updated 5/23/2007 10:00:55 AM ET 2007-05-23T14:00:55

Guests: Mark Leibovich, Anne Kornblut, Tom Fitzgerald, Robert Gibbs, Karen Hanretty, Jerry Brown, Bing West

CHRIS MATTHEWS, HOST:  Baghdad prepares.  The Associated Press says the Iraqi government is preparing for a possible U.S. pull-out this year.  Could they know something we don‘t?

Let‘s play HARDBALL.

Goodbye, Baghdad.  What if America pulled out this fall and left Iraq to fight the war?  That may or may not be something President Bush would do if the Petraeus fails, but we learned today it is something the Iraqi government is trying to prepare for.

Pain in the McCain.  Is a bad temper such a bad thing?  Do we know any president who hasn‘t had one?  Let‘s argue.  So what‘s a spouse to do?  Michelle Obama says she stays out of her husband‘s politics.  Hillary says, Anything Bill can do, I can do.  When Judith Giuliani talks about getting into the cabinet, she‘s not talking about the pantry.  Finally, Rudy tries to tag Bill Clinton for not carrying out the Iraqi Liberation Act and taking down Saddam when he had the chance.  The probably is, Mr. Mayor, that the act you refer to had to do with supporting the political opposition in Iraq.  It never mentioned military action, and much less authorized any military action by us.  Where are you getting this stuff?

Let‘s bring in the panel.  Anne Kornblut of “The Washington Post,” Mark Leibovich of “The New York Times,” and “Philadelphia Inquirer” political reporter Tom Fitzgerald.

Our first topic, Iraq without Americans.  What if the U.S. Army and Marines pulled out of Iraq this fall?  What if we left the Iraqi army to fight the Sunni insurgents, the Shia militia and al Qaeda?  Washington may not be planning for that possibility, but Baghdad is.  The Associated Press reports today that the Iraqi government is making contingency plans right now for a pull-out this fall.  What‘s this say about the Bush policy?  Does it mean that the Iraqis think Bush might actually pull the plug if General Petraeus says the surge isn‘t surging?  The Democrats in Congress suggest they are ready to attack a pull-out plan in the defense appropriations bill, by the way, that covers October 1 onward.

Let‘s watch.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NE), MAJORITY LEADER:  We now have the timeline that the Republicans have set, and that‘s this September.  And that is the very least.  And then, as I‘ve indicated, the defense authorization, we‘re going to start right where we‘ve left off with this bill, continuing our push to change direction in the war in Iraq.

(END VIDEO CLIP)

MATTHEWS:  Mark Leibovich, what we make about the fact that American people are now getting confronted—in the newspapers tomorrow they‘ll get it—the AP story—the Associated Press reports that Baghdad is planning for the possibility of our withdrawal this fall, totally?

MARK LEIBOVICH, “NEW YORK TIMES”:  Well, I‘m not sure that would be much of a surprise to the American public, at this point, I mean, because it‘s been such a central part of the dialogue here for so many months, I think, you know, the fact is, people would assume that Baghdad has been preparing for this.  So I mean, clearly, this is a battle that‘s being fought in Washington, as well as in Baghdad.  And I think, you know, as far as how it‘s being played on the street here...

MATTHEWS:  Yes.

LEIBOVICH:  ... it will be very—you know, very—very surprising, I think, if people are surprised.

MATTHEWS:  But Anne, the thing I keep thinking about is the president keeps saying we‘re hoping to hear from General Petraeus that everything‘s going swimmingly, but he never says what a lot of people might assume, if it‘s not going swimmingly, if the surge isn‘t surging, we‘re pulling out.  He never tells you the second part, the plan B.  Does he have one, and is Baghdad preparing for it?

ANNE KORNBLUT, “WASHINGTON POST”:  No, he—well, I can‘t speak for Baghdad yet, but he—no, he never says that‘s one of the possibilities.  You know, it‘s pretty striking, that he‘s going to wait until September, and at every juncture, he says that to pull out would be to surrender.  I will say that if this actually is what‘s going to take place, it‘s going to rob some of the presidential candidates of their favorite topic.  It‘s hard to imagine what Democrats, in particular, would talk about if they didn‘t have troops still on the ground Iraq this time next year.

MATTHEWS:  Well, let me speak for them, for once in my life.  I don‘t think they want the war to continue so they can win the election, do you?

KORNBLUT:  I‘m not saying that.  I‘m just saying it would change the dialogue.

MATTHEWS:  Well, that would be good.  We‘re always better off with

less pain and less death in this country.  Let me go to—let me go to Tom

is it Fitzpatrick?

TOM FITZGERALD, “PHILADELPHIA INQUIRER”:  Fitzgerald.

MATTHEWS:  Fitzgerald.

FITZGERALD:  Some Irish guy.  Fitz-something...

(CROSSTALK)

MATTHEWS:  Well, some Mick in from Philly, you know?  I know the type. 

Thank you for joining us.  The Obama rally—give us a sense...

FITZGERALD:  No problem.

MATTHEWS:  ... of what the feeling is in that crowd up there.

FITZGERALD:  It‘s—it‘s—you know, he‘s—he‘s—the cliche has become he‘s a rock star, so it‘s appropriate they have him in a rock club.  It‘s really loud.  A lot of people are very excited by the audacity of hype, or whatever you want to call it.   I mean, there‘s not a lot of—people love him, but they don‘t really have a lot of detailed reasons as to why.

MATTHEWS:  What‘s the ethnic makeup of the crowd?  Is it black and white, mixed, or what would you say?

FITZGERALD:  Yes, it‘s quite mixed.  And it skews a little young, yes.

MATTHEWS:  Well, I‘m looking at it right now.  It‘s pretty impressive. 

When‘s he going to start that speech tonight?

FITZGERALD:  I‘m sorry.  Say again?

MATTHEWS:  Has he started yet?

FITZGERALD:  No.  He hasn‘t started yet.  We‘ve got a local deejay spinning platters, which is why I‘m having, you know, trouble with my hearing.

MATTHEWS:  OK.  Well, we‘ll get back to you in a minute, Tom, OK? 

That‘s from Philly.

FITZGERALD:  All right.

