updated 7/10/2007 11:33:56 AM ET 2007-07-10T15:33:56

Guests: Sen. Jim Webb, Rep. Steve King, Rep. Chris van Hollen, John Feehery, Mark Green

CHRIS MATTHEWS, HOST:  Washington is wilting, but is Bush tilting?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.

Well, it‘s hot in Washington—good hot.  It‘s not the humidity, it‘s the heat.  And a lot of the heat is this war, this war the country doesn‘t want anymore.  So what you‘re hearing and seeing and feeling in the country‘s capital these days is the sound and sight and temperature of the fifth summer of the war in Iraq the American people backed, according to the polls back then, as long as it wouldn‘t produce significant casualties.

Are 3,600 dead significant?  Is 27,000 wounded significant?  Is this what people reckoned for when they bought the Bush-Cheney plan for peace, stability and democracy in Iraq, when they saluted the president‘s call to put the American Army in the middle of Arabia?

So now, just maybe, we‘re nearing the boiling point.  The Republican pressure  on the president on Iraq is building.  Will Democrats now seize the moment?  The White House denies it‘s debating a troop withdrawal, but even the president‘s leader in the Senate, Mitch McConnell of Kentucky, said, quote, “The majority of the public has decided that the Iraq effort is not worth it.  That puts a lot of pressure on Congress to act because public opinion in a democracy is not irrelevant.

Bush‘s low-point ratings—low poll ratings haven‘t stopped him from, of course, flexing his presidential power.  Today he invoked executive privilege, rebuffing Congress by refusing to provide information and even testimony in the investigation into the firing of those U.S. attorneys.  More on that in our HARDBALL debate tonight.

But first, HARDBALL‘s David Shuster has the latest on Congress and Iraq.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  As defense spending takes center stage in Congress and Democrats ready a series of votes on withdrawing from Iraq, time may be running out for President Bush.

SEN. CHUCK HAGEL ®, NEBRASKA:  If we do not see this administration take some initiatives to make some changes, significant strategic policy changes over the next 90 days, then of course, it will be forced on them.

SHUSTER:  Over the last two weeks, a string of senior Republican lawmakers have spoken out, calling on the president to start bringing the troops home.  The Republicans have declared that the Iraqi government, led by Prime Minister Nouri al Maliki, has failed to meet basic political or security goals.  So far, none of these Republicans have embraced a firm withdrawal deadline.

SEN. RICHARD LUGAR ®, INDIANA:  I‘ll not support a timeline withdrawal that is rigid to the point that I believe it jeopardizes our troops.

SHUSTER:  But the erosion of support for the war has had an immediate impact on the Bush administration.  Secretary of Defense Gates canceled a trip to Asia this week to talk about Iraq policies, and today there were published reports that the White House was thinking of trying to soothe Republicans by announcing the start of a gradual withdrawal.  Not true, according to press secretary Tony Snow.

TONY SNOW, WHITE HOUSE PRESS SECRETARY:  Some of the forces in the surge have just now become operational, within the last two weeks.  It is premature to try to draw any broad-based conclusions on what they‘ve done so far.

SHUSTER:  All of this, however, comes against the backdrop of one of the bloodiest weekends in Iraq since the war began.  On Saturday, more than 150 Iraqis died when a truck bomb plowed into a crowded outdoor market in the northern village of Irmili (ph).  More than 100 homes and businesses were leveled.  And the blast was so extensive that rescue workers needed heavy machinery to sift through the wreckage.

This weekend, the U.S. military announced that eight more American soldiers were killed, bringing the total number of U.S. military casualties in the war to 3,596.

The military also confirmed that in the second quarter of this year, a period coinciding with the troop escalation, 329 troops were killed, making it the deadliest three-month period for U.S. forces in the entire war.

According to the latest poll, more Americans than ever before, 70 percent, say the war is going badly.  The survey also found that the president‘s job approval rating has slipped to 27 percent.  That‘s the lowest ever for President Bush in the CBS News poll.

Democrats believe it all adds up to momentum behind ending the war.  So how are they going to try and do it?  A few weeks ago, House Speaker Nancy Pelosi gave some clues about the proposals to Chris Matthews.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  We are suggesting to redeploy the troops out of Iraq, except to fight terrorism, to train Iraqis to assume more responsibility, and to protect our diplomats and our remaining troops there, which requires a much smaller number, is the way to bring stability to the Middle East.  And I think that it will gain support.

SHUSTER (on camera):  The devil, however, will be in the details.  Key Republicans say they don‘t want to vote on any withdrawal proposals until U.S. military commanders offer their latest round of Iraq progress reports at the end of the week.  In the meantime, support for the war keeps falling as the rhetoric attacking Iraqis for the war‘s failures is on the rise.

I‘m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.  Senator Jim Webb of Virginia sits on the Armed Services Committee and the Foreign Relations Committee.  He‘s a former secretary of the Navy, and today he introduced a bill that required that active duty troops have at least as much time at home as their most recent tour.

Let me ask you, Senator, just on the bottom line, are Democrats going to stop this war?

SEN. JIM WEBB (D), VIRGINIA:  Well, first of all, let me clarify my bill.  It‘s a one-to-one minimum ratio for people who are active duty...

MATTHEWS:  Right.

WEBB:  ... but it‘s 3-to-1 for Guard and Reserves, as well.  If you‘ve been gone for a year, you deserve three years back here.  And honestly, that‘s the minimum we can do—no matter what people‘s politics are about whether we should continue the war, we really need to do this and separate it from the other debate.  With respect to...

MATTHEWS:  But isn‘t this going to slow down the war, not stop it, by reducing the complement of troops we can put in the field?

WEBB:  Well, you know, I think we‘ve reached a point in this occupation—we‘ve been there for more than four years—where we need to start shaping our operational policies, at a minimum, as they relate to the troops that should be properly available, and not the other way around.  We‘ve kind of had the “strategy of the month”...

MATTHEWS:  Yes.

