convicted felon?  Because clearly the issue of sentencing lies ahead.  He made it pretty clear and the verdict the other day that Fitzgerald said, look, I want to talk to this guy more if he wants to add something to this case.  Clearly, he is opening himself up to possible negotiation of a flip.  The vice president told me to do it.  Oh, you only get three months at Allenwood and you play tennis the whole time and get a tan as opposed to getting hard time in Leavenworth for six years.

That is in process right now.

CARLSON:  But that would imply that the prosecutor would take that information and use it to indict Dick Cheney or some other superior.

MATTHEWS:  Or whatever his purposes were.

CARLSON:  He would have to have a legal purpose for that, wouldn‘t he? 

He couldn‘t just say I am interested in what happened.

MATTHEWS:  I don‘t know that.  I just don‘t know.  Maybe it could be that he just wanted the information for further probing.

CARLSON:  Huh.

MATTHEWS:  You know, it‘s possible.  The other thing is the question of doing now.  If he does not pardon him within the next year, Scooter is going to jail.  So it seems odd to pardon a guy after he is already in prison.

I don‘t subscribe to the conventional wisdom that Bush‘s only option here, plausible option, is to wait until midnight of his last day as president.  Because by then, Scooter will have been in federal prison for a year.  I‘m not sure that would be a very satisfactory—If you‘re going to pardon a guy, don‘t send him to prison for a year.

In other words, once you decide to pardoning person, would you let him go to federal prison for a year?

CARLSON:  Because people want to hurt your party in presidential elections.

MATTHEWS:  Could be.  Could be.

CARLSON:  Since we both live here and are paying very close attention to this case, it may be hard to answer this question.  What is your sense about the rest of the country?  Would a pardon by President Bush, would people even notice a pardon and?  Do they know who Scooter Libby is?

MATTHEWS:        It is possible that people running for the nomination like Rudy Giuliani and Mitt Romney and of course McCain are all running so far away from the president that by the time next year comes around they do not have to depend what Bush did.  They can basically say we wouldn‘t have done it.

I am not sure they are going to pay the price for this.

CARLSON:  That‘s a good point.

MATTHEWS:  I personally think he is going - predictions like this are dangerous.  I think he is going to pardon him fairly soon.  But I don‘t know.  I think if he is going to do the right thing, he would do it now.  Why would you decide to do the right thing by this guy?  He did not steal any money.

CARLSON:  Keep in mind he did not fired Donald Rumsfeld until after the midterm election.

MATTHEWS:  Let me try to say one point.

It wasn‘t like the guy went out and robbed the gas station at night or robbed some money.  He was operating generally in the line of duty.  Generally in the line of duty.  He may have gotten out of line or something, but basically he was doing what he was supposed to be doing, which was protecting the interests of his boss.

It seems to me this would be inappropriate time .

CARLSON:  I tend agree with that.  Chris Matthews.  HARDBALL.  Thank you.

Coming up, John McCain steps up and accepts responsibility for the deplorable mess at Walter Reed.  It may buttress his reputation as a stand up guy but exactly how could he be held accountable, if at all?

Plus, the one thing the Walter Reed scandal, the Scooter Libby trial, new poll numbers and budget deficits all have in common is the war in Iraq.  Democrats say they have a plan to end that war.  They used to say that anyway.  What is the status these days?  We will tell you in a minute.  Stick around.

(COMMERCIAL BREAK)

CARLSON:  Four months to the day since its election, the 110 Congress has done almost nothing to alter the course of the increasingly frustrating war in Iraq.  We saw dozens more deaths just today.

House Democratic leadership, namely Nancy Pelosi, the speaker, must balance the party‘s moderates and its influential left wing, which wants out now.  The leadership may be poised with a new strategy: separate the issue of a withdraw timetable from the issue of a cut in war funding.

Here to discuss the very latest on what the Democrats are going to do in Iraq, The Politico‘s Josephine Hearn and “Newsweek” senior White House correspondent Richard Wolffe.