MATTHEWS:  I want to—I want to define what‘s—the thing is, Mark, this whole problem—the Democrats basically played chicken with the president up until today, basically, and said, We‘ll cut off—we‘re going to insist that any bill providing troops—money for the troops and for reconstruction over there would include a six-month pull-out schedule.  Now today Nancy Pelosi‘s trying to sell to her caucus tonight the fact that they can‘t do that anymore.  They got to live with the fact—the fact of life that the troops need to be funded, and the president won‘t sign a bill that has those contingencies on it.

LEIBOVICH:  Right.  Well, I think, clearly, I think Democrats, if you talk to people on the Hill, are seeing this as a long-term proposition, long-term in Iraq meaning three to maybe six months.  I mean, this is not something that they‘re going to win or lose politically over the next two weeks or so.  And certainly, when you bring the ‘08 candidates into this, you know, mix, it‘s just a whole—you know, it‘s even a longer-term gambit.  So I think, clearly, right now, we‘re in sort of bare-bones negotiation mode, and I think over time, we‘ll see how it plays out.

MATTHEWS:  What do you make, Anne, of Obama coming out and saying that he would still like to get those 16 more Republican senators in the Senate, Republicans, to help override a veto.  Is that just a pie in the sky?  What kind of politics is that?  Is he still selling idealistic politics while the others, like Pelosi and I suppose Hillary Clinton have to be more practical because they‘re more in the establishment, or what?

KORNBLUT:  Well, on a previous occasion several months ago, he had said that, you know, Look, we‘re going to have to fund this.  Let‘s just admit that we can‘t override a veto.

MATTHEWS:  Yes.

KORNBLUT:  So now he‘s saying that he‘d like to—I mean, he was criticized for saying, Let‘s give in.  Look, at some point, Democrats were going to have to—this was brinksmanship.

MATTHEWS:  Yes.

KORNBLUT:  They were going to have to come to a compromise or else be accused of not funding the troops.  But like Mark said, this is going to—

Harry Reid said today they‘re going to take it to the next fight.  So they‘ve funded this one.  The next funding battle, they‘re going to have the same exact debate.

MATTHEWS:  And the war‘s not getting anymore popular.

Let‘s take a look at this next topic—“name for his pain.”  John McCain‘s temper rose as an issue and a fact yesterday when he dropped the F bomb on Senate colleague John Cornyn, for which he later apologizes.  Is McCain‘s temper a real campaign issue in a country where most top politicians, if not all, are known to go ballistic on occasion?  Bill Clinton had what everybody called his “purple rages,” for example.  Dick Cheney told a Democratic senator the F bomb to himself, I suppose.  I‘m trying to word it properly for television.

Tom, are you up there, Fitzpatrick again, or Fitzgerald?  Are you around?  Can you hear me up there not?

FITZGERALD:  Yes. (INAUDIBLE) OK, Obama‘s coming out.

MATTHEWS:  Well, we‘re going to get back to you in a second.  Mark, this whole—it is a little chaotic up there in Philly.  Let me ask you this about the question of—is temper a bad thing in politics?

LEIBOVICH:  It depends on who you are and what kind of campaign you‘re running.  I mean, John McCain, when he was an insurgent candidate eight years ago or seven years ago, was seen as, you know, a quote, unquote, angry sort of anti- establishment candidate.  It certainly can add to your mystique quite a bit.  Now, when you‘re apparently doing what John McCain must be doing eight years later, which is trying to run on inevitability and maybe, you know, be more in line with the Republican establishment, it can be more of a dicey thing.

MATTHEWS:  Is this one of these things, Anne, where you can‘t trust the guy with the nuclear football because he has a temper tantrum?

KORNBLUT:  I mean, I would have to say that everyone—all these candidates in the past, like Cheney, has had a temper.  I think the problem for John McCain is that his rivals have tried to portray him in the past as crazy, in particular with his POW experience.  And so the temper—when he bursts out like that, it feeds into that narrative, which is not a good one for him.

MATTHEWS:  Well, give me that narrative.  What is it?

KORNBLUT:  That after years—I mean, this is what we heard in 2000 from his rivals then, that after years as a prisoner of war, that he was somehow mentally unstable.  Obviously, his supporters and John McCain would content that that‘s absolutely not true.  Everyone has a right to get angry.  But I think when he has outbursts like this, it feeds—it gives ammunition to critics who would say he‘s not stable enough to run the country.

MATTHEWS:  Who is pushing the “McCain the nut”?  Can you give me a generic source on that?  Who is pushing the “McCain is a nut” theory?

KORNBLUT:  Well, who did he run against in 2000?

MATTHEWS:  George W. Bush.

KORNBLUT:  Other Republicans, I would say.  I would say...

MATTHEWS:  Karl Rove.

KORNBLUT:  ... other Republicans have said that story line before.

MATTHEWS:  Did they actually say it to reporters as if they believed it, or were they just doing that old trick of, Well, you know, some people think, or there is the theory that?  How‘d they float it?  How—how—how bluntly where they in pushing this little sugar plum?

KORNBLUT:  Look, it was a very unpleasant campaign in a number of respects.  That was one.  There was a very nasty primary in South Carolina in 2000.  I would say that, you know, as nasty as they might have been under the table—and look, all campaigns are like that—that McCain has to be ready to hear that again this time, which is why I would expect that he would try and curb that this time.

MATTHEWS:  Oh, God.  You know, I learn something new every night here, Mark.  Have you known that story, the enemy (ph) pushes the story that he‘s a little bit off?

LEIBOVICH:  Never heard of such a thing in my entire life, no.

(LAUGHTER)

MATTHEWS:  You‘re being sarcastic.

LEIBOVICH:  I am.  I mean, I think what—clearly, I mean, the media is—I mean, there—far be it from me to criticize the media, but I think...

MATTHEWS:  But this is what Republicans—I think the present and former—who was it that pushed it against Michael Dukakis back in ‘88?  Remember how they used to (INAUDIBLE)

LEIBOVICH:  Yes.  Yes.

MATTHEWS:  Reagan even (INAUDIBLE)

LEIBOVICH:  Lee Atwater (INAUDIBLE) Sure.  No.  I mean, but clearly, though, I mean, “The LA Times” had a story today on McCain‘s temper, OK?  And you know, this is pegged to the thing the other day with Cornyn.  And I mean, this is sort of how this wheel spins.  I mean, there‘ll be an incident like that, I mean, some editor sees a trend piece to be written, and...