WEBB:  ... here in Iraq, where we get different commanders or different ideas from the White House.  And every time they start a new policy—I won‘t even call it a strategy—like the surge, they turn around and dip into the well and use our people in a way that is, in my view, sort of irresponsible.  So we have, at a minimum, a duty to use these people in a way that comports with their well-being and...

MATTHEWS:  But if this was a war you believed in, Senator, and the American people believed in, we‘d be throwing every person we had at them and keeping them on duty as long as we could, wouldn‘t we?

WEBB:  Well, if this was a war where the national interests were greatly at stake—you know, the Battle of the Bulge—then one could see a justification.  But on the one hand, you‘ve got people even like General Petraeus saying this is going to go on for a very long time.  And then on the other, they‘re going back to the well with a small group of people and using them over and over again.

MATTHEWS:  Yes.

WEBB:  And no one has been standing and up and saying that there‘s got to be a proper minimum amount of time that our people can remain at home.  And we‘re seeing retention numbers go down.  We‘re seeing what I call the canary in the coal mine, with the West Point class of 2000 and ‘01, the two most recent classes that finished their minimum obligation, both of them bailing out in a ratio that‘s five times as high as before Iraq.  So we‘ve got to do this for the wellbeing of the military and for the wellbeing of our troops.

And with respect to whether the Democrats are going to be able to

bring an end to this, I think what we have to do, both sides of the aisle,

is recognize that what people were saying—if I may say what I was saying

three years ago is that we have to get a diplomatic approach to this, and we need to get our troops out of Iraq.

MATTHEWS:  Well, let me ask you about the situation—we just got a report tonight on NBC—I just got it through our sources—that the military now is having such a hard time recruiting people into this war effort, putting people in uniform at the enlisted ranks level, that they‘re now resorting to felons and obese kids and the usual rejectees.  What‘s that going to do to the morale of our troops, to see these characters showing up in the ranks?

WEBB:  Well, you know, I have to say this.  I have—there may be some exceptions that they are allowing in terms of enlistment, but the true focus here is on the high-quality people who have been stepping up again and again...

MATTHEWS:  Yes, but they‘re changing it today, Senator.

WEBB:  Yes, they—well, we‘ve—I‘ve seen some of these numbers, and the Army assures me that these are relatively small numbers.  They are having to expand the enlistment pool.  But—you know, let‘s say you are the number one person who has been enlisted out of the entire country, with the highest ASFAB (ph) intelligence scores and everything else.  You‘re still not being used properly...

MATTHEWS:  Yes.

WEBB:  ... when your—when your commanders won‘t step up and say, No, I can‘t send this person back until he‘s been home long enough to recuperate and to refurbish and to see his family.  And we‘re not doing that, and that‘s a huge human failure, in my view.

MATTHEWS:  What do you make of the complaint coming out of the Pentagon that—they call it the “mommy factor”—mothers are encouraging their sons and daughters not to sign up?

WEBB:  Well, I don‘t know abut that.  I know we‘ve got some really high-quality people who do sign up.  But the thing that I‘ve been saying for a very long time is that in the United States, there‘s a huge body of people who gravitate toward the military—it‘s got nothing to do with politics.

MATTHEWS:  Yes.

WEBB:  They love their country.  They have family traditions.  They like to soldier.  And that puts even a great responsibility on those of us in leadership positions to make sure they‘re used right.

MATTHEWS:  You‘re so right.  You know what, Senator?  I will offer an opinion here, which is if soldiers are going to take orders, that means it‘s all the more important that the orders be the right ones.

WEBB:  Absolutely.  And it‘s the responsibility of everyone in command to take care of the troops, and that‘s really what we‘re trying to do here.

MATTHEWS:  Let me ask you about—you‘re a fighting man.  You‘ve written about war.  You‘ve been in war.  You‘ve been in a civilian capacity as secretary of the Navy.  You‘ve got a tremendous amount of perspective on this situation we‘re in right now.  Here we are in July.  We just passed the 4th.  There‘s talk of a September “gut check.”  Is there going to be a gut check before that, or is September still the big time to decide on this war?

WEBB:  Well, you know, I think September is an artificial date.  Doesn‘t—we can see every day how this is playing out.  Nothing has changed since even before we went into Iraq in this sense, that strategically, putting a large number of ground forces in that part of the world—and particularly on the streets—does not make a lot of sense.

Now, we have to be responsible in terms of how we reduce our footprint in Iraq.  We need to do it in a way that increases the stability of the region, allows us to fight international terrorism, and allows us to focus on our strategic interests elsewhere.

I just got back from a trip to Asia, and I‘ve spent—as you know, Chris, I spent a good bit of my life in Asia in the different second tier countries.  And there‘s great concern over there among American State Department people, as well as government officials in that part of the world, that we‘re turning our back on the most important part of the world for us, strategically and economically.

MATTHEWS:  Yes.  Well, also, you know, al Qaeda is everywhere, in Latin America, as well.  Let me ask you about the politics...

WEBB:  And they weren‘t in Iraq until we got there.

MATTHEWS:  I know.  I know.  That‘s the great horror.  Let me ask you about Virginia.  There was a report in the papers this past week—I just got back and checked all the papers—that Virginia, a state that has always been very pro-military, as you are, very much a state that—a commonwealth that has supported the military—in a political sense on this war is shifting.  How you read that state?  Because your state is very indicative, I think, of the way the wind‘s blowing.

WEBB:  It‘s very much demographically a microcosm of the country.  And when I started running last year, one of the things that I said is that there are a large number of people who went toward the Republican Party on national security issues, including myself years ago, who now are coming back to the Democratic Party because of issues such as economic fairness and because they believe that the Democratic Party also has people who understand national security.  So I think Virginia is very much in play in ‘08, not only at the Senate level, but also at the presidential level.

MATTHEWS:  Are you interested in being president someday?

WEBB:  I‘m doing what I can every day here.

(LAUGHTER)

MATTHEWS:  No, no.  No, don‘t give me a political answer.  Are you interested, Senator, in being president someday?