So, Josephine, this is obviously a terrible—this is a terrible quandary for the Democrats, and I actually feel for them, because I‘m not sure what I would do, this is such a difficult situation.  But they did run on Iraq.  The left wing of the party never supported the war in the first place.  They have no ties to it whatsoever.

Can Pelosi withstand pressure from the ‘”Out of Iraq Now” caucus and not tie funding to withdraw?

HEARN:  It‘s going to be very tough.  And there are about 50 to 75 Democrats right now in the House who are pushing for that date certain for withdrawal. 

CARLSON:  Right.

HEARN:  They want something next year, preferably earlier, but it could be at the end of the year.  It‘s unclear whether they are going to tie that to the supplemental spending bill.  This is the president‘s $100 billion request to fund the wars in Iraq and Afghanistan.

Congress has to pass it.  The issue is whether it‘s going to include that date certain for a withdrawal. 

Right now it looks like it‘s maybe trending towards not including that, and instead they‘re going to put in the readiness standards that we‘ve been hearing about, where all the troops that go over have to meet a certain standard as far as training and equipment and rest between deployments.  But it really is one of her—I mean, it will be, I think, her biggest test yet, is whether she can muster the votes for this, because there are so many liberals who say, yes, we got the message in November.  The message is that voters want troops out of Iraq now, and we can‘t vote for additional funding for the war without having some date in there.

It‘s going to be real tough.

CARLSON:  Well, it‘s interesting.  Speaking of liberals, two of the most liberal, Maxine Waters and Barbara Lee—I think Barbara Lee was the only member in the House not to vote for the war in Afghanistan.  That‘s how far out she is.  But they make, actually, I think, a pretty good point.

They said to Nancy Pelosi, their speaker, if we vote to fund this war, we‘re implicated in the war.  We have ownership of it.  I mean, to some extent, it‘s our war, we are giving it our stamp of approval. 

There are some members, these two, but there are, I think, many others, who just won‘t be moved on this issue. 

RICHARD WOLFFE, “NEWSWEEK”:  Sure.  And look, the White House is

enjoying that spectacle.  Think they that are co-opting the Democrats to

some degree in the war by having them take some sort of leadership position

being more responsible, not just attacking the war...

CARLSON:  Right.

WOLFFE:  ... but having to fund it, too.

Having said that, this is token politics, because it‘s never going to get through the Senate.  I mean, they couldn‘t get the non-binding resolution through the Senate.

CARLSON:  Right.

WOLFFE:  So this is a token gesture for the base.  What do you have to throw to the base to say, we hear you, we‘re with you, but ultimately the president has got to control this war?  That‘s the line she has to define.

CARLSON:  But as a political matter, I think it may be more significant than that.  You look at the problem Hillary Clinton has had, John Kerry had last time because they voted for something—it looked like a vote for war to me, but they‘ve argued it isn‘t—in any case, they appeared to vote for war, and they‘ve spent the last four years explaining the vote. 

Don‘t you think it‘s going to be a little tougher for liberals in the House to attack the Bush administration‘s, you know, invasion in Iraq if they are o record supporting its funding? 

WOLFFE:  No, I don‘t, actually.  I mean, I think times have changed.  Election politics have changed.  And the questions that John Kerry faced in 2004 are the kinds of difficult quandaries that Republicans are going to face in 2008. 

You can still hold the ground as a Democrat and say, we‘ve got to fund the troops, we‘ve got to protect the troops, and say, I oppose the war.  It‘s not that difficult.  The onus is really on Republicans to say how they‘re going to get out.  That‘s where the Democrats need to keep...

(CROSSTALK)

CARLSON:  Oh, definitely.  No, no.  They don‘t want any ownership of this at all.

Josephine, where is Nancy Pelosi personally on this, do you know?  I mean, she is adamantly against the war, she‘s been against it since the very beginning.  And now she‘s taking, in effect, the conservative side of this argument.

