updated 7/13/2007 11:21:07 AM ET 2007-07-13T15:21:07

Guests: Sen. Kit Bond, Sen. Dick Durbin, Karen Hanretty, Ed Schultz, Tony Snow, Tom Andrews, Ed Rogers, Jonathan Allen, Ezra Klein, Jim Matthews

MIKE BARNICLE, GUEST HOST:  President Bush gives a news conference and says he believes we can succeed in Iraq.  But after the fifth summer of war, will Americans believe him?

Let‘s play HARDBALL.

Good evening.  I‘m Mike Barnicle, in for Chris Matthews.  Welcome to HARDBALL.  The Bush administration report on the progress in Iraq, an interim assessment required by Congress, was released today, showing mixed results.  At a news conference this morning, President Bush talked about the report and took a direct shot at his war critics.

(BEGIN VIDEO CLIP)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  When we start drawing down our forces in Iraq, it will be because our military commanders say the conditions on the ground are right, not because pollsters say it‘ll be good politics.

(END VIDEO CLIP)

BARNICLE:  We‘ll talk about the politics of Iraq with Senators Kit Bond and Dick Durbin in a moment.

In other news, a new intelligence report warns that al Qaeda is regaining its pre-9/11 strength, a claim the president denies.  But after fighting the war on terror for almost six years, are we any safer today?  More on this later on.

Plus, can we reverse the violent chaos in Iraq?  That‘s our HARDBALL debate tonight.

But first, HARDBALL‘s David Shuster has this report on the politics of Iraq.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  At his news conference today, the president was defiant, declaring that the Iraq war continues to be a crucial fight against terrorists.

BUSH:  The strategy has got to be to help this government become an ally against these people.  What happens in Iraq—and I understand how difficult it‘s been.  It‘s been hard.

SHUSTER:  Today it became even harder for the American people to support the Bush strategy because of a new administration report.  It said Iraq has made satisfactory progress in just 8 of 18 benchmarks.  Quote, “The security situation remains complex and extremely challenging.  The economic picture is uneven, and political reconciliation is lagging.”

BUSH:  Those who believe that the battle in Iraq is lost will likely point to the unsatisfactory performance on some of the political benchmarks.

SHUSTER:  Actually, most of the political benchmarks were unsatisfactory.  And on the key issues, including oil revenue sharing, deba‘athification and writing a new constitution, the report said the Iraqi government has made no progress.  The report did find some progress in Iraqi security efforts, and the president used that as a reason to be optimistic about the overall situation.

BUSH:  We have felt all along that the security situation needed to change in order for there to be political progress.

SHUSTER:  But last year, the president said the reverse.

BUSH:  When this government begins to send messages that we will put law in place that help unify the country, it‘s going to make the security situation easier to deal with.

SHUSTER:  Today, as he has in the past, the president urged Congress to wait a  while longer before making any judgments.  And the president repeatedly pointed to a crucial report that will come in September from the top U.S. commander.

BUSH:  I will rely on General Petraeus to give me his recommendations for the appropriate troop levels in Iraq.  But the idea of telling our military how to conduct operations, for example, or how to, you know, deal with troop strength is—it‘s—I don‘t think it makes sense.

SHUSTER:  But last fall, the top U.S. commander for Iraq at the time dismissed the idea that sectarian violence could be stopped by surging the number of U.S. forces.

GEN. JOHN ABIZAID, FORMER CENTCOM COMMANDER:  No, I do not believe that more American troops right now is the solution to the problem.

SHUSTER:  And General Abizaid went even further by testifying he had spoken with every division commander in Iraq, and they all agreed with him.  Abizaid was replaced, and the escalation was implemented.  And yet today, when it came to deferring to the military...

BUSH:  And I think a lot of people understand we got to wait for the generals to make these military decisions.

SHUSTER:  While the news conference largely focused on Iraq, the president was asked about his decision in the CIA investigation to keep Scooter Libby, Vice President Cheney‘s former chief of staff, from going to jail.

BUSH:  It‘s been a tough issue for a lot of people in the White House, and it‘s—it‘s run its course, and now we‘re going to move on.  Wendell?

SHUSTER:  President Bush was also asked about new threats from al Qaeda.  The president said the terror organization is a key reason to keep the Iraq war going.

BUSH:  My attitude is we ought to defeat them there so we don‘t have to face them here.

SHUSTER:  But he later said we may face them here anyway.