WEBB:  Not particularly.

MATTHEWS:  That‘s not Shermanesque, but thank you for trying.

(LAUGHTER)

MATTHEWS:  Thank you very much, Jim Webb, senator from—junior senator from Virginia.

Coming up: President Bush invokes executive privilege in the U.S.  attorney fight.  Does the White House have something to hide, or are they just fighting on principle?  What is this fight about?

And tomorrow‘s “Super Tuesday” all day here on MSNBC.  We‘ll have special coverage all day.  We want to hear from you, by the way, this time, interactive.  Take part in our live votes and send us your videos, text and e-mails at Gutcheck—that‘s the name of it—Gutcheck.msnbc.com.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  President Bush is gearing up for a constitutional showdown, and democrats are seething over his decision to assert executive privilege to prevent two former White House aides from testifying about the firing of those federal prosecutors.  Senator Chuck Hagel—actually, Chuck Schumer this time said, quote, “The president seems to think that executive privilege is a magic mantra that can hide anything, including wrongdoing.  Show me an administration that craves secrecy, and I‘ll show you an administration that probably has something to hide.”

Well, is President Bush‘s decision to invoke executive privilege justified, or is he abusing his power?  Democratic congressman Chris van Hollen of Maryland is chairman of he Democratic Congressional Campaign Committee.  That‘s the committee that wants to have Democrats win congressional elections.  And he‘s also a member of the Oversight and Government Reform Committee.  And Republican congressman Steve King of Iowa is a member of the Judiciary Committee.  He joins us by phone.

Congressman King, thank you for joining us.  Why is executive privilege in this case important to the republic?

REP. STEVE KING ®, IOWA:  Well, thanks for having me on, Chris.  And the biggest reason is because the president has to have advisers that know when they advise him they can speak frankly and speak in confidence.  And a president can‘t be concerned that those conversations that are necessary, especially for national defense and for foreign policy, might be subpoenaed before Congress, where they end up all over C-Spans and news and the Internet.  I wouldn‘t want to have a chief staff who was constrained by that, and a president certainly can‘t have.

MATTHEWS:  How broad is this protection, as you see it?  How much can a president keep secret from Congress, every conversation he has with his staff where you say should be sacrosanct?

KING:  Well, I‘d argue that, first of all, the Congress ought to exhaust all of their avenues of getting that information that they want, and they haven‘t done that.  The second piece of this is that they should be exploring potentially a felony or some kind of a crime.  This is clearly a fishing expedition on the part of Congress.  And I sat for hours and hours of Monica Goodling‘s testimony before the Judiciary Committee, and in the end, no matter who they brought out from the A team to come in and ask a question or probe this, there wasn‘t a shred of anything they could hang their hook into, but they still continue to do this fishing expedition, trying to break this White House down instead of governing the United States of America.

MATTHEWS:  OK, let‘s go to Congressman Chris van Hollen.  What is the probable cause here?  What do you believe the White House has done wrong to justify these subpoenas?

REP. CHRIS VAN HOLLEN (D), MARYLAND:  Well, Monica Goodling, for example, in her testimony before the House said that she crossed the line inappropriately in terms of politicizing the judicial system.  The fact of the matter is you now have six members of the Department of Justice who have resigned as a result of this scandal.  You have thousands of e-mails between the White House and the Republican National Committee—this is a serious issue, politicizing the judicial process in the sense of essentially saying to U.S. attorneys, If you go after Republicans in terms of corruption, we‘re going to fire you.  And if you don‘t go after Democrats, we‘re going to fire you.  We need to get to the bottom of this...

MATTHEWS:  OK, Congressman, give this an example, those watching, so we‘ll cut through this.  Give us an example of where you believe they probably broke the law, where they did something really wrong here.

VAN HOLLEN:  Well, I think in the case of...

MATTHEWS:  Give me one example of where a U.S. attorney was fired because he was going after a Republican.

VAN HOLLEN:  Well, the U.S. attorney in New Mexico, Iglesias, certainly feels that that‘s why he was fired, because he was essentially not pursuing a case that both Senator Pete Domenici and Congresswoman Heather Wilson called about.  And there are other examples, as well.

But the point is,  There‘s certainly enough evidence here to suggest that the Congress should look into this further.  They are stonewalling.  They said they‘d send Karl Rove up in a closed session, behind closed doors.  You can‘t keep a transcript...

MATTHEWS:  Right.

VAN HOLLEN:  ... and you can‘t put him under oath.  Now, I understand, given Scooter Libby‘s conviction for lying under oath and committing perjury and lying to the FBI, why they don‘t want to do it.  But the fact of the matter is, it looks like there‘s lots of things they‘re covering.  Thousands of e-mails, again, between the White House and the Republican National Committee, in a situation where you should have, essentially, a sense among the American people that politics is not intruding into the system of justice in this country.

MATTHEWS:  So you‘re saying, Congressman, that Karl Rove, if he were called to testify and accepted the subpoena, would make himself—would jeopardize committing perjury.  You think he‘d have to...

VAN HOLLEN:  What I‘m saying is...

MATTHEWS:  ... commit perjury.  You just said that because you said he‘d do another Scooter Libby.

VAN HOLLEN:  No, no, I didn‘t.  No, I did not say he would do it. 

I can say, I understand their concern, because, in the case of Scooter Libby, who, as you know, was chief of staff to...

MATTHEWS:  Yes. 

VAN HOLLEN:  ... the vice president, he committed perjury. And you have to ask yourself why they are so worried about having someone come testify under oath in front of Congress?

Congressman King, your response? 

KING:  Well, first of all, I don‘t think there‘s anybody out there that can tell me what it was that Scooter Libby said that was not consistent with his—with his deposition. 

I have scanned the news media.  And he was convicted, so I am going to accept Chris‘ word on that, but I don‘t know what it was Scooter Libby said that was not consistent. 

Secondly, there was no underlying crime there. 