Why is that?  And is that a reflection of how she feels?

HEARN:  I think that‘s a reflection of her leadership role.  She knows that she‘s speaker of the House.  She‘s not just speaker of San Francisco. 

She, I think, personally is very sympathetic to Jack Murtha and to his calls for getting troops out of there as soon as possible, but she realizes that she has 233 Democrats and 435 all together.  And I think she knows that she can‘t—she can‘t take that tact. 

I mean, her district is way, way to the left of basically almost every other district in the country.  And so I think she knows.

And we‘ve seen her actually on a number of issues taking this kind of moderate tact.  Because their first priority is protecting these majority-makers.

CARLSON:  Of course.

HEARN:  You know, the 40-some new House Democrats.  And they know that most of these guys represent fairly conservative districts, southern districts, rural districts.  And so they‘re really crafting this to make it safe for them.  Now, they may have to toss the progressives overboard, but...

CARLSON:  Boy, it‘s tough.  Well, sure, because Maxine Waters will be elected long after she dies.  You know?  But Heath Shuler might not be.  And it‘s tough to have a party with both  Maxine Waters and Heath Shuler.

Coming up, as the ranking Republican on the Armed Services Committee, John McCain publicly accepts responsibility for conditions at Walter Reed Army Hospital.  He appears to mean what he says, but is he truly prepared to be held accountable for the disastrous treatment of wounded American soldiers?

Plus, Hillary Clinton is the first viable female candidate in American history.  That doesn‘t mean women are going to vote for her, though. 

Up next the very latest on Hillary‘s effort to be the woman‘s woman.

(COMMERCIAL BREAK)

(MARKET REPORT)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I am concerned that our soldiers and their families are not getting the treatment that they deserve, having volunteered to defend our country.  Any report of medical neglect will be taken seriously by this administration, and I‘m confident by the Congress, and we will address problems quickly.

(END VIDEO CLIP)

CARLSON:  President Bush appointed former Senator Bob Dole of Kansas, who was wounded in World War II, and former Health and Human Services Secretary Donna Shalala to head commission to investigate the treatment of wounded Iraq war veterans.  So who is to blame for the failed military health care system and what can be done about it, and how could this scandal effect American‘s view of the war? 

We are once again joined by the Politico‘s Josephine Hearn, and “Newsweek‘s” senior White House correspondent Richard Wolffe.  This is what John McCain says yesterday—he is on the Armed Services Committee.  He said, quote, “I will take responsibility for being a member of the Armed Services Committee and not knowing about it and not doing anything about it.  I apologize for my behavior.  I should be held accountable.”

Kind of impressive in a way, but what does that mean exactly?

WOLFFE:  Not a whole lot.  I mean, look, people have been talking about these kinds of bureaucratic delays that a lot of these veterans are getting, the VA shortfalls.  Certainly John Kerry was talking about it in 2004, and nobody wanted to listen to that kind of stuff.  The V.A. system is not uniform.  It‘s complex.  It‘s sprawling.  Some of the health care is great, some of the people are clearly falling through the cracks. 

People didn‘t know about Walter Reed, but five years into the war, to have this kind of review to figure out what‘s going on seems like very, very late in the game.

CARLSON:  It does seem very late in the game.  But it also—it‘s one of those stories that was inevitable, wasn‘t it?  I mean, who didn‘t know that the V.A. was a disaster, particularly in some places. 

HEARN:  Well, It was in the outpatient side of things, not the in patient side of things, but McCain was a member of the Armed Services Committee.  Many senators, many members of the House went to Walter Reed countless times—I‘m sure McCain did—to visit the soldiers there.  So I am sure he‘ll come under scrutiny for having been there so many times and never having seen thing or never having raised the alarm. 

So I think this apology gets him out early.  He is heading off the criticism by saying, I‘m already apologizing for it, and putting it to bed, to the extent that he can, because being a member of the Armed Services Committee, I‘m sure he will come under some scrutiny.