(CROSSTALK)

MATTHEWS:  As someone who doesn‘t have a temper at all, I find this very hard to deal with.  Just kidding!

We‘ll be right back with more of the panel.  We‘re talking the temper and this theory that John McCain‘s a loony tune, pushed by some of his best friends out there.  And later, Obama campaign communications director Robert Gibbs is going to join us from that Philadelphia rally we‘re—there, we‘re watching it right now.   We‘ll get more—we‘ll to see some of the candidate himself in a moment.  Welcome back in a moment to HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to—well, that‘s Barack Obama, of course, in Philadelphia right now, at a big rally happening just as we‘re broadcasting tonight.  We‘re going to get to a large part of that when we get back.  We‘re with “The Washington Post‘s” Anne Kornblut right now, Mark Leibovich of “The New York Times” and Tom Fitzgerald of “The Philadelphia Inquirer.”  We‘re listening, of course, to Barack Obama.

Let‘s take a look right now at what Rudy Giuliani said last night on Letterman.  It‘s pretty interesting.

We‘re going to go to Michelle Obama right now.  Let‘s take a look at what she said about her husband.  That was Michelle, the candidate‘s wife.  She says that she doesn‘t get involved in her husband‘s politics.  Quote, “There is much work we need to do as a family and as a couple.  We talk about our work.  We talk about what we do.  But he makes the decisions on his own, and I try to be supportive.”

So how‘s that square with Hillary and Bill‘s two for the price of one or with Mitt Romney‘s comment that his wife‘s views aren‘t, quote, “relevant”?  And what about Judith Giuliani‘s reserved seat at the cabinet table?

I want to start with Anne Kornblut on that.  This spouse role is definitely up for grabs.  It‘s kind of a multiple choice.  Judith Giuliani wants to play a role in the cabinet room.  Michelle Obama says, Let my husband do his job, I‘ll do mine.  Where are we at on the role of the spouse?  And of course, Bill Clinton looms out there as the First Gentleman.

KORNBLUT:  I have to say, this is like the election of the spouse between Bill Clinton, Michelle Obama, who‘s such an enormous figure in her husband‘s life, Elizabeth Edwards, obviously playing such a starring role in her husband‘s campaign.  But so far, we haven‘t seen anything quite like the Clintons repeating itself.  Michelle Obama, make no mistake about it, she‘s a very serious in her own right.  IO believe she‘s had a very strong impact on her husband‘s commitment to public service in a lot of what they believe as a couple.  But she‘s in no way saying she‘s actually going to be a part of the White House if he wins.  In fact, she said she‘s not even sure what she would do.  She can‘t—she doesn‘t want to, in essence, jinx it by thinking that far ahead.  So I would say the Clintons are still the only really two-for-one family in the race that we‘ve seen.

MATTHEWS:  What did you make of Mitt Romney saying his wife‘s views on policy and politics are not relevant?  That‘s pretty tough.

KORNBLUT:  Well, I mean, that‘s one way to distance yourself from a spouse.  I think it‘s hard for any spouse to really argue that they‘re—that the spouse‘s comments aren‘t relevant.  It‘s kind of, like, you know, the White House saying that Jimmy Carter was less relevant when he was critical of them, and then as soon as he backed away, they said he was relevant once again.  I think that they‘ll be relevant by choice.

MATTHEWS:  Yes.

KORNBLUT:  But obviously, spouses are free to believe what they want, and their spouses who are running are free to just distance themselves.

MATTHEWS:  Well, what I find—I can‘t imagine a modern-day marriage where one spouse says the other spouse‘s views are irrelevant to them.  We all sort of share our discussion.

Anyway, up next, Rudy‘s wrong.  Rudy Giuliani said on David Letterman last night that Bill Clinton somehow should have invaded Iraq.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST, “LATE SHOW WITH DAVID LETTERMAN”:  Now, again, another ridiculous hypothetical question.  Regardless of the party in power, regardless of the man or woman in the office, would we have been at war in Iraq?  Everything up to that decision-making point is the same.

RUDOLPH GIULIANI ®, FMR NYC MAYOR, PRESIDENTIAL CANDIDATE:  You know, it‘s hard to say.  I mean, it got the vote of a lot of Democrats who supported it, and actually, when Saddam was overthrown, praised the president for doing it.  It was the policy of the Clinton administration to have regime change in Iraq, so in a way, George Bush carried out what Bill Clinton wanted to do and didn‘t get the opportunity to do.  So who knows—who knows...

(APPLAUSE)

GIULIANI:  I can‘t tell you what would have been if a different president were there.

(END VIDEO CLIP)

MATTHEWS:  Well, the audience was wrong when they clapped, and he was wrong when he said it.  The Iraq Liberation Act had nothing to do with overthrowing Saddam Hussein.  It had to do with supporting the political opposition.  How can people like Rudy Giuliani get out on the campaign trail without any research?  I mean, who‘s writing this stuff for him, Mark?

LEIBOVICH:  I—you‘re putting me on the spot.  I have no idea.

MATTHEWS:  Anne, how does a guy come out there and accuse—saying that there was an Iraq Liberation Act that meant anything?  I think it got about two hours of debate.  IT was irrelevant.  It had no teeth to it.  It had nothing to do with military action and certainly didn‘t authorize a war against Iraq or military action against Iraq.  And yet here he is, Rudy Giuliani, referring to it as something that opened the door for Clinton to attack Iraq.  I don‘t get it.

KORNBLUT:  Well, I mean, it—this has been a standard Republican line for some time that this...

MATTHEWS:  It‘s bogus!

(CROSSTALK)

KORNBLUT:  ...  of the Clintons—well, I‘m telling you...

MATTHEWS:  It‘s bogus!

KORNBLUT:  So you‘re going to call them on it.  OK.  I mean, this has been—this has been...