Thirdly, I‘m going to say that Iglesias in New Mexico, there‘s plenty of—plenty of reports out there that he was simply dismissed because of incompetence.  And one of those things would be for bungling an electoral fraud case that was right before him in his hand, and the ball was just simply dropped. 

And the next thing I would say is, I don‘t know what it is that Monica Goodling said when—or what she did, if she crossed the line.  These things are allegations.  But, aside from the conviction of Scooter Libby...

MATTHEWS:  Right. 

KING:  ... I don‘t see that any of them are fact. 

(CROSSTALK)

MATTHEWS:  But, Congressman, let me just ask you, from a point of...

(CROSSTALK)

MATTHEWS:  I want a point of consistency here, just for a second, sir.

You said that there was no underlying crime in the Scooter Libby case, when he was convicted by a jury of perjury and obstruction of justice. 

KING:  I mean no underlying...

MATTHEWS:  The U.S. Congress...

KING:  ... underlying crime in the investigation by Fitzgerald.

MATTHEWS:  Right.  Well, let me ask you this.  The United States Congress, led by Republicans, dominated by Republicans, voted and did impeach President Clinton for perjury and obstruction of justice. 

What was the underlying crime in that case? 

KING:  Well, I don‘t think I can...

(CROSSTALK)

MATTHEWS:  No, what was the underlying crime? 

(CROSSTALK)

KING:  ... But he was...

(CROSSTALK)

MATTHEWS:  No, wait a minute.  I want consistency here.

(CROSSTALK)

MATTHEWS:  What was the underlying crime of the president, beyond obstruction of justice and perjury?  You said there has to be an underlying crime to justify a conviction for perjury.

KING:  Well, I would say that Bill Clinton lied to Congress, and during an investigation that was—at least had more merit than is being presented by the chairmen of the Judiciary Committees in the House and the Senate. 

(CROSSTALK)

MATTHEWS:  You are not being consistent, Congressman.  You say there has to be an underlying crime for perjury and obstruction of justice to count, when your party threw the president out of office, basically, on the issue of perjury and obstruction of justice.

And now you are saying, oh, that is not a big deal unless there‘s an underlying crime. 

Bill Clinton‘s underlying crime was his relationship with a White House staffer, a young staffer.  Was that an underlying crime?  No. 

So, what is your standard here?

KING:  I do not believe that Bill Clinton issued executive privilege against the Congress.  And I don‘t think that Congress tried to subpoena people into that thing over the wishes of the president and executive...

(CROSSTALK)

MATTHEWS:  Well, you are changing the subject. 

(CROSSTALK)

MATTHEWS:  I just notice that you threw in that little point there.

(CROSSTALK)

MATTHEWS:  When you throw in these points, like there‘s no underlying crime, and, somehow, Scooter Libby was an innocent here, do you believe he was innocent of perjury and obstruction of justice, Scooter Libby?  The president thought he was guilty.  He said there was a fair jury finding, and he thought prosecutor did his job. 

KING:  I don‘t—I don‘t know what he said, Chris. 

MATTHEWS:  You disagree? 

KING:  I don‘t know.  The news media hasn‘t reported that, that I can find.  And I have gone through pages and pages of research myself.  I‘m still waiting for somebody to tell me what he said that wasn‘t true. 

(CROSSTALK)

MATTHEWS:  Well, if you had paid attention, you would know. 

(CROSSTALK)

MATTHEWS:  Go ahead here.

(CROSSTALK)

MATTHEWS:  We will be right back with Congressman Chris Van Hollen and Congressman King—because, Congressman King, everybody who has been following this case knows exactly what Scooter Libby‘s testimony was, and they saw why he was convicted. 

And later:  President Bush tells Congress he will give them the information they want, just off the record and in private.  Is this going to court? 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

We continue our conversation with Democratic Congressman Chris Van Hollen of Maryland, and U.S. Congressman Steven King, Republican of Iowa.

But, Congressman King, I want to give you a chance. 

Why do you believe, in the end, that the executive privilege is warranted, even when the Democrats have the suspicion that something was done wrong in the firing of these six U.S. attorneys? 

KING:  Well, I think we need to look at this from the historical perspective, is that a president has to have that ability to know that he is hearing in confidence the advice of his closest advisers, and especially in the area of national security and especially in the area of foreign policy. 

And then Congress has to respect that distinction.  And I believe that they have not exhausted all avenues, that they have not pointed to an underlying crime, and they haven‘t justified this fishing trip.

And I would point out, also, that Congress defended that executive privilege when it was William Jefferson who resisted the warrants that were served on his office there on Capitol Hill.  Republicans stood with him.  And I think, if Congress can claim executive privilege, the White House certainly ought to, because they are in charge of national defense and foreign policy. 

MATTHEWS:  What do you make of that, Congressman Van Hollen, that the Democrats stood behind Bill Jefferson when they found the $90,000 in his refrigerator? 

VAN HOLLEN:  Well, the fact of the matter is that Democrats did not do that.  They took immediate action in that particular case.

In the Scooter Libby case, I just think it is important that people know that the judge that convicted him to two-and-a-half years was appointed by Ronald Reagan, President Reagan, and promoted by this president. 

He said two-and-a-half years, and he did not serve a single day...

MATTHEWS:  Yes. 

VAN HOLLEN:  ... less time than Paris Hilton.

Look, on this executive privilege issue, in this case, the president took the position originally that he didn‘t have anything to do with the decision to fire these guys.  In fact, the U.S. attorney general essentially said, for a long time, he was not that involved. 

And, yet, at the same time, they‘re claiming that they have to protect advice they give to the president in a case where he said he was—he was essentially absent. 

MATTHEWS:  Yes. 

VAN HOLLEN:  So, the fact of the matter is, you have thousands of e-mails with the Republican National Committee between Karl Rove and his deputies on this issue.

And, so, it seems to me there‘s a clear case that they over-politicized the issue.  There is ample evidence already of wrongdoing.  And the question is whether they crossed the line into even—even things that are probably—possibly illegal. 