CARLSON:  I wonder—I think you‘re right about that.  But for it‘s overall effect, I hate even to say this, because I think this is an actual scandal, unlike so many that we talk about.  This is real.  I am not convinced this is as politically devastating as it might to be.  Is the public paying attention?  Do we have poll numbers that show the White House is being hurt by this? 

WOLFFE:  Well, they are certainly behaving like they‘re hurt by it.

CARLSON:  As they should be. 

WOLFFE:  And yes, on the one hand, you have to give them credit for reacting quickly to this.  On the other hand, these are people who like to campaign in front of the troops.  It‘s very hard to do that when you have this story.  It‘s a very easy story to understand.  People who are wounded should be treated with the best care possible and clearly these outpatients, especially, some of the people in rural areas are not getting the specialist care they need.  And for a long time people just said, you know what, that‘s just a fact of life.  It‘s the way it happens.  It‘s part of the system. 

That‘s not really acceptable when you‘re asking—

CARLSON:  It‘s more than not really—It‘s totally unacceptable, and I‘m in no way defending it.  I think it‘s appalling.  And I agree with you, it hits this administration particularly hard because this is their signature issue, the troops.  My only question is a practical political one, and it‘s again, maybe you know Josephine, do we have numbers that somehow—after Katrina, a series of polls indicated the president‘s competence came into question in the minds of many Americans.  Does he know what he‘s doing?  Have we seen any similar drop in his numbers, or the Republican party‘s numbers after this scandal?

HEARN:  It may be too seen to see any numbers right now.  But I think this is the same war where we did not see images of the caskets coming back from Iraq.  And now we are seeing images, for example, of the wounded soldier who had the eye patch, who was testifying the other day.  That‘s quite a different set of imagery.  That‘s clearly somebody who has been seriously wounded.  We have tales of terrible care.  I mean, it‘s really a marked change in terms of what the public is seeing, as far as casualties from Iraq.  I would find it hard to believe that they would not react to that. 

CARLSON:  We‘re talking about graphic images.  I want to put on the screen a particularly graphic image.  I want to warn some of the younger viewers, you know, avert your eyes.  Hillary Clinton went to “Emily‘s List” the other day.  “Emily‘s List” is an abortion rights group.  It‘s mostly supporting female candidates.  They showed a video for Hillary Clinton, to welcome her.  I want to play a clip from this.  Here it is, as I warned, graphic.

(BEGIN VIDEO CLIP) 

UNIDENTIFIED MALE:  The wind will blow perhaps a bit harder that day.  The crowd will quiet, a hand will rise and just as those who have come before, a new commander in chief will take the oath.  But this time, for the very first time in American history, the words will be spoken, Madame president. 

“Emily‘s List,” where history is made. 

(END VIDEO CLIP)

CARLSON:  That‘s the future.  Here‘s my question.  Let me ask this of you Josie Hearn, does the explicit appeal to her femaleness work for Hillary Clinton?  Can she run a campaign as a feminist? 

HEARN:  I think she has to try.  I think 54 percent of voters in 2004 were women.  She obviously can‘t ignore that.  Obviously, she is the only woman candidate running now.  I don‘t see how she does this without making an appeal to women.  You also see that she recently lost a lot of the black voters.  There‘s some polls recently show that they were shifting to Obama.  So we‘re seeing some identity politics being worked out right now.  She does have strong support among younger women and single women.  I can‘t see how she doesn‘t play that up. 

CARLSON:  If you are a singer woman with a master‘s degree, you are voting Democratic and you are probably voting for Hillary Clinton.  But I would be interested to see her numbers among married women.  I bet they‘re not high.  Here‘s part of what they‘re doing about it, Richard.  They are starting—the Hillary Clinton campaign opening a web site, ICanBePresident.com.  And it‘s a site aimed at girls, and the idea is to convinces them that you can be like Hillary and grow up to be a presidential contender. 