(CROSSTALK)

MATTHEWS:  But it‘s a fact.  It‘s not an argument.  It‘s a fact.  The Iraqi Liberation Act had no real debate in the Congress.  It was passed because some people really wanted to—you know, the Iraqi National Congress wanted to take a shot at Saddam, and they got (INAUDIBLE).  They got a vote of—you know, sort of a resolution.  It had nothing to do with going to war with Iraq.

KORNBLUT:  So you‘re fact-based now.  You‘ve been reading Al Gore‘s book, Chris.

MATTHEWS:  No, I‘m fact-based when it comes to everything, Anne.  Thank you for that—that vetting (ph).  I really need that.  Let me ask you, do you think Rudy Giuliani‘s going to be called on this by anybody at “The Washington Post,” where you work?  DO you think they‘re going to check his facts?

KORNBLUT:  I think you—well, I think you‘ve inspired us.  I mean, I think it is—I think it‘s interesting that that—the he‘s exposed to that now, and I think it‘s one of the dangers for the people who were not in a position to vote at the time of the war in Iraq.  You know, there have been disadvantages to being a sitting senator and having to cast a ballot for or against it, but there are also advantages to having been there, having studied it, really knowing what you‘re talking about, and having a record to show for it.

MATTHEWS:  I agree.  And I also think that this war has basically become a partisan argument.  I just think, Mark, that the Democrats have opposed the war, some of them for political reasons, some because they don‘t like the war, they don‘t think it‘s good U.S. policy.  But I view a lot of Republican support for this simply being partisan loyalty to their president.  They support the war that they would not support if it was a Bill Clinton war, same exact war.

LEIBOVICH:  I think that‘s probably true, and it‘s probably true three, four years ago.

MATTHEWS:  Yes.  Isn‘t it interesting.

So with this spouse thing—I want to get back to some fun here before we get back to Obama.  It seems to me that there is a real interesting option play now for spouses.  You can be very aggressive, like Hillary Clinton was in health care, or Judith Giuliani.  It‘s not partisan.  And you can say, I want to sit at the cabinet table.  Or you can say, You know, I got the house to run.

LEIBOVICH:  Right.  Yes, I think, when you have—clearly, spouses are different.  I mean, I think Bill Clinton is obviously a different case since he was a for5mer president and he would be the first spouse former president...

MATTHEWS:  Yes, I would say he‘s the first of a lot of things!

(CROSSTALK)

LEIBOVICH:  I would say—yes, he‘s probably the first of a lot of things.

So, I—I think, you know, clearly, you know, Rudy Giuliani, his

remarks the other night on—I guess it was on “Letterman”—I mean, he -

Rudy has been very good about finding good bogeymen.  I mean, you know, Bill Clinton is obviously...

MATTHEWS:  So, he would rather knock Bill than Hill?

LEIBOVICH:  Well, Bill is still very—very unpopular among the Republican base, just like...

MATTHEWS:  Is that...

(CROSSTALK)

LEIBOVICH:  Yes, that might—I have heard this—my sources tell me this.

MATTHEWS:  So, you mean that he—it may be a way of scoring points with the religious right, taking a whack at the Clintons...

(CROSSTALK)

MATTHEWS:  ... at Bill especially?

LEIBOVICH:  I don‘t know who he is trying to score ports—points with.  But, I mean, if you look at the Ron Paul moment the other night, I mean, he‘s very good at sort of picking his spots and realizing...

MATTHEWS:  You are so right.

LEIBOVICH:  Aren‘t I, though? 

No.  He‘s very...

(LAUGHTER)

MATTHEWS:  No.  But I think he needs a little more research.  And he better stop listening to people like John Bolton.  According to “Newsweek,” he has been advising him.  And, you know, he has got to get some objective information, because I have experience in this department, that the neoconservatives are not reliable for research.

Anyway, thank you, Anne Kornblut. 

Thank you, Mark Leibovich.   

And, thank you, Tom Fitzgerald, up in Philly.

Up next:  Obama campaign communications director Robert Gibbs—he‘s up in Philly—we will get to him, and to the rally, as we promised, with Barack Obama in Philly. 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

(JOINED IN PROGRESS)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  ... green technologies.  We could insulate homes all throughout Philadelphia, put young people back to work, retrofitting our businesses.  We can do those things, if we have the imagination. 

MATTHEWS:  Well, that is live.  That is Barack Obama live in Philadelphia for a big rally that is happening right now.  He can pump up the crowds, but can he pummel the front-runner, Hillary Clinton?  Does Obama have what it takes to take on Clinton right now?

Here to talk about it is Obama campaign communications director Robert Gibbs.

Sir, thank you for joining us. 

I think we sat on a plane together recently.  Let me ask you this.

ROBERT GIBBS, OBAMA CAMPAIGN COMMUNICATIONS DIRECTOR:  Good—good to...

(CROSSTALK)

MATTHEWS:  When is the—when is the campaign debate between Hillary Clinton and Barack Obama to begin? 

GIBBS:  Oh, I don‘t know, Chris. 

I mean, this is not about running against any specific people.  This is about putting forth a hopeful vision of leadership for this country.  Senator Obama is doing it behind me, talking about an energy policy that gets us away from $4 gas, an educational system that works for our children, a health care system that provides coverage for every American, and, most of all, a plan to get us out of Iraq. 

That is what voters want to hear about.  And I think that is what Senator Obama has been travelling around the country communicating. 

MATTHEWS:  OK. 

What is the difference between your candidate, Senator Obama, and Senator Clinton on the war in Iraq, right now, today?  What‘s the difference?

GIBBS:  Well, obviously, the—the initial support on the war in Iraq was quite different. 

Senator Obama, in 2002, for your viewers who don‘t know it, spoke out against this war, opposed it from the beginning, talked extensively about the situation that we find ourselves in now.  And he spoke out against it when it was not popular to do so. 

He introduced a plan that would require our troops to come out, starting three weeks ago, the 1st of May, and have all our combat troops out by March 31, 2008.  That was a unique position.  It was a position that the Senate Democrats largely adopted and the president recently vetoed.

We have to change course in Iraq.  Senator Obama has been consistently opposed to this war, and believes it‘s time to change course and bring our troops home. 

MATTHEWS:  Did have a vision as to how bad it would get in Iraq, or did he just not like it because he did not like the policy?  Did he see ahead to a civil war between the Sunni and the Shia, the hostility we would face in the Islamic world and the world at large? 