MATTHEWS:  OK, thank you very much, U.S. Congressman Chris Van Hollen and Steven King of Iowa.

Up next, our HARDBALL debate tonight—we already had a pretty good one—President Bush claims executive privilege in the U.S. attorney firings.  Should Congress take him to court?  That means the Supreme Court, ultimately.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MARGARET BRENNAN, CNBC CORRESPONDENT:  I am Margaret Brennan with your CNBC “Market Wrap.”

Here‘s what is happening in this last bit of the trading session.  The Dow Jones industrial average closed 38 points.  The S&P 500 gained one point.  The Nasdaq was up about three-and-a-half. 

It‘s a done deal.  Early polling results show shareholders of both the Chicago Board of Trade and the Chicago Mercantile Exchange have approved their merger. 

Air fares gaining some altitude today—Southwest Airlines, a leading discount carrier, raised the cost of a round-trip domestic ticket by as much as $20, with other carriers following suit.  Airlines say they need to cover those rising fuel prices. 

But the price of Sony‘s newest game console is actually down, in that company‘s attempt to boost sales.  The electronics giant slashed the price of the new PlayStation 3 by $100, to $499 for the 60-gigabyte model.

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL.

President Bush and the Congress are going head to head this week. 

First, the president invoked executive privilege.  He refused to allow testimony from two former high-level White House aides before the U.S.  Congress.  Then, the president‘s first report to Congress on progress in Iraq is due by the end of this week. 

With us now out for the HARDBALL debate over power of the presidency is Mark Green, president of Air America Radio, and Republican strategist John Feehery, who‘s a former top aide to the former Speaker of the House Dennis Hastert. 

Let me go with this, first of all.

Mark, I want you to comment on this.  This is from your senator up there in New York, Chuck Schumer: “Show me an administration that craves secrecy, and I‘ll show you an administration that probably has something to hide.”

OK, Mark, worst-case scenario, what is the president hiding here in not letting his two aides testify? 

MARK GREEN, PRESIDENT, AIR AMERICA RADIO:  First, the issue in the—in the U.S. attorneys case is, where did the nine names come from?  And was it firing for cause or firing for partisan, political reasons, which you are not allowed to do if it‘s involving U.S. attorneys? 

Now, President Bush has said he had no role in it.  OK?  Taking him at his word, then why won‘t he allow his aides to testify, since there can‘t be executive privilege?

Second, on warrantless wiretapping, the president has admitted he did it.  And Attorney General John Ashcroft and Deputy Attorney General James Comey both said it was illegal and they would not continue it. 

So, if you want information on that illegal spying, that—that supersedes the limited, non-absolute right to executive privilege. 

MATTHEWS:  Let me go to you, John.

The point—I think Mark made a good lawyer‘s point there, which is, if the president is claiming a confidentiality of relationships with his aides, which makes sense...

JOHN FEEHERY, REPUBLICAN STRATEGIST:  Right. 

MATTHEWS:  ... and then he denies he had any confidential conversations with them about this, what is his point?  What is his claim of executive privilege, if he wasn‘t involved?

FEEHERY:  Well, you know, I think that Fred Fielding thinks that he has a very good case. 

I think the president...

MATTHEWS:  Well, he‘s got to.

FEEHERY:  The president has decided...

MATTHEWS:  That‘s his job.

FEEHERY:  The president has decided that he‘s got about two poker chips left, and he‘s going all in on this, and he thinks he has got a winning hand against—against the Democrats.  I‘m not going to get into all...

MATTHEWS:  Is this Cheney pushing executive power here again?

FEEHERY:  Oh, I think it‘s a whole concept within the White House, that they want to reassert the executive branch over the legislative branch.  And this is something that Cheney has been interested in.  I think it‘s also the president...

(CROSSTALK)

MATTHEWS:  OK. 

Let‘s talk about the compromise here.  Washington always talks—every time you read an article about Washington, you say, wouldn‘t these people be better off if they could sit down and compromise? 

The Republican compromise here offered by President Bush is, Mark, that they will offer to have Karl Rove, whoever else, all the hot shots, go up to the Hill, sit in the backroom with the important congressmen and senators, and answer their questions off the record. 

Is that a compromise? 

GREEN:  Of course not.  It‘s an absolute win.

President Bush and Vice President Cheney got used to one-party government, obviously, from 2001 to 2006.  That‘s over.  And, when you have a chairman like Leahy, and Conyers, and Waxman, they have a check-and-balance function.

And Cheney, if he got any more secretive, he would be a covert CIA agent.  This guy, he helped author a 1987 congressional report, a minority report, when he was a congressman, which said, often, the president has to have—their words—monarchical power, irrespective of what the law requires. 

Chris, these people are so contemptuous of the law, according to the Supreme Court decisions on the Clean Air Act, Guantanamo Bay, for example, that they will do anything they can to cover up what could be illegal conduct.  So, why trust them?  They—they have not told the truth about going into Iraq, and they have not told the truth about the law.  So, when Fred Fielding says, “Trust us,” that is laughable. 

MATTHEWS:  You know, it‘s easy to knock Cheney, because he is not very lovable, obviously, as a public figure.  He‘s very secretive, as you know.

But, Mark, you had two guys run against him for V.P., Joe Lieberman and John Edwards, and he beat them both in debates.  How do you explain that?  How can your party be so lame that they can‘t defeat the unlovable Dick Cheney in either debate?

(LAUGHTER)

MATTHEWS:  And you know these are facts.  That‘s why you‘re chuckling, because you know I‘m right.

GREEN:  Well...

MATTHEWS:  What is the problem with your party?  It can‘t be Dick Cheney on television.  Come on.  

GREEN:  Well, hold it.  I think most people agree John Kerry beat George W. Bush in a debate. 

MATTHEWS:  Well, you‘re changing the subject.

GREEN:  But that—but that doesn‘t matter.

Mr. Dick Cheney...

MATTHEWS:  You are changing the subject.  Dick Cheney, that...