It strikes me, as the father of three girls, as almost like a 1970‘s, or even 1950‘s idea.  I don‘t know.  I don‘t think there‘s an eight year old girl in America who assumes she can‘t be president.  I mean, it seems so retro to me.  Or am I just in my own world?

WOLFFE:  Well, it‘s certainly one of those barriers that are yet to be crossed and there‘s a certain excitement out there about that.  Having said that, Obama has changed the whole excitement factor about breaking barriers.  Because it‘s clearly a more real taboo, as it were, a more real barrier to cross.  This is very much the sort of game plan they had before he got into the field.  And look, there‘s a lot of polling out there that shows women voters do respond to a generic woman candidate at the top of a major ticket. 

The problem is that Hillary is not generic.  She is anything but.  People know who she is.  They have ascribed all sorts of values to her that go beyond her just as a woman.  And that‘s the hard thing.  Can she be every woman and Hillary Clinton at the same time?

CARLSON:  I don‘t think so.  This idea, she bragged yesterday that she is going to bring back the Paycheck Fairness Act, you know, gender equity and the federal government requiring people to pay the sexes the same amount.  And I just thought, is she going to stump for the ERA too?  It seems so much yesterday‘s issue.  Quick, can you be honest, I know we‘re on television, but of the women you know, how many who are going to vote Democrat, how many are for Hillary and how many for Obama. 

HEARN:  I think you‘re right. 

CARLSON:  In my implication that they‘re all for Obama and not for Hillary?  

HEARN:  Well, I would agree that Obama is more the breaking barriers candidate right now.  And I think younger women, yes they are supporting her, but with younger women, you are right in the sense that there‘s less of an affinity for those feminist ideals, you know, for breaking barriers.  It‘s already been done.  But, on the other hand, there has been no woman president and it would be nice, I think, to have one. 

CARLSON:  Yes, or to have a good female candidate for president.  That would be great too.  Speaking of Obama, quickly, the “New York Times” front page story about his investments.  It turns the senator, soon after he became senator, invested in two fairly obscure companies with, very generally, business before the Senate.  Here‘s what‘s interesting to me.  He didn‘t make a lot of money off one.  He lost money on the other.  Here‘s what I was struck by:  a spokesman for Mr. Obama said yesterday the senator did not know he had invested in either company and when he learned of it, he decided to sell his stocks. 

What are the odds that Obama is going to invest in two companies with business before the Senate and not know about it?  This is not GE and Ford.  These are little companies.

WOLFFE:  It‘s a blind trust, number one.  Secondly, check with your folks at CNBC.  AVI Biofarmer, which is one of these companies, may not be a name we know, but it was a hot stock because of Avian Flu.  Everyone was talking about it.  So, not such a great pick and not such a surprising pick, a dumb investment on his part.  He lost money on it.  But it‘s a blind trust and, honestly, he got rid of it as soon as it came to his attention. 

CARLSON:  That‘s true, and, you know what, I‘m not saying he did anything crooked.  I‘m not even implying it.  And I thought the Times story actually should have cut him a bigger break than it did.  But do you agree with that, that it‘s plausible that you can invest in these two companies that I had never heard of.  The other one seemed fairly obscure, and not—just by chance? 

HEARN:  To me, reading it, and I don‘t have the financial knowledge, but to me, reading it, I got the same sense.  I thought how does the broker, just out of thin air, come up with these two companies that have strong ties to Obama.  It seems odd.  On the other hand, he has said straight up that he didn‘t know about it and in fact, what‘s so ironic about this is that they were apparently setting up the blind trust in order to, as many members do, in order to avoid these ethical problems.  And yet that was exactly what got him into the issue.  I mean, maybe if he had seen these early on , he would have been able to nix them. 

CARLSON:  Right, it‘s not like they were cattle futures or something like.  Josephine Hearn, Richard Wolffe, thank you.