GIBBS:  Well, certainly, in that speech in 2002, he talked about a war that was going to cost us billions of dollars, cost us thousands of lives, and that we were not thinking about how we were going to govern this country, or how the Iraqis were going to govern this country, once we removed the dictator through military action. 

We have seen, over the past five years, there is no military solution to the war in Iraq.  There can only be a political solution.  Right now, we have American, young American men and women patrolling the streets the Baghdad and throughout Iraq who are refereeing somebody else‘s civil war.

They are reluctant to come to any accommodation politically to start getting along with each other to govern their own country.  And, quite frankly, it is just time that we stop policing their civil war. 

MATTHEWS:  Robert, do you think, if you had a platform for your candidate—you‘re communications director—if you had a platform for the two senators to debate one on one, that would be for this country, to have such an opportunity, Barack—Barack Obama against Hillary Clinton, one on one, on the same stage? 

GIBBS:  Look, Chris, there‘s going to be plenty of opportunities for us to talk about our plan...

MATTHEWS:  No, one on one, when will that opportunity—when...

GIBBS:  ... for Senator Clinton...

MATTHEWS:  ... will that opportunity—do you think that it would be good...

(CROSSTALK)

MATTHEWS:  ... for the country to see them side by side?

GIBBS:  We just participate in the debates.  We don‘t govern the rules. 

We look forward to, in—I think it‘s—in two weeks, we‘re going to

all the candidates will be in New Hampshire talking.  There will be six opportunities from July through December, countless opportunities from January and February, when the voting starts.

MATTHEWS:  Yes. 

GIBBS:  Obviously, we look forward to trading a lot of—a lot of issues, to talk about things like...

MATTHEWS:  But that‘s...

GIBBS:  ... how do we ensure our—how do we insure children...

MATTHEWS:  But, Robert, Robert...

GIBBS:  ... how do we provide health care.

MATTHEWS:  If you could have a chance to take—if you—I know—if you could have a chance for your candidate to take on Hillary Clinton directly on a national network like this one, would you want it or not want it?

GIBBS:  Chris, again, I think there‘s going to be plenty of opportunities to debate.  You will see that, like I said, in two weeks, we will be debating.  I‘m sure there‘s seven other candidates that would think us debating isn‘t necessarily a good idea.

MATTHEWS:  OK. 

GIBBS:  But we look forward to talking to all of America about the issues that they‘re concerned about, health care, energy, education, and getting our troops out of Iraq.

MATTHEWS:  OK.

Well, Robert, thank you for coming on HARDBALL tonight. 

Your candidate looks good tonight.  We hope to see him in the same ring with Hillary Clinton very soon. 

GIBBS:  Chris, we hope...

MATTHEWS:  Thank you very much...

(CROSSTALK)

GIBBS:  Chris, we hope your brother is out here somewhere. 

(LAUGHTER)

MATTHEWS:  I hope he is, too, somewhere.

(LAUGHTER)

MATTHEWS:  I think he is over at the—the Giuliani rally. 

Anyway, up next:  Do Democrats face facts on troop funding, or can they still get what they want?  Big issue coming up—this fight goes on, on troop funding, and paying for the war, and having some kind of timetable and benchmarks to leave that country.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

VERA GIBBONS, CNBC CORRESPONDENT:  I‘m Vera Gibbons with your CNBC “Market Wrap.”

Stocks closed little changed today.  The Dow Jones industrial average lost almost three points.  The S&P 500 fell almost one point, and the Nasdaq gained nine. 

Gasoline and oil futures fell on signs of increasing gasoline output and expectations a government report tomorrow will show a significant increase in gasoline stockpiles.  Gasoline futures dropped 9.5 cents in New York, oil falling $1.30 to $64.97 a barrel.

And shares of MGM Mirage up 27 percent today, after investor Kirk Kerkorian made a play for two of MGM‘s prized Las Vegas properties, including the Bellagio Hotel and Casino—Kerkorian also—already owns 56 percent of MGM, but today‘s move put the entire company in play. 

And Canadian aluminum giant Alcan has rejected an unsolicited $27 billion takeover bid by rival—rival Alcoa. 

That‘s it from CNBC, America‘s business channel—now back to

HARDBALL.   

MATTHEWS:  Welcome back to HARDBALL.

After weeks of demanding a timeline for a U.S. troop withdrawal from Iraq, Democratic leaders backed down today in negotiations with the White House, and agreed to keep funding the troops without withdrawal plans. 

HARDBALL‘s David Shuster has more. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, NBC CORRESPONDENT (voice-over):  After weeks of refusing to back down to the White House, today, Senate Majority Leader Harry Reid did just that. 

SEN. HARRY REID (D-NV), MAJORITY LEADER:  I think we have to look at the progress that has been made.  We now have the timeline that the Republicans have set, and that is this September. 

SHUSTER:  The bipartisan agreement to fund the war through September requires the Bush administration to give Congress reports this summer and fall on Iraq‘s political security and economic progress.

But, despite indications the U.S. troop escalation is not working, a spike again in sectarian violence and more than 180 U.S. troop casualties in just the last two months, Democratic leaders are now giving President Bush nearly all of the concessions he has been demanding.

There are no withdrawal timetables, no restrictions, and no requirements of the Iraqi government, only goals.  The action is a reversal from the Democratic leadership position just last Friday.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  It is clear that the difference between the Democrats and the president is the issue of accountability.  He will not accept any accountability. 

SHUSTER:  And, in fact, over the last two months, Democrats have repeatedly hammered the Bush administration for keeping the war going without no conditions. 

PELOSI:  The fact is, the president of the United States, as the commander in chief, has weakened our military. 

REID:  No more will Congress turn a blind eye to the Bush administration‘s incompetence and dishonesty. 

PELOSI:  I just wish the president would take a deep breath, recognize, again, that we each have our constitutional role. 

REP. STENY HOYER (D-MD), MAJORITY LEADER:  The Iraqi parliament must not go on vacation, while American men and women are fighting and dying for them. 

SHUSTER:  But the Iraqi parliament is still planning to go on a two-month vacation.  And, in the congressional war funding bill, as the White House demanded, there are no requirements that Iraq make political progress, only construction money as an incentive. 