(CROSSTALK)

GREEN:  OK.  Let‘s talk about it.  Dick Cheney...

MATTHEWS:  Look how mean he looks in that picture.

We showed the worst B-roll we could of him walking along there like a troll, and, still, he beats your guys.

GREEN:  Dick Cheney, Mr. 18 percent, makes George W. Bush look popular. 

As you know, Chris, the articles, the angler, the story of Dick Cheney in “The Washington Post” last week...

MATTHEWS:  Right. 

GREEN:  ... showed him, frankly...

MATTHEWS:  OK. 

GREEN:  ... a radical conservative who has no respect for law...

MATTHEWS:  OK. 

GREEN:  ... and has gotten away with it because of, I think, the war on terrorism scared Americans. 

FEEHERY:  The fact of the matter is, Cheney is smarter than those guys.  He‘s smarter at the levers of power.  I think he‘s smarter on how to protect the country.

MATTHEWS:  And he is going to win on this issue of executive privilege?

FEEHERY:  I think he‘s—no, I think he‘s—he‘s definitely going to win on this issue.  I don‘t think they would do it if they didn‘t think they could win.

MATTHEWS:  Do you think, John, it will go to the courts? 

FEEHERY:  I do.

(CROSSTALK)

MATTHEWS:  And what will the courts say?

FEEHERY:  I think the courts will side on the—decide on the side of the president. 

MATTHEWS:  Separate of powers?

FEEHERY:  Absolutely.

MATTHEWS:  What you think will happen, Mark, if it goes to the Supremes?  

GREEN:  Here, I have to hesitate. 

Seven of nine justices...

(CROSSTALK)

MATTHEWS:  You never hesitate, Mark. 

(LAUGHTER)

MATTHEWS:  You never hesitate.

GREEN:  On the law, executive privilege is not absolute, and they should testify.

But the United States Supreme Court apparently now has four justices who don‘t care about precedent.  Look what they did last week...

MATTHEWS:  Yes. 

GREEN:  ... on segregation, on antitrust. 

MATTHEWS:  You think Kennedy will go with Bush?

GREEN:  Kennedy is the swing vote.  And how Kennedy votes will determine whether George—by the way, this will happen by the—late 2008, which is—Bush is kicking the can down the road... 

(CROSSTALK)

GREEN:  ... until the next president on the war and on this.

MATTHEWS:  So, he‘s playing a delay game?  You think that he can hold out on these subpoenas right until to the end, practically?

GREEN:  He can hold out.  But, as his popularity approaches 25, they are going to lose as many seats in ‘08...

MATTHEWS:  Right. 

GREEN:  ... as the Republicans did in the ‘30s. 

MATTHEWS:  OK. 

GREEN:  That‘s the price.

MATTHEWS:  I have got a plan, Mark.  You guys can hit with the contempt.  He pardons them. 

(LAUGHTER)

MATTHEWS:  Anyway, thank you, Mark Green.

How is that for a solution to the problem?  He pardons the guys who get hit with contempt charges.

Anyway, thank you, John Feehery, once again.

Thank you, Mark, as always.

Up next, our HARDBALL roundtable tonight digs into the Republican revolt on Iraq.  And it is growing.  Plus, will his party stand by him as he bucks questions from Congress on these U.S. attorney firings?

This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now to dig into the top political news of the day.  And here to do it is the “Chicago Tribune‘s” Jill Zuckman, the “Washington Post‘s” Chris Cilizza and Tina Brown, author of the new book, “The Diana Chronicles.” 

First, I want to talk to Tina about your book.  Congratulations, Tina.  I have never seen a book go to first—number one on the “New York Times” best-seller list immediately, and now two weeks running. 

TINA BROWN, AUTHOR, “THE DIANA CHRONICLES”:  It‘s exciting.

MATTHEWS:  I am going to be a little bit weird here now, because I have to be a little bit anti-monarchical, because I am anti-monarchical.  Does the British royal family, such as it is, the so-called Windsors—actually they have a German name, but they call themselves the Windsors, the Sax Girthels (ph) or whatever the hell they really are.  Do they have to—are they trying to inject some good genes into the family?

All they do is marry these beautiful women.  Kate Middleton‘s apparently in the on deck circle now to be married, the next one.  She‘s going to marry Will, or whatever, because she‘s gorgeous.  They married Lady Diana to get the genes so the would kids look good.  You‘ve got Prince Kate, or whatever—Michael of Kent is a knock out.  Do they just—is this all to get a chin in the family?  What‘s this all about? 

Is this what the royal family is up to; keep marrying people with chins until you eventually look like normal people.  Is that with the royal family is up to? 

BROWN:  Certainly Diana injected her great height into the family, because otherwise, as we know, they were somewhat dwarf like.  The fact is that the best thing that William could do, frankly, in terms of the girl herself, is to marry some real horse face duchess, because it is pretty horrible for any beautiful girl to marry into that family, because they immediately become a cover girl.  They become a celebrity and that means that the royal family hates you.   

MATTHEWS:  Why am I, a regular guy, rooting for Kate Middleton?  Because I would rather look at her for the next 30 years than one of the typical Windsors, as they‘re called. 

BROWN:  I think she‘s going to be really good it.  But she‘s going to  become a star, and that will make everybody jealous, all over again. 

MATTHEWS:  Is this the first guy in history, Charles, to dump the knock out for one who is not? 

BROWN:  It is an amazing thing.  In a way, you have to admire Prince Charles for having his, sort of, trophy wife of first and his first wife second. 

MATTHEWS:  That is serving the good wine first, instead of the good wine last, like in the new testament.  Let me ask you a serious question.  Do you buy—Who is this crazy father, this rich Arab guy who owns—what‘s he own, the big store—

BROWN:  Harrods? 

MATTHEWS:  What is his name? 

BROWN:  Mohamed al Fayed.

MATTHEWS:  I do not want to get in trouble with him, but does he have any case at all that there was a conspiracy to kill Diana? 