BUSH:  ... that al Qaeda‘s a serious threat to our homeland, and we‘ve got to continue making sure we‘ve got good intelligence.

SHUSTER:  Democrats today hit hard.

SEN. HARRY REID (D-NE), MAJORITY LEADER:  But it‘s not surprising that al Qaeda has been able to reorganize and rebuild because the administration has taken its eye off the ball when it comes to fighting terrorism.

SHUSTER:  And one Democrat accused Republicans of being spineless about Iraq.

SEN. DICK DURBIN (D), ILLINOIS:  But while we‘re waiting for the Republican senators to build up their political courage, the casualties are building up in Iraq.

SHUSTER:  But President Bush maintained that pulling out of Iraq is short-sighted, even as he acknowledged the political difficulties in keeping the war going.

BUSH:  There‘s war fatigue in America.  It‘s affecting our psychology. 

I‘ve said this before.  I understand that.  It‘s an ugly war.

SHUSTER (on camera):  To that end, the U.S. military today announced the death of another U.S. soldier killed in Iraq.  That raises the overall U.S. death toll in the war to 3,611.

I‘m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

BARNICLE:  David Shuster, thanks very much.

Republican senator Kit Bond of Missouri sits on the Appropriations and Intelligence Committees and is a strong supporter of the president and his policies in Iraq.  Is that a fair assessment, Senator?

REP. KIT BOND (R-MO), APPROPRIATIONS COMMITTEE:  Oh, I‘m a strong supporter of the troops in Iraq and our mission there.  I think the president has the right approach now.  This counterinsurgency strategy that General Petraeus is implementing along with the surge is beginning to make real progress in bringing security to areas previously controlled by al Qaeda.  So yes, I think this is essential for the long-term safety of the United States, as well as peace and security in the Middle East.

BARNICLE:  Senator, the president this morning—and you‘re from Missouri, and you‘ve lost 63 young men and women in Iraq, 13 in Afghanistan.  The president this morning in his press conference said, and I‘m quoting here, “The real debate over Iraq is between those who think the fight is lost or not worth the cost and those who believe the fight can be won.”  Do you think this fight can be won?  And could you please define what winning means?

BOND:  Yes, I think it can be won.  I‘ve talked to a lot of troops in the field.  I was in al Anbar and around the rest of Iraq two months ago, talking to he Marines and soldiers in the field, their commanders.  We believe that victory, which is first—the first step is securing the country from the al Qaeda assaults and establishing an Iraqi security force of army and police that can contain and assure security, which is the first step prior to—or preceding establishment of the political reforms that the Iraqi government needs to proceed.

BARNICLE:  And yet these steps that you just described as perhaps being steps on the road to what you just said would be victory seems to be a weight being borne by a lot of Republican senators, your fellow Republican senators, who are walking away from the president and his policy in Iraq.  How is that—how is that working out within the caucus?  I mean, what‘s happening within the Republican Party in terms of its support for President Bush?

BOND:  Well, I think the important thing is the people who are really supporting it are the troops on the ground.  And obviously, I can understand why some people are concerned about it.  By and large, the vast majority of Republicans continue to stand where I stand, which is with the troops and the mission.  And you can—with the—all of the negative coverage that has come out of Iraq, it‘s not surprising.  There are always negative things that happen in a war.  But in this war, for some reason, the positive aspects have not been covered.

BARNICLE:  What are the positive aspects with regard to the Iraqi government?  What are the positive aspects?

BOND:  Well, the positive aspects, I‘ll tell you quite frankly, are in

achieving security.  Ramadi just several months ago was the stronghold of

al Qaeda.  And Marine General Gascon (ph) and his troops have gone in there

with the Iraqi security forces, cleaned out al Qaeda, because they have the

whole-hearted cooperation of the Sunni tribal chieftains, who control the

provinces, the provincial areas within Ramadi.  And when we drove to the

center of Ramadi, which used to be a denied area, even for heavily harmed

troops, four members of Congress walked around the firecracker (ph)

corridor (ph).  We had a general and two Marines with M-16s, but we walked

we walked around that area, and we saw that the situation has changed.

Since then, we‘ve heard that there‘s tremendous progress in Fallujah. 

They are continuing to make progress in Diyala, in areas of Baghdad, and they are successfully rooting out and hunting down al Qaeda.  They‘re not just chasing them out.  And unlike the previous strategy, which was make forays in and kill a few al Qaeda and leave, letting al Qaeda return, they‘re now establishing joint command posts with American troops and Iraqi security forces to maintain peace.  And that‘s the precondition for establishing peace and security throughout the country of Iraq.