Coming up, remember the bridge to nowhere in the state of Alaska, the one that cost tax payers a couple hundred million bucks and connected two empty spaces?  Well, it‘s time again to roll out this year‘s list of outrageous government waste.  Stay tuned and get ready to write your thieving elected officials an angry letter.

Plus, Barack Obama‘s other weaknesses revealed.  There are ways to quit smoking cigarettes.  But what is a man to do with an infatuation with one of America‘s hottest singing stars?  MSNBC‘s chief school boy crush correspondent Willie Geist has the important details on that developing story.  We‘ll be right back. 

(COMMERCIAL BREAK)

CARLSON:  With the possible exceptions of “American Idol” voting and the super bowl spread, nothing makes for better water cooler conversation every year than the annual assessment of ridiculous government spending projects.  You know the ones, the million dollar studies of mating habits of rare birds, or snail guarders.  Last year‘s infamous bridge to nowhere in Alaska.  The sweet outrage that would make us left if it were not paid for with the difference between our official salaries and the chump change we actually get to take home, known as taxes. 

Here with the highlights of this year‘s report is Tom Schatz, president of Citizens Against Government Waste and editor of this year‘s “Pig Book.”  Tom thanks for coming on.  An annual ritual, always glad to see you.  Let‘s get right to it.  Five million, five hundred thousand dollars for the Gallo study to study the effects of alcohol, Gallo as in wine, funded by DOD, the Department of Defense, the Pentagon, what is this, why? 

RON SCHATZ, CITIZENS AGAINST GOVERNMENT WASTE:  This has nothing to do with defense.  It is funded through the University of California in San Francisco.  And we don‘t know why.  It‘s been in there for several years, more than 28 million for this project, and there‘s nothing we find that has any relationship to national security. 

CARLSON:  Do they drink Gallo wine during the study?

SCHATZ:  Possible.  That may be how they‘re getting the effects of alcohal on the brain figured out. 

CARLSON:  Patty Murray, senator from Washington State, appropriated 1.6 million dollars for a study to improve the shelf life of vegetables. 

SCHATZ:  She served this one up to Arcadia Bio-Sciences in Seattle, a local company that‘s engaged in the study of vegetables.  I‘m not quite sure why or how it is going to help our troops out in the field, whether they get better or fresher cantelope or strawberry.  I know my father survived the Battle of the Bulge on K rations.  So things have probably improved since then, but this is really not a defense project.

CARLSON:  One point three million for the study of obesity in the military research program.  Would not the answer just be exercise? 

SCHATZ:  Basic training, yes.  

CARLSON:  OK.

SCHATZ:  That‘s it, simple. 

CARLSON:  Fifty nine million dollars for medical research projects ranging from cancer to diabetes to gynecological disease.  There is no mention of why these programs are getting money from the Department of Defense, as worthy as they sound.  Why is DOD getting 59 million bucks to study diseases like this?

SCHATZ:  We have the National Institutes of Health.  We have private sector research.  This has been going on for years.  And, of course, there is some research that is probably helpful for specific injuries to the military, but this is much more wide spread.  Diabetes is not necessarily caused by war or anything related to the military.  There are programs to deal with that.  It‘s just more money being thrown into the Department of Defense.

CARLSON:  A million dollars for a telescope that is used to look for flying saucers in California.  Is this a Dennis Kucinitch project, or where did this come from?

SCHATZ:  There‘s lots of talk about aliens, but no one was thinking we‘d be attacked from outer space.  And how DOD will defend that, we‘re not quite sure. 

CARLSON:  And that‘s literally what it‘s for.  You‘re not just being mean.

SCHATZ:  Oh no.  It‘s SETI, Search for Extra-Terrestrial Intelligence, the subject of several movies, a wonderful project.  This is the Allen, as in Paul Allen, Telescope Array.  So this is not some kind of poor little sister.  This is something that could be funded by the private sector.

CARLSON:  Four million five hundred for a bandage that utilizes shrimp heads as part of the bandage?  Is this one of those ideas that sounds stupid, but is actually brilliant, and we ought to be funding?