BROWN:  This is the great ferry story that Mohamed al Fayed keeps peddling.  And I honestly think he believes it to be true, because at this point he has hypnotized himself into believing that it‘s true.  But nothing about the evidence, if you look at it very closely that night, as I have for this book, in any way says that it could possibly be true, that the events of that night were way too chaotic, way too impromptu, way too ill-thought out for this to be a planned death move. 

MATTHEWS:  You do not ask the driver to get drunk and kill himself, which is what he did. 

BROWN:  Exactly.  And also, they kept changing their movements every five minutes.

MATTHEWS:  Let me say this, I understand a father‘s sympathy for his lost son, and I do feel for him, but there is no doubt in my mind if he had been under the protection of the royal family of Britain, whatever else I have said about this, she would still be alive.  She put herself under the protection of an irresponsible guy. 

BROWN:  This was true.  It was Diana‘s worst mistake that she decided to reject police protection, because she believed that the royal protection squad that they were actually spying on her, which of course they may have been, but at least they were protecting her. 

MATTHEWS:  I have to tell you, I love the book.  I love the way you put it together.  He did not chinch out by having a lot of glossy pictures in the book.  You are actually selling text. 

BROWN:  It‘s true.  I try to put it in context, because we have seen a great many sound byte books.  It‘s all been about sort of noise and not much understanding.  I have been trying really to put it into the historical, social context of its times. 

MATTHEWS:  They should sell this at the beach.  They should go up and down the Jersey beach, where I grew up, and they should be selling these, so that you get the sun tan oil with the book.   

BROWN:  I want to see sand in those pages.  That‘s what I want to see.

MATTHEWS:  I think they‘re going to have that.  I‘ve never seen a book move so fast.  But, then again, you are something of a marketer, Tina Brown.

BROWN:  Well, you know, I try to talk it up. 

MATTHEWS:  He are going to join the panel now.  You‘re now one of the people.  You‘re no longer elitist right now.  Join the people.  Jill Zuckman, I want to ask you this question, the president and this war, are we going to see a lot of Republicans guys like Warner begin to peel off and say enough is enough.   This is the fifth summer of hell in Iraq.  We have lost 3,600 people, 27,000 wounded, this is it. 

JILL ZUCKMAN, “THE CHICAGO TRIBUNE”:  We have already heard a number of senators express strong misgivings about the war. 

MATTHEWS:  Will they vote against spending for the war?

ZUCKMAN:  They‘ve been saying hey, we‘re not going to along with the Democrats on these amendments.  I think it is possible there will be a couple.  Senator Olympia Snowe has said she is leaning towards supporting Carl Levin‘s amendment that would get at withdrawing troops. 

MATTHEWS:  Chris, what is holding the Republicans?  Why are they so disciplined at a time of a very unpopular war?  

CHRIS CILIZZA, “THE WASHINGTON POST”:  I‘m not sure they‘re disciplined behind President Bush.  I think they are disciplined within their own ranks, to an extent.  I think what‘s holding them is the fact that they do not see the alternative as being a real alternative. 

MATTHEWS:  Meaning, bugging out won‘t work.

CILIZZA:  Right, in their heart of hearts, they have probably talked to a military commander or two, or 10 or 15, who have said, look, if we pullout now, it‘s going to be chaos. 

MATTHEWS:  I shouldn‘t say bug out.  The Democrats plan, Tina, is to get most of the troops out by April of next year, basically, on a gradual basis.  And leave what Hillary Clinton calls a residual military force in the country to fight terrorism and train and basically force protection, protect themselves.  Is that why the Republicans won‘t go along with that?  Is that too drastic for them to join?

BROWN:  I think that they will eventually go in that direction.  I mean, you see already from the White House the new euphemism, post-surge redeployment.  When you start hearing a phrase like that, you know that behind it hides kind of great embarrassed positions. 

I think the Democrats have actually been really clever.  I think that Reid and Pelosi has been very, very skillful at just, sort of, calibrating how far they can push.  Ultimately, what they really have been pushing for is to really fail to end the war, but they want to be seen to be doing that.  But now they have much more of a chance with these Republican defections. 

MATTHEWS:  Jill, how long will the Democratic base, the people voted to give the Congress, basically, to trust the Democrats to end this war—how long will those people give people like Pelosi? 

ZUCKMAN:  They are angry as hell.  The Democratic base is very, very angry that Democrats have not gotten this country out of Iraq.  And Harry Reid said today, I understands why they are unhappy with us.  They think that we have not gotten anything done because we have not gotten anything done. 

MATTHEWS:  Is that self-abasement going to help? 

BROWN:  I think he has gotten something done.  I think they have.  I think they‘ve been gradually been moving the positions in a very skillful way.  You see people like Kerry and Feingold have been really quite effective.

MATTHEWS:  We‘ll be right back with our panel to see what the difference is between walking and talking.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the “Chicago Tribune‘s” Jill Zuckman, the “Washington Post‘s” Chris Cilizza, and Tina Brown, author of the unbelievable new book, “The Diana Chronicles,” which belongs next to your beach blanket this summer.  There it is. 

Next up, pardon and privilege.  First, President Bush used his power to save Scooter Libby from jail.  Now he is using it to block Congress from talking to his aides.  Judiciary Committees in both the House and the Senate wanted to probe the president‘s staff over the firing of those U.S.  attorneys, the six of them. 

Today, the president invoked executive privilege to stop it.  Will the president‘s power plays trigger a revolt among his own party and the public at large.  Chris Cilizza, is this too much monarchical behavior by this president? 

CILIZZA:  The question is will it trigger a revolt?  I think we‘ve already seen a revolt in part.  It‘s not a full scale, everybody abandoning the battlements, but look at his numbers.  You‘re talking about him being in the 60‘s and 70‘s approval ratings among Republicans.  Usually the president is in the 80‘s and 90‘s.  Think—

MATTHEWS:  Well, is this Janice Joplin time, Tina, Freedom‘s just another word for nothing else to lose? 