BARNICLE:  Senator Kit Bond.  Thanks very much, Senator.

BOND:  Thank you, Mike.  A pleasure to talk with you.  And go Cardinals.

(LAUGHTER)

BARNICLE:  Illinois senator Dick Durbin is the Democratic whip.  He sits on the Appropriations and Judiciary Committees.  Senator Durbin, did you get a chance to listen to the president this morning at  his press conference?

SEN. DICK DURBIN (D-IL), APPROPRIATIONS COMMITTEE:  I did.

BARNICLE:  What‘d you think?

DURBIN:  It was a worn-out script we‘ve seen and heard so many times before.  The president says just a little more time, just a few more months, just a few more American lives, and things are really going to get better in Iraq.  You know, I think our patience has been worn thin.  This is the fifth year...

BARNICLE:  Do you think—do you think the president...

DURBIN:  ... of this struggle...

BARNICLE:  ... is delusional?

DURBIN:  I think the president‘s out of touch with the reality of what‘s happening in Iraq.  I really have friends there who e-mail me from the Green Zone.  I follow the press very carefully.  And I‘ll just have to tell you it‘s a sad situation, a tragic situation when you consider the American lives that are being lost, 3,611 casualties as of this morning, 125 from my home state of Illinois.  I drop notes where I can, attend funerals when I can.  It‘s heartbreaking.

I go out to the military hospitals to see these veterans returning, and I‘m saying to myself, Would we have ever entered this war if we‘d have known at this moment in time we would be putting our troops in the middle of a civil war in Iraq, frankly, in a war that‘s been waged for almost 14 centuries?  Never.  We never would have agreed to that.

BARNICLE:  Senator, has it happened to you—you mentioned the funerals that you attend back in your home state of Illinois.  Has it happened to you that the parent, a mother or a father of the dead soldier, asks you point blank, Why did my son die?

DURBIN:  Yes.  Yes, it has.  But by and large, I will tell you they‘re all very proud of their sons and daughters, as they should be.  These are men and women who gave their lives for their country and for their fellow fighting men and women.  They have justifiable pride in the contributions that they have made.

But over time, I‘ve been contacted by families who‘ve asked me that very question.  Why?  Why does this war continue?  Why are more lives being claimed?  I tell you, I even have more families come to me when they‘re fearful that their guardsman is about to be reactivated and redeployed for the second and third time, saying, you know, How many more times is this going to happen?  I can just tell them point blank that unless Congress takes the leadership on this issue, I‘m afraid this president will continue this war until he leaves office.

BARNICLE:  So now the ball‘s in your court.  Senator Reid, the majority leader—Democrats are in control of the Senate, technically.  I realize it‘s quite narrow.  What are you going to do?

DURBIN:  Well, we have to count on the Republican senators who‘ve spoken out.  On the Senate floor, back in their home states, they‘ve said that they‘re dissatisfied with the president‘s policy.  It took real political courage for them to do that.  Now they have to step up and vote with us.

You know, there are going to be a lot of options, a lot of amendments, a lot of things being proposed.  But the bottom line is, if they really want to change the policy in Iraq, there are very few options.  The best, of course, is one offered by Senator Levin, Senator Jack Reed of Rhode Island.  It‘s a timetable.  In 120 days, American soldiers start coming out of Iraq.  By April 1 of next year, our combat function has ended.  We have specific responsibilities to stop al Qaeda, protect our troops as they leave, and to train the Iraqis.  But after that period of time, massive numbers of combat soldiers from the United States will be redeployed to safe places.

That‘s the amendment that counts.  So many of those who‘ve spoken out at home, eight (ph) Republicans who‘ve said they want to change the policy, I‘m afraid they believe that if they vote for anything back here in Washington, that‘ll be enough.  But the voters are a lot smarter than that.

BARNICLE:  Senator, quickly, you said you listened to the president‘s press conference this morning.  Do you the country is listening to this president right now, at this point in time?

DURBIN:  They‘re not paying close attention to his words because, frankly, they‘ve heard them before.  It‘s a situation where the president has lost the confidence of the American people.  He‘s out of touch with the way they feel about this war.  He really believes that we can stay for some period of time and see an outcome that‘s going to be significantly different.

I don‘t think that outcome is going to occur until we start to leave.  At that point in time, the Iraqis have to get serious about the political solutions, serious about the security.  And the surrounding countries in that region have to understand that if they don‘t step in and help to stabilize Iraq, it could be at their own peril.