SCHATZ:  Not quite sure.  It‘s being done in the state of Hawaii.  The senator brought home about 320 million dollars in pork through the defense bill, has already defended it, of course.  Senator Stephens, by the way, was second in defense.  And I know we‘re going to talk about one of his projects.  He got 210 million, about 125 percent increase over last year. 

CARLSON:  Unbelievable, and finally, that Senator Stevens project you mentioned, four million dollars for something called the Northern Line Extension, which is a road between literally the North Pole, population 1,700 people, and Delta Junction, population 840 people, 82 miles long.  Why is the federal government paving a road to the North Pole? 

SCHATZ:  It‘s a railroad.  There are roads there already.  It‘s some defense installations along the way, but of course it really benefits the whole population.  It‘s not something that the Department of Defense asked for and Senator Stephens has sunk tens of millions of dollars into the Alaska railroad at our expense over the years. 

CARLSON:  What a shame, and he‘s a liberal Democrat?  Right?

SCHATZ:  No, he‘s a good Republican.   

CARLSON:  The Irony, Tom.  Can you say that again?  He‘s a Democrat?

SCHATZ:  He‘s a Republican. 

CARLSON:  He‘s a Republican. 

SCHATZ:  And, of course, people say one of the reasons they have lost control is all of this pork.

CARLSON:  Well, I think whoever says that is absolutely right.  Tom Schatz, Citizens Against Government Waste, wearing the tie, the pig tie.  Good for you.  See you next year. 

He‘s soon-to-the most powerful man in the world, but even Barack Obama is reduced to a studdering, autograph seeking fool when he meets Beyonce.  Willie Geist has details of their run in when we come back.

(COMMERCIAL BREAK)

CARLSON:  Welcome back.  When you are down and troubled and you need a helping hand, you can go running to Willie Geist.  We do every day.  Here he is. 

WILLIE GEIST, MSNBC CORRESPONDENT:  I won‘t be much help.  Trust me.  That‘s a problem.  Tucker, I bought one of those Mega Millions Lottery tickets yesterday.  It was the first time I have ever played the lottery.  But it was 390 million dollars. 

CARLSON:  Wait—

GEIST:  What?

CARLSON:  That‘s the first time you—I have personally seen you walking out of a Package Store with a lotto ticket, a 40 malt liquor and a pack of Newports.  It‘s not your first time. 

GEIST:  OK, a little Old English never hurt anybody Tucker.  But we have identified one of the two winners, and it was in the state of New Jersey.  Unfortunately it was not me.  A guy named Richard Wilson from Cape May Courthouse in Jersey.  He is a line cook at the Bellvue Tavern.  The pot was 390 million dollars.  We don‘t know what his cut is yet.  But drinks are on him tonight at the Bellvue Tavern.  So, congratulations to him. 

Tucker, she first loss the astronaut of her dreams.  Then she lost her dignity to a pair of diapers.  And now Lisa Nowak has lost her job.  NASA announced today that Nowak, who was charged with attempted kidnapping, after she drove nearly 1,000 miles from Houston to Orlando to confront another woman, has been fired.  NASA says the firing is not a reflection of the agencies belief in Nowak‘s guilt or innocence.  It is probably a reflection, however, of their belief that adults who voluntarily wear diapers should not be flying space shuttles.  I think that‘s probably true. 

CARLSON:  Really, I think that‘s discrimination, just plain and simple. 

GEIST:  That she wears diapers?

CARLSON:  Absolutely.  So she wears diapers and she threatens her boyfriend‘s lover with a hammer, that doesn‘t mean that she can‘t fly a space shuttle. 

GEIST:  From a government agency no less.  That ought to be illegal. 

I think it is, actually.

CARLSON:  She needs union protection is what she needs. 

GEIST:  Now, am I the only one thinking here?  I know I am a TV producer at heart, Tucker, but reality shows.  We get the three kids together.  We put them up in the International Space Station, turn the cameras on and just see what happens.  Right?  Don‘t you think that‘s a good show?