BROWN:  It is true that Bush now seems to be in a kind of zone of his own, where he feel that he has nothing whatever to lose, except that doesn‘t apply to all these Republicans up for re-election.  It is remarkable.  In a way, his co-dependency with Cheney seems to be ever more intense.  It‘s one of the most fascinating and mysterious dynamics I‘ve ever seen. 

MATTHEWS:  Co-dependency?  That sounds somewhat clinical. 

BROWN:  Well, it is true.  I mean, it‘s almost as if can‘t abandon the positions of Cheney because Cheney has done his thinking for him for so long.  Without him, where would he go? 

MATTHEWS:  How come people seem smarter when they talk with a British accent.  Do you people come over here with that idea in mind?   

BROWN:  Of course.  We‘ve gotten away with it for years. 

MATTHEWS:  -- girls in the United States because he knows we‘re all delighted by those -- 

CILIZZA:  I‘ve been working on my accent for years for just that reason. 

MATTHEWS:  It works for me, Tina.  What do you think, Jill, about monarchical behavior?  The president‘s pardon authority, by the way, goes back to the monarchy.  That‘s where it came from, back when we started our country.  And we were just reminded by someone on tonight—I think it was Mark Green.  Of course it was—that Dick Cheney in his minority reporting the Iran-Contra Commission report pointed out that the president does, in fact, deserve certain monarchical powers, powers of the king. 

ZUCKMAN:  This administration believes in executive power, and they don‘t believe in allowing any other branch of government to infringe on their power.  So I think that is what has guided them as they‘ve made a lot of these decisions.  But I also think, in terms of Scooter Libby, the president figures, you know, he is going to stick to his guns.  What has he got to lose?  He can‘t go any lower. 

MATTHEWS:  I don‘t think that fits.  I mean, I can be critical of any politician, including the president.  I try not to be personal.  But I don‘t think the pardon of Scooter Libby fits with Bush.  It fits with Cheney. 

BROWN:  I think he has a lot to lose.  I think Libby could write a really good book.  He is an actual writer, as well as being someone who has seen it all.  I think there is a need to keep Libby a little bit quiet, surely. 

CILIZZA:  I think it is in keeping with this one part of it.  President Bush, since the middle of the Iraq war, has made very clear that history is written in the long term, not the short term.  He‘s worried about his long term legacy.  I think he views these sorts of things—I‘m not going to read what the polls say.  I‘m worried about what historians are going to say. 

MATTHEWS:  Tina, I think Scooter sounds more like an agent‘s name than a writer‘s name. 

BROWN:  It is a wonderfully fictional name. 

MATTHEWS:  I can get you 15 percent. 

BROWN:  I still think that Churchill—that Bush has a Churchill complex.  You know, he has a Churchill complex.  He imagines all the time that he is the man, the lonely voice in the wilderness.  And I think he has got his script completely muddled. 

MATTHEWS:  Well, Lynn also took that bark off him this weekend in her piece in the post, I thought, that he‘s no Churchill. 

Next up, Sheehan pounds Pelosi.  Angry war protester Cindy Sheehan is threatening to run against Nancy Pelosi for Congress unless Pelosi brings articles of impeachment against President Bush.  Despite Pelosi‘s popularity, are Democratic incumbents vulnerable for not being tough enough against the president?  And has anger become so severe that the I-word is becoming common parlance?  I wonder, Jill?

ZUCKMAN:  I don‘t think that—

MATTHEWS:  I don‘t think it is for real. 

ZUCKMAN:  I don‘t think most Democrats are in trouble politically because they haven‘t impeached the president.  But Nancy Pelosi, within her district in San Francisco, is not viewed as a liberal.  She is viewed as being somewhat conservative.  That is, in part, because she has been rising up the establishment ladder in the House of Representatives. 

CILIZZA:  I‘ll give you an example.  In 2006, Al Wynn, right here in our backyard, in Prince George‘s County in Maryland, got a really serious primary challenge.  And she‘s running again.  And he is trying to get right with the Democratic party on the war.

I think Jill is right.  I don‘t think Nancy Pelosi is in a lot of trouble from Cindy Sheehan or anybody else, but there are incumbents in the Democratic party -- 

MATTHEWS:  Tina, 10 years from now, when the coast is clear, I, for one, believe—I don‘t like the word impeachment being thrown around, because I think it does involve criminal behavior and I don‘t actually see that.  But in terms of the salesmanship of this war and how we were talked into it, I think there is going to be an historic inquiry as to how this country took its army into Arabia against all common sense in history. 

Your former country, Britain, the French, have all had experiences with trying to occupy Arab countries, all to their destruction.  They were sent out to the last man; they were thrown, or killed.  And now for us to go and repeat that error, it seems to me, is a question of serious historic inquiry.

BROWN:  It is fascinating.  It‘s a kind of group hypnosis, in a way, took over everybody.  It was this post 9/11 paralysis and fear that just made everybody afraid to dissent.  I think that what it showed is how dangerous it is when dissent is stifled by an overwhelming fear, a bit like in the McCarthy era. 

MATTHEWS:  I felt that fear. 

BROWN:  Everyone felt that fear. 

MATTHEWS:  There were all new phrases created, by the way, at that day, weapons of mass destruction, a phrase that came out of nowhere.  Homeland; all of a sudden we started talking like the Russians, homeland. 

Where did this language come from? 

ZUCKMAN:  I wonder how historians are going to go back and put this all together if everybody at the White House wasn‘t using their White House email account.  They were all doing things through other email accounts.  All these things evaporated into history. 

MATTHEWS:  How are we going to do the history if they‘ve got their own email accounts. 

BROWN:  It is also how the world went deaf. 

MATTHEWS:  OK, got to go.  We‘re going to black.  Tina, good luck with your book, “Diana, The Chronicles.”  Thank you Tina Brown.  Thank you Jill Zuckman.  Thank you Chris Cilizza.   A reminder, tomorrow Super Tuesday all day on MSNBC.  Politics, politics, politics.  Send in your video, your text, emails at Politics.MSNBC.com.  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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