The political cave-in by Democrats is due to simple math.  In the Senate and the House, Democrats have the majority, and have used it to pass funding bills with restrictions. 

UNIDENTIFIED MALE:  On this vote, the yeas are 221.  The nays are 205.   

SHUSTER:  But the Democrats are short of the votes needed to override a presidential veto and pass a war funding measure that would begin a troop withdrawal.

Furthermore, Memorial Day is fast approaching., and the president and top military commanders have said repeatedly that failure to pass a funding measure by the end of this month would start hurting troops in the field. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  The need to act is urgent.  Without a war funding bill, the military has to take money from some other account or training program, so the troops in combat have what they need.

SHUSTER:  Several members of the House‘s influential Out of Iraq Caucus say they will not support any legislation that does not attach conditions on the continued U.S. troop deployment. 

And, while Democratic leaders will be able to bypass them and pass the funding bill by Memorial Day, the Democratic leaders may not be able to avoid an anti-war rebellion in the weeks that follow.

(on camera):  Still, the bipartisan measure will only fund the Iraq war for the next four months.  In September, the debate will start all over again. 

And some Republicans warned today that, without clear progress in Iraq by the fall, President Bush will not get his way again. 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.

Let‘s bring in the HARDBALLERS.  Jerry Brown is California‘s attorney general.  He‘s also a former presidential candidate and, of course, a two-time governor of California.  And Karen Hanretty is a former spokeswoman for Governor Schwarzenegger himself.

Well, what is happening here?  I mean, Memorial Day is coming.  The

battle over whether to fund the troops and whether to set a deadline,

obviously, has reached a crunch.  And the Democrats have decided to—that

what—what do you call it?  Discretion is the better part of valor, I think is the phrase here.

KAREN HANRETTY, REPUBLICAN STRATEGIST:  Yes. 

That‘s—I will tell you what, though.  That is a bad headline, if that is what is on the front pages of the papers tomorrow, what we just heard, that Senator Harry Reid caves to President Bush.

(LAUGHTER)

HANRETTY:  That is really bad for the Democratic Party. 

I don‘t think this is a win for the Republicans, though.  I don‘t think it necessarily boosts our chances for elections in 2008. 

I really think this damages the Democrats.  And I think what this does is, it prolongs a very increasing negative mood throughout this country. 

MATTHEWS:  You think the Democrats would have been smarter to not to give the president a clean bill to support the troops, just risk it, and say, if he vetoes it, we are going to have to live with that; then we don‘t have the troops funded over Memorial Day?

HANRETTY:  Well, you...

MATTHEWS:  Is that a smarter move? 

HANRETTY:  I will tell you what.  It would not have been a good headline on the front pages of papers over Memorial Day.  But it depends on who is their audience.  And the broad public isn‘t necessarily their audience right now.  I think that they‘re looking at winning elections.

(CROSSTALK)

MATTHEWS:  How about this audience?

HANRETTY:  Both—both parties...

MATTHEWS:  The troops?

HANRETTY:  Both parties are looking at... 

(CROSSTALK)

MATTHEWS:  How about the parents and loved ones of the troops, who hear that Democratic Party has cut off funding?

HANRETTY:  But this isn‘t about the parents and the loved ones.

MATTHEWS:  Oh, it‘s not?

HANRETTY:  I mean, not—I mean, honestly, this debate that we are seeing between the Republicans and the Democrats going on right now, look, if you are honest, you know that this is about political hardball.  This isn‘t about the—the families.

MATTHEWS:  Well, I‘m honest when I recognize that, if the money, if the funding gets cut off, if the troops don‘t get the funding, that is serious business.

Jerry?

JERRY BROWN (D), CALIFORNIA ATTORNEY GENERAL:  Well, we...

MATTHEWS:  Mr. Attorney General?

BROWN:  We‘re—we‘re in a quagmire.  And it is not easy to extricate oneself from a quagmire. 

Congress had one choice, not to vote for the war.  They voted for it.  Now, getting out of that war, it‘s not easy.  It can go on a very long time. 

MATTHEWS:  It is Chinese handcuffs, isn‘t it? 

BROWN:  Well, I mean, how do you get out?

There‘s—and maybe just leaving might be the best scenario.

MATTHEWS:  Yes. 

BROWN:  But they don‘t have the votes for that.

And it is not clear that that doesn‘t make things a lot worse.  So, yes, they—the president is in charge.  He has got to pull allies together, other Arab nations, and do something, or just continue in a quagmire until he leaves, and pass it on to the next president. 

MATTHEWS:  What do we make...

(CROSSTALK)

BROWN:  This is not good for the parties.

(CROSSTALK)

MATTHEWS:  What do we make of the fact...

(CROSSTALK)

BROWN:  It‘s worse for the country.

MATTHEWS:  What we make of the fact that we are getting this report from the Associated Press, Karen, today that the Iraqi government is putting together a contingency plan for us pulling out this fall? 

Do you really think that the president, no matter what happens to the Petraeus plan, the surge, would even think of pulling out?  He‘s never said he would.

HANRETTY:  No, I don‘t think this president intends on pulling.  I think that he does intend on passing this off to the next administration.  The question is, at what point do the Democrats reach the point of diminishing returns, whereby, you‘re right—If they don‘t want to get off funding by Memorial weekend, at what point do things continue to get worse in Iraq, not better?  At what point do the Democratic rank and file look at their leadership and say, you know what?  Enough is enough.  If you have to suffer five weeks, five days, five hours of bad headlines, suffer the bad headlines.  Take it.

MATTHEWS:  But what about the objective reality of cutting off funding for the troops?  The objective facts of the troops finding out that the supplies aren‘t reaching them, that the training is not getting done?  That‘s a reality.   

BROWN:  That fact is, that can‘t be done.  If you look at it politically, the Democrats are going to let Bush handle it.  Number two, they couldn‘t anyway, because they have conservative members of their own and they will never get a majority.  Certainly they‘re not going to override a veto.  So the fact is, Bush got us into the war.  The Democrats, a good number of them, helped him us get in.  And we‘re not getting out, not this year, not for a long time.

Bush, I don‘t think will take us out.  The Democratic party‘s not going to take us out.   