BARNICLE:  Senator Dick Durbin.  Thanks very much, Senator.

Coming up: Can President Bush convince his party to wait until September on Iraq?  White House spokesman Tony Snow will be here.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH:  I—I‘m—I guess I‘m like any other, you know, political figure.  Everybody wants to be loved.

(END VIDEO CLIP)

BARNICLE:  Welcome back to HARDBALL.  That was President Bush from this morning‘s news conference.  Karen Hanretty is a former spokesman for Governor Arnold Schwarzenegger and Ed Schultz is a radio talk show host.  And both of you—both of you watched the president‘s press conference this morning, so I‘m going to drop the starter‘s flag right here.

(LAUGHTER)

ED SCHULTZ, RADIO TALK SHOW HOST:  I don‘t even need an engine!

(LAUGHTER)

BARNICLE:  Delusional or not delusional?  You tell me.  You start.

KAREN HANRETTY, FORMER SCHWARZENEGGER SPOKESWOMAN:  I thought the timing was interesting, coming on the heels of—you‘ve got two very important Republican senators, Lugar and Domenici, who are starting to break from the White House.  I thought today‘s—the timing of the press conference was really important.  I think it gave a little bit of relief to a few of these Republican senators who are saying, You‘ve got to give us something if you want us to continue to support you, at least now through September.

SCHULTZ:  Mike, he‘s in trouble with the American people.  He goes on the stump in Cleveland, talks about jobs, health care and things that he can‘t do anything about right now because his domestic agenda is completely dead.  Then he then comes out and holds a press conference today.  I thought the president did exactly what he does the best.  It was almost like being on the stump.  He was aggressive.  He was very determined.

But it doesn‘t sell anymore.  There‘s polls out there that say that 46 percent of registered voters want this man impeached.  The Democrats are behind the curve.  They need to get with the American people and get aggressive.

BARNICLE:  So I asked—I asked Senator Durbin this in the last segment—and you listen to the public each and every day.  And you‘re listening to the public, in a sense, each and every day—smaller portion, people on the bus or whatever.  But do you think people are actually listening to this president?

SCHULTZ:  No.

BARNICLE:  Are they hearing him?

SCHULTZ:  No, I don‘t think so.  I think it‘s a tired act.  It‘s an old act.  It‘s the same old stuff.  He‘s basically trying to buy some time until September 15.  But I said this back in January.  This isn‘t the only surge.  There‘ll be more.  Nothing will change.  And for the Democrats to sit around and wait to get 60 votes and then have to get—they‘re going to have to get 67 because this guy isn‘t going to change.

BARNICLE:  Karen, let me ask you a question.  The president this morning in the press conference basically said, paraphrasing now, you know, We‘ve got to let the generals decide this.  The generals are going to come back.  General Petraeus is going to come back.  He‘s going to decide it.  We‘ve got to listen to the generals.  We can‘t let Congress run this war.

And, yet, General Shinseki was, you know, Army chief of staff.  He, said several years ago, you need 500,000 soldiers.  He didn‘t listen to him.  I mean, it doesn‘t play well.

HANRETTY:  Well, here‘s—here‘s, I think—I think, politically, what will be interesting to watch is, in September, when Petraeus goes before Congress and testifies, this is a man who was overwhelmingly, unanimously endorsed by the U.S. Senate. 

When he gets—he when goes before there—he has a lot of credibility.  Certainly, here in Washington, he has a lot of credibility...

BARNICLE:  Yes. 

HANRETTY:  ... and within the media. 

When he goes before the U.S. Senate, and you have got, whether it‘s Barbara Boxer or Dick Durbin, and they are questioning his authority, and they are questioning what he has seen on the ground, I think that is when the politics really fires up. 

And I—I want—I agree with Ed that, to the...

(CROSSTALK)

HANRETTY:  ... extent—I know—to the extent that...

(LAUGHTER)

SCHULTZ:  Told you I didn‘t need an engine..

HANRETTY:  ... that—that...

(LAUGHTER)

HANRETTY:  ... the—what—what the president is saying today, which is, you know, look, if I didn‘t—when he goes out and says, if I didn‘t think we had a chance of succeeding, I would not put troops in harm‘s way, I—I think that it‘s—it‘s a matter—I think that does just wash over people‘s ears right now. 