CARLSON:  I would actually watch that. 

GEIST:  Of course you would.  Well, she is going to go back to the Navy for the time being, but keep your eyes peeled for that show.  If I have anything to do with it, anyway.  Well, Tucker, now to a reminder that love can be a very fragile thing.  Especially when it gets hit by a car.  James Olwein (ph) and Katie Martendale (ph) of Utah got married in a quickie Las Vegas wedding ceremony on Sunday, and since we are now showing you a mug shot of the groom, you probably guess the honeymoon didn‘t go so well. 

Just a day after the wedding, the couple got into a fight while driving outside Salt Lake City.  Police say the bride then got out of the car and yes, the groom tried to run her over a day after the wedding.  Martendale, who we have to assume will keep her maiden name, was not seriously injured in the accident, or not the accident, but the incident.  Her husband has been charged with aggravated assault with a vehicle. 

Now Tucker, you know as well as I do, marriage is an adjustment.  We all have different ways of handling disputes, of resolving conflicts.  His way is running over her with a car.  It‘s time to step back and maybe accept that and see what we can do with that. 

CARLSON:  No, I think they need to talk.  Looking at their mug shots, it is hard for me to believe they are married, as you put it, in a quickie wedding. 

GEIST:  That was the real shocker. 

CARLSON:  They look tough enough to handle it actually.

GEIST:  I don‘t want to point out the obvious or anything, but those quick marriages do not have the best track record.  People tend to get run over by cars, rather than should mates, after that.  Well, Condi Rice and the State Department are sticking up for Borat, Tucker, and good for them.  In it‘s annual human rights report, the Department of State criticized the nation of Kazakstan for a number of abuses, among them censoring Borat. 

The report cited the government shutting down of the Borat website in that country as an example of the restrictions on free speech there.  Borat is, of course, the fictional bigoted Kazak journalist who‘s movie has grossed more than 250 million dollars worldwide.  The government of Kazakstan has threatened legal action against the actor who plays Borat because of his negative portrayal of the country. 

Now Tucker, it is a nice gesture.  Obviously we get the point.  I have to laugh, because Sasha Baron Cohen, as he sits there lighting cigars with 100 dollar bills and sipping crude-oil, I do not think his human rights have been violated too much.  Do you?

CARLSON:  I agree, and I am against censorship always and everywhere, except in Kazakstan with this movie.  I completely understand why they banned it.  I think it‘s a fair response. 

GEIST:  It‘s good though.  Apparently, tourism is up there by the way.

CARLSON:  Of course it is. 

GEIST:  Yes, he‘s good for the country.

GEIST:  Everybody‘s looking for cheap wives.

GEIST:  Finally, Tucker, Barack Obama might be the hottest politician on the planet right now.  But when you get right down to it, he is just like you and me.  He has a weakness for Beyonce.  Senator Obama spoke at a fund raiser held for him in New York on Monday night, and when he spotted Beyonce in the crowd, he said, quote, I never do this, but can I ask for your autograph.  Obama then grinned ear to ear for a picture with her.  The encounter ended there though, as Beyonce‘s boyfriend, Jay-Z, unfortunately for Obama, stepped in between them.

And, you know, this is a nice story Tucker but it doesn‘t tell us anything about Obama other than the fact that he is mortal and carbon based and does everything else that other men do, which is worship Beyonce.  

CARLSON:  Oh I disagree.  No, now we know his weak spot, his Kryptonite.  It‘s Beyonce.  This will be useful information for the rival campaign. 

GEIST:  I am afraid she is everyone‘s Kryptonite, Tucker. 

CARLSON:  Yes, maybe.  I had never seen her before right now,  But I‘m impressed.  Willie Geist, thanks Willie.  That does it for us.  Thanks for watching.  Up next, “HARDBALL.”  We‘ll be back tomorrow.  Tune in then.  In the meantime, have a great night.

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

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