MATTHEWS:  So we are stuck until 2009. 

BROWN:  We are stuck until a new president comes up with a plausible -

(CROSS TALK)

BROWN:  Remember, how did Nixon get out?  He got a Nobel Prize with Kissinger and created this big atmospheric that we were not defeated.  We‘re going to take a long to get an equivalent atmospheric to withdraw from Iraq.

MATTHEWS:  What do you make of John McCain getting really mad at Cornyn the other day on the issue of immigration, dropping the F bomb, which I think I did once on this show, to my discredit, but really getting angry?  Does this make him any different than say Bill Clinton, who was known for his purple rages, or Dick Cheney who just said something really awful to a senator? 

HANRETTY:  Something no one in this town would ever say. 

MATTHEWS:  Not in public and not with a mike on.

HANRETTY:  This is—

MATTHEWS:  Did Arnold Schwarzenegger ever get angry during the campaign and throw a towel or anything. 

HANRETTY:  I don‘t think Arnold Schwarzenegger ever gets angry.  He‘s a pretty cool cucumber.  Look, but—McCain has a lot of detractors in the Republican party.  And this is exactly the sort of behavior that they expect from him. 

MATTHEWS:  Are they going to push the loony toon argument that we heard about earlier from Ann Kornblut of the “Washington Post?”  How do they do that?  How do they push that?   A lot of people have tempers.  How do they push the idea that he has a temper, therefore he‘s a little bit off balance.

HANRETTY:  It‘s not just that he has a temper.  It‘s that he is the guy—Look, he is the caricature, the movie “Dr. Strangelove,” right, he‘s slim pickings.  He is the guy you are afraid is going to be riding that H bomb to world destruction, waving his cowboy hat, self righteous to the very end. 

MATTHEWS:  Karen, you are something.  It‘s that bad?  I would be more afraid of the Dr. Strangelove with the Nazi salute, that guy. 

BROWN:  Honestly, when people use the F word or get angry, that is very human.  But when you‘re in McCain‘s position, and there is some reputation that he has this temper, and he is older, and people are saying, are you up for it, it is not going to help.  And his detractors -- 

MATTHEWS:  OK, the vice-president of the United States, Dick Cheney, who looks like the calmest man in America, who told Pat Leahy, the senator from Vermont, to F bomb himself, if you will, on the Senate floor. 

BROWN:  Anger is totally human and totally normal.  It‘s just how it‘s going to be used against you.  It should be acceptable.  But in the game it is not acceptable. 

MATTHEWS:  We‘ll be right back.  Karen, I like the way you‘re all thinking, which is the possibility of insanity here.  I‘m just kidding.  No, the idea is used to argue that you‘re crazy because you have a temper; it is called the story line in politics.  It completes the story line, connects the dots.  We‘ll be right back with Karen Hanretty, who‘s here speaking for Arnold Schwarzenegger, and Governor Brown, who‘s speaking for Governor Brown. 

BROWN:  For California. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We‘re back with Karen Hanretty, no relation to Terry Hanretty of Notre Dame fame years ago—probably be your uncle or father.  Here is Rudy Giuliani, by the way, on the “David Letterman Show” again from last night.  Another bite from Rudy.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, TALK SHOW HOST:  Before you fall asleep every night, do you think to yourself, it is going to be me and Hillary?  Do you think that is what it will come down to? 

GIULIANI:  That is not my last thought before I go to sleep.  It could be Senator Clinton.  It could be Senator Obama.  It could be Senator Edwards.  Or, who knows, it could be Vice President Gore?  Who knows.

(END VIDEO CLIP)

MATTHEWS:  Well, wasn‘t that generalized?  Karen, is he afraid of just admitting he‘s going up against Hillary probably, because he does not want to get that male-female thing going there. 

HANRETTY:  Oh, I think he would love to go up against Hillary.  Don‘t you think that there‘s no one he would rather defeat on that ticket than Hillary Clinton.

MATTHEWS:  Just the deliciousness of the—

HANRETTY:  Yes, look, he was going to run against her for Senate.  He winds up dropping out.  He‘s the tough guy.  I think he would very much enjoy going after her. 

MATTHEWS:  Who would win that race? 

HANRETTY:  You know, I do not know, and here is why.  If it is Rudy Giuliani at the top of the Republican ticket, I think you will see a very depressed Republican turn out.  

MATTHEWS:  Will you have a third party on the right, Christian right?

HANRETTY:  No, and even if you did, I don‘t think it would be significant.

MATTHEWS:  Would you vote for Rudy? 

HANRETTY:  I do not know.  I honestly don‘t know. 

MATTHEWS:  Why?  You think there might be a problem with Rudy personally?   

HANRETTY:  No, it‘s not his personal life.

MATTHEWS:  What is it you don‘t like about him?   

HANRETTY:  I question that he might be—and I say this as a staunch conservative—a little too authoritarian.

MATTHEWS:  I like you.

HANRETTY:  -- even for a hardcore GOP girl like me. 

MATTHEWS:  A little authoritarian, a little bit of the old problem we had in the 20th century kind of problem. 

HANRETTY:  Yes.

MATTHEWS:  Yes, totalitarian.  Jerry?  (INAUDIBLE)  These are moments that happen on HARDBALL every couple of years, where somebody from one side politically actually something, not the F bomb, the T bomb I‘m going to call it, the truth bomb.  No, it‘s the truth bomb.  It‘s like Eddie Rendell one time and he said it was time for Al Gore to throw in the towel because he had just lost the Supreme Court fight.  Or when I had Joe Biden on a couple months ago and I said, wouldn‘t your party really like it if you had your own Karl Rove, and he said yes. 

She just said she has a little problem with Rudy being a little far over there, in terms of being Mr. Big, or being like big brother even.

BROWN:  Well, they all have a little problem if you look at each one of them.  It‘s just the person which—

MATTHEWS:  That‘s a big problem.

HANRETTY:  This is a problem to Republican voters.  I mean, obviously, you have a problem with him. 

MATTHEWS:  You mean your libertarian values and your belief in small government is being kicked around?

HANRETTY:  I am saying your hard core social conservatives have a big problem with him over abortion, and I think a lot of them won‘t vote if he is at the top of the ticket.  The libertarians are going to have a problem with him.   