The president has got to go out—or someone—maybe it‘s John McCain or Joe Lieberman—has to go out and make the case for how is this war winnable.  You can‘t just say, well, it‘s winnable because we have got...

SCHULTZ:  It‘s not winnable.

HANRETTY:  ... because we have got eight out of 18.  You have got to explain how.

SCHULTZ:  Karen, there are seven retired generals that have been there, done that, that have come home and said, this isn‘t going to work.  It‘s a failed policy, failed strategy.  We need to change. 

John Murtha was talking redeployment two years ago.  Now the American people, there is an undercurrent that impeachment proceedings should start. 

That is serious, Mike.  Half the American people are there.  The beltway is not listening to what the heartland is saying right now.

Go ask John McCain how he‘s doing in Iowa.

BARNICLE:  No, I know.

SCHULTZ:  He‘s tagged his wagon to this war policy.  And it‘s failed us—across the board for him.

(CROSSTALK)

BARNICLE:  There‘s also—there‘s also something going on.  You mentioned the beltway having—no matter how you feel about this war, there is something that verges on the obscene about the politics of the war being played out in Washington, while all these funerals are being conducted across the country. 

(CROSSTALK)

HANRETTY:  But I will tell you what also is, I think, obscene to people is the idea that you would conduct a war based on polls, based on—vs. principle.

SCHULTZ:  And the American people have to matter.

BARNICLE:  Right. 

(CROSSTALK)

HANRETTY:  Now, you might not agree with—you might not agree with the president‘s principles, but the idea of—of running a war based on—on polls.... 

SCHULTZ:  The American people have to matter.  And he has been totally arrogant to their feelings. 

BARNICLE:  Ed Hanretty, Karen Schultz, thanks very much.

(LAUGHTER)

BARNICLE:  Up next: White House Press Secretary Tony Show.  Can President Bush convince Republicans to stick with him?

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

BARNICLE:  Welcome back to HARDBALL.

President Bush went on the offensive today, defending his Iraq policy, and rejected growing Republican defections on the war strategy. 

Joining us now is White House Press Secretary—Press Secretary Tony Snow. 

Tony, the divisions in the Republican Party, tell me about the weight that is being carried by the White House on that.

TONY SNOW, WHITE HOUSE PRESS SECRETARY:  Look, I think everybody understands, Mike, that there‘s a lot of controversy and people are unhappy with the war.  A lot of people want us out.  Republican politicians are hearing that from constituents. 

But it‘s interesting, because, if you listen to a lot of the same Republican politicians, they‘re not aiming at getting out.  They‘re aiming at trying to figure out how to win.  And, in that sense, they‘re on the same page with the president.

What the president outlined today was really the—the beginning of a fully operational surge.  We got the last forces in about three weeks ago.  And, so, you have got to look at where things stand now in Iraq. 

And Congress, when it wrote this law two months ago, said, “Tell us where you stand when you get operational, and, then, two months later, tell us how much you have progressed and what you think we need to do.”

I think what the president did today is tell Americans something maybe they hadn‘t have heard a lot of, which is, since we have gone in with the surge, there has been considerable success on the security side. 

And let‘s face it; you‘re not going to have political progress if politicians are worried about their very existence, if they‘re worried about their survival, and, furthermore, if they‘re worried about sectarian violence.

Fortunately, sectarian violence is down.  The casualty counts are down.  So, there is now a little bit of breathing space, and it is up to the politicians now to take some of the next steps. 

BARNICLE:  Boy, Tony, you are good.  You are good.  I mean, you can—you can just throw this stuff.  You know, and I‘m sitting here, I‘m listening to you, and I‘m nodding my head.  But let me ask you...

SNOW:  Well, it‘s because it‘s true. 

BARNICLE:  Well, let me ask you about the president‘s use of the word “win.” 

SNOW:  Yes. 

BARNICLE:  He used it again today, in terms of what this fight is all about, the political fight is all about. 

What does the president mean by “win” in Iraq? 

SNOW:  Yes.  Sure.  That‘s a good question. 

By winning in Iraq, it means an Iraq where the Iraqis are in primary control of all the major parts of their government.  They will—they will be primarily in control of security.  They will have a political system that guarantees full participation and political liberties.  They will have an economy where people can start thinking about how to build a better future, rather than how to dodge the al Qaeda terrorists next door. 

Now, Americans may be in support roles to help them out, you know, there‘s the Baker-Hamilton model, which is, you go back over the horizon to provide support.  But the Iraqis themselves will be in charge of all of the major aspects of their government. 

BARNICLE:  You know, Tony, we‘re both old enough that we remember, you know, the debate and the divisions in this country around Vietnam.  Then, it was hawk vs. dove.  And, yet, it seems a bit different. 

If you listen to the debate in the Senate, or if you listen to the dialogue in the country, it‘s not hawk vs. dove so much, as it is reality-based people against those people who—you know, not to say that the president is—is delusional—but who are off there thinking that this can still be done, that this can still be won. 

SNOW:  No, actually, I contest it.  I think what people have tried to do is to present the president as not knowing what‘s going on. 

Nobody—look, I have got to tell you, Mike, neither you nor I get the detailed briefings the president gets.  He knows what‘s going on.  But he also understands that the American—a couple of things.

First, the American people don‘t want to lose.  They want to make sure that the investment in Iraq pays off in a country that is free.  They want to make sure that al Qaeda does not get jeering rights later on, so that it can recruit on the basis of Americans leaving before the job is done. 

But, also, Americans are skeptical.  They want to figure out, “OK, if you‘re going to win”—you asked me what the definition is—“how you going to do it?”

And I think we have laid out part of it.  I think part of it is, there‘s an information gap, and we need also to surge information to the American people, so they get a fuller picture of what‘s actually going on.  Then, people can decide where they think it all stacks up.

For instance, a lot of folks say, “You know, if the Iraqis would only step up.”  They‘re taking three to four times the casualties and fatalities on the front lines of the battlefield that we are now.  They have already put the vast bulk of their budget this year into economic reconstruction.  They‘re putting their money where their mouth is.

In other words, they‘re starting to take the steps that most Americans would expect them to take.  Meanwhile, American forces have had success, because, for instance, in Anbar Province, when the locals figured out that they could rely on the U.S. and the Iraqis, what did they do with al Qaeda?  They said, “You‘re out of here.”

In other words, when they had a choice between al Qaeda and a democratic alternative, they chose the democratic alternative.  And a province that was written off last November now is one that has stirring success stories in terms of democracy and putting al Qaeda to root (ph).

So, I think the president‘s going to be able to describe in terms that people understand, and we also need to provide more—a larger factual basis for our case on why this is absolutely vital.

BARNICLE:  Tony, I would be remiss before we let you go if I didn‘t ask you, how are you doing?  How are you feeling?

SNOW:  I am doing fine.  You know, Mike, I‘m a very lucky guy.  As far as I know—we have taken some CAT scans recently—I think my cancer, at the very worst, is in remission, and maybe we‘re also putting it to flight as well.

So, thank you very much.  I really appreciate your asking.  I‘m doing fine.

BARNICLE:  Well, you look terrific in your new briefing room down there, in, you know, your new surroundings.

SNOW:  It‘s pretty spiffy, isn‘t it?

BARNICLE:  Yes. 

(LAUGHTER) 

BARNICLE:  It‘s all for the media.

SNOW:  OK.

(LAUGHTER)

BARNICLE:  Tony Snow, thanks very much.

Up next, tonight‘s HARDBALL debate:  Is the instability in Iraq irreversible? 

You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

BERTHA COOMBS, CNBC CORRESPONDENT:  I‘m Bertha Coombs with your CNBC “Market Wrap.”

The stock market surging today—the Dow in new record territory yet again, closing up nearly 284 points, its best point gain in five years—the S&P also setting a new record close today, up almost 29 points—the Nasdaq surging nearly 50 points, to close above 2700 for the first time in six-and-a-half-years—the Dow rallying on good news from retailers, indicating strong consumer confidence.

Wal-Mart, the nation‘s top retailer, reporting a June sales spike of 2.4 percent, much better than expected. 

Takeover news also fueling the rally—Alcoa now a target, after Canadian rival Alcan spurned its $28 billion hostile bid, and Alcan agreed to a buyout by Australian mining giant Rio Tinto for 25 percent more than Alcoa‘s offer.

And higher oil prices pushed the U.S. trade deficit to $60 billion in May, the second highest level this year.

And the euro notched a new high against the dollar for the third straight day. 

That‘s it from CNBC, America‘s business channel—now back to HARDBALL on MSNBC. 

BARNICLE:  Welcome back to HARDBALL.

Today, the president once again stood tough, saying he won‘t bow down to demands to bring the troops home from Iraq.  Much is riding on the continuing military surge.  And the question is, will it get positive results before Bush loses fragile support from his own party?  And is the downward spiral of this war reversible?

Here for the HARDBALL debate is Republican strategist Ed Rogers and former Democratic Congressman Tom Andrews.

Ed Rogers...

ED ROGERS, REPUBLICAN CONSULTANT:  Hey.

BARNICLE:  The press conference this morning, president of the United States, how is he going to keep the Republicans in check here? 

ROGERS:  By having...

BARNICLE:  I mean, people are walking away from...

(CROSSTALK)

ROGERS:  By having press conferences, in effect, pleading, in effect, reminding people over and over there is a logic to his position. 

If things are bad...

BARNICLE:  What is the logic?

ROGERS:  Here‘s the logic.  If things are bad now, what will be accomplished by leaving Iraq to America‘s enemies?  How will that make us stronger?  There is logic to that position. 

There is a rational way to disagree, with the tactics and the plans and the policies that are being pursued now.  But, yes, there is a logic to the Bush position.  It‘s by no means delusional.  And it is based on the best military advice he can get.  Nobody wants out of Iraq more than Bush.  This is not serving him very well. 

(CROSSTALK)

BARNICLE:  Can you see the logic in this?

TOM ANDREWS, NATIONAL DIRECTOR, WIN WITHOUT WAR COALITION:  Well, the logic is exactly the reverse, Mike.

The reason that the—this government‘s intelligence service has released a report that we saw today that al Qaeda is stronger now than it has been since 9/11, fully capable of attacking, fully—fully...

(CROSSTALK)

ROGERS:  And leaving Iraq—and leaving Iraq to our enemies...

(CROSSTALK)

ANDREWS:  Ed, can I finish a sentence?

ROGERS:  ... makes us stronger how?

ANDREWS:  Can I finish my sentence?

It‘s precisely because the resurgence—this Iraq war has been the single most important and powerful recruitment tool.  Eighty percent of the people in Iraq think that they are going to be much better off and safer...

ROGERS:  So, letting them defeat America...

ANDREWS:  ... and safer, if...

ROGERS:  ... would accomplish what?  I‘m asking a serious question...

(CROSSTALK)

ANDREWS:  ... American soldiers were—were to leave, 80 percent.

And 65 percent feel that attacks on our soldiers are fully justified, they feel so strongly about us getting out of Iraq. 

We have put our kids in an impossible situation.  And we have diverted our attention from the real adversary, al Qaeda, that is—as a result of that, have never been stronger.  We have got to change course. 

(CROSSTALK)

ROGERS:  You know, they are not kids.  They‘re brave men and women. 

But go ahead. 

BARNICLE:  You know, Ed, you said that, you know, one of the questions is, does anyone really want to leave—does the United States want to leave Iraq to our enemies? 

And, yet, everyone I have spoken to, both in the media and in the military, everyone who has come back from Iraq, basically say, what you would be leaving it to is—is a balkanized society, where they are intent on killing one another, and might do so, until they are just exhausted, in terms of—in terms of their fight amongst each other, Sunnis vs. Shiites.

ROGERS:  That is a fair observation.  But it‘s not, by any means, accurate in its totality.

Would Iraq—would Iran be stronger?  Would it get a piece of Iraq?  Do we want that to happen?  Would al Qaeda be stronger?  Would it get a piece of Iraq?  Well, of course it would.

America has a cluster of enemy interests at work now to see to it that we fail in Iraq.  Again, leaving Iraq to our enemies, how does that make us stronger?  It doesn‘t. 

ANDREWS:  The Iraqi...

ROGERS:  It won‘t.

ANDREWS:  The Iraqi people are not our enemies.  And, if you listen to the Iraqi people, they are telling us they‘re going to be much better off if we leave than if we stay. 

ROGERS:  No, but that‘s not true.

ANDREWS:  Our enemies—our enemy is al Qaeda.

ROGERS:  But, if they did, we should leave.  If the Iraqi people really said that, we should leave.

ANDREWS:  Al Qaeda wants us to stay.  Al Qaeda wants us to stay in Iraq, because al Qaeda is benefiting from us staying in Iraq.  Our attention is diverted away from where they are.  They are using us as a tremendous recruitment tool. 

And, you know, General Abizaid and General Casey, as they were heading out the door, they said, look, this surge is not going to work.  Why?  You might be able to tamp down some of the violence in some of the neighborhoods, but it‘s going to increase everywhere else.

If you look at the reports coming out of Iraq, that is exactly what is happening. 

ROGERS:  And, so, Tom, you and your crowd...

ANDREWS:  Things are getting worse, not better. 

ROGERS:  You and your crowd say, quit at any cost. 

ANDREWS:  So, if we listened—if we truly listened to the commanders, if we listened to the commanders...

ROGERS:  Quit at any cost.

ANDREWS:  ... if we truly listened to the commanders, we wouldn‘t be in the mess that we‘re in today. 

BARNICLE:  Tom, let me—let me ask you a question, in terms of our leaving Iraq, withdrawing from Iraq. 

Do you think the American public, as—as attuned as they are to this instrument here, television, what would the reaction be here in this country when Al-Jazeera, every night, fed through the tube electronically back to the country, here, would show hundreds of Iraqis being executed if we left? 

ROGERS:  Thousands.

ANDREWS:  Listen, I think that there‘s going to be a civil war in Iraq when we leave.  There is a civil war in Iraq right now.  There is going to be violence when we leave.  There is violence right now.  The question is how many Americans are going to die between now and then?  The violence has not decreased at all in Iraq since we started the surge, but 600 American soldiers are dead. 

We spend 10 billion dollars per month.  That‘s a quarter of a million dollars per minute, and we have made no progress in terms of any of vital interests.   

ROGERS:  Does anybody deserve our loyalty, our commitment, our protection? 

ANDREWS:  When you‘re in a hole, the first principle is stop digging.  The president is saying we have to dig even faster.  Obviously that is a mistake.  Obviously it is getting us even weaker than we have been.  And we are going to get even weaker if we continue down this path. 

And, you know something, Republican senators are beginning to get the message.  In my state of Maine, Olympia Snowe, who has voted for George Bush every step of the way, from the very beginning until now, announced that she is going to be voting for the withdrawal of troops. 

BARNICLE:  One other element of the president‘s press conference this morning is he said he felt that al Qaeda was not as strong today as they were on September 11th or just prior to September 11th.  Yet the Associate Press reports late today that al Qaeda seems to be intent and perhaps is having some degree of success in infiltrating more operatives here in this country for some planned event, god forbid that. 

What do you think of the president‘s assessment of al Qaeda? 

ROGERS:  I don‘t know if they are stronger or not.  I am glad they have such a report.  I‘m glad they have internal skeptics.  I am glad they warn each other that things could be heating up. 

By any standard, the people that have been tasked with protecting America since September 11th, 20001 have done an excellent job.  More of the same out of them is good, not bad.  They have, in a 100 percent rate—they have blocked every attempt to attack America, period, case closed.  They deserve our thanks.  They deserve our thanks. 

ANDREWS:  We‘re fighting the wrong war.  And that counter-terrorism center report that came out today, entitled “al Qaeda better positioned to strike the west.”  For the president to say that he thinks we‘re in a better position against al Qaeda in light of those facts, either this is the same systematic deception of the American people that got us into this mess, or he is in serious, serious—

ROGERS:  And leaving Iraq to al Qaeda, how will that help us defeat al Qaeda?  There is a logic to the president‘s position. 

ANDREWS:  Fight al Qaeda where they are.  And their base of operations is in Afghanistan and Pakistan, which is exactly where we ran from to divert our attention in Iraq. 

(CROSS TALK)

ANDREWS:  -- because we diverted our attention away from where they are.  We had them.  We had—

ROGERS:  There is no intellectual honesty here.  You should blow the whistle. 

ANDREWS:  Are you kidding?  Are you kidding?  We had bin Laden in our sights.   In fact, we had him.  But we diverted our attention to Iraq and that‘s the problem. 

BARNICLE:  Ed Rogers, Tom Andrews, thanks both of you very, very much.  Up next, our HARDBALL round table and today‘s big news.  Plus, how much faith do voters have in the faith of the presidential hopefuls?  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  Welcome back to HARDBALL.  Time now to dig into the top political headlines of the day with our panel: the “American Prospect‘s” Ezra Klein, “Congressional Quarterly‘s” Jonathan Allen, and former Republican candidate for Pennsylvania Lieutenant governor and the good looking brother of Chris Matthews, Jim Matthews. 

JIM MATTHEWS, BROTHER OF CHRIS MATTHEWS:  Thank you very much.

BARNICLE:  First up, rough Iraq report card.  The rough report Iraq report card, he said.  The Bush administration released a report today showing that Iraq has only made mixed progress in reaching key goals, failing to meet ten of 18 different benchmarks