MATTHEWS:  Karen, do you think that was when you thought the he just took the cops‘ position every time in all those really tricky cases, bad cases, he took the cops‘ position. 

HANRETTY:  Yes, it‘s that.  You look at his record, it is even a

matter of his style.  I always say that Rudy is the guy most likely at a

town hall to tell Joe Six-Pack to go screw himself.  You know, because he -

MATTHEWS:  What do you think about the way he handled his divorce from his second wife?  Do you think that was well done?

HANRETTY:  Only if you‘re writing a screen play, Chris.

MATTHEWS:  We want her back.  She‘s in town now, our booking producer. 

Watch this lady.  Jerry, it is hard to top her. 

BROWN:  I can‘t. 

HANRETTY:  Share your thoughts on illegal immigration, Jerry, come on.

BROWN:  I do not have any thoughts on Rudy Giuliani.  I think all these people are vulnerable.  They all have opportunities.  That‘s all.  Presidential campaigns are a race to find out who falls fastest for what reasons. 

MATTHEWS:  I love the twinkle in your eye?  You got it Jerry.  Thank you Jerry Brown, attorney general of California, and Karen Hanretty.  Up next, how is the surge going?  I‘m talking about the war.  We‘re going to talk to a man who has been over there, Bing West.  He‘s just back from Iraq for “Atlantic Monthly,” on the 13th trip.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Bing West is a national correspondent for the “Atlantic Magazine” and just returned from his 13th trip to Iraq since the war began.  Bing, where are we at in terms of—The fighting here at home in Washington tonight is over whether to let the president get full funding of the troops between now and the end of the summer, basically.  And then we‘re going to have another fight in the fall about the funding for the whole year. 

What happens if the surge is declared a failure?  If Petraeus comes back and owns up to the president, says this thing is not stabilizing the country, Mr. president, I can‘t say it is.  What does the president do?  What are his options? 

BING WEST, “THE ATLANTIC”:  First, I seriously doubt that General Petraeus is going to come back and say it is 100 percent success or 100 percent failure.  He is fundamentally, I think, going to give a mixed message and say, we have done better in Baghdad, where I‘m just from, because our troops are on the ground.  At the basic level, at the precinct level, the Iraqis are doing OK.  At the top level, they‘re not doing well. 

I think that‘s basically the messages that he‘s going to be carrying back.  The question is, as you put it, what is that plan B.  My son and I just wrote an article for “Slate Magazine” about that and basically suggested we‘re going to have to consider taking out our regular conventional units and bulking up our advisors, so we put on the backs of the Iraqis the burden of carrying that fight, and that can be done. 

MATTHEWS:  How many years are we away from a smooth transition to Iraqi rule? 

WEST:  Two or three maybe, maybe four. 

MATTHEWS:  You‘re talking—let‘s get these dates down.  You‘re talking 2011, we will have an Iraqi army that can stabilize the country? 

WEST:  Without us being there, that‘s probably approximate, yes. 

MATTHEWS:  Do you think any politician in the world will keep us there another four years. 

WEST:  Well, that‘s your job, not my job. 

MATTHEWS:  No, it‘s not.  That‘s the public‘s decision.  But I‘m just wondering.  Maybe great president with tremendous leadership skills can convince the country that it is a four year plan and it is a reasonable proposition.  But it can‘t just be open ended.  That‘s why I‘m asking about dates, because in the end you do need a date in your head somewhere. 

WEST:  But what I would suggest is at some particular point you can begin to pull all our units out therefore and bulk up the advisors, so the advisors stay, but we don‘t have 150,000 Americans. 

MATTHEWS:  Will the Iraqi government, such as it is, a Democratic government with all kinds of factions, will they live with an American force in their country that‘s not front line force, that‘s not taking the brunt of the fighting?  Or do they only want us there as long as we take the brunt of the fighting? 

WEST:  Oh, absolutely they would accept us staying there in a logistics and advisory role, because they can‘t do the logistics without us.  I heard you basically asking the question, gee, are they beginning to think we are going to pull out? 

MATTHEWS:  No, we have an Associated Press report today, Bing, that says that they are putting together a contingency plan for if we do pull it out this year.  This is the first time we‘ve heard of something like this. 

WEST:  Well, I asked the three star Iraq general that question about two days ago on the telephone and he told me, yes, they were planning in case there was an abrupt American pullout, because that‘s what scares them to death, is that they will end up like President Chu, and they will turn around the Americans have said bye-bye. 

As a result, if we were to do that abruptly, it would be chaos in that country, because they would plan on pulling back.  But I don‘t think we‘re going to pull out abruptly.  I agree with what General Brown—what Governor Brown just said, we are going to be there for quite some time. 

MATTHEWS:  Yes, he‘s pretty shrewd politically, Jerry Brown.  Let me ask you about this, the way I would like to do it, as a civilian and a political commentator, is to ask the following question—you have to do all of this in secret, of course.  You can‘t tell the world this.  But suppose I said to a general, someone of General Petraeus‘s level of sophistication, secretly, we only have two more years of political mandate from the American people. 

They are going to turn.  The Republicans are going to break.  I can‘t give you more than two years.  What, general, can you get done in two years that is going to make that country better for the world and for us?  Can you ask the military to make those kind of decisions?  What can you do in three years?  What can you do in 18 months?  And make them sort of make those end game decisions?  Can you do it? 

WEST:  Yes, you can, because at some particularly point General Petraeus or any other general would say, all right, you‘re telling me that then I‘m going to start moving more towards advisors and less to our own combat units.  But give me 18 months or so.  Don‘t pull the plug on me.  Give me warning on what you are going to do. 

MATTHEWS:  I wish we had leadership like this.  I think—I am not president and I can‘t tell the president what to do.  It seems to me he ought to make a decision, rather than just carry this fight until his last day as president, and then dump it on the lap of Hillary or Rudy to have a plan.  Go ahead.

WEST:  We don‘t know that that isn‘t exactly what the president will do starting in the fall. 

MATTHEWS:  We don‘t.  Hey, thank you.  Thank you Bing West.  What a great report with “Atlantic Magazine.”  Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now it‘s time for “TUCKER.”

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

END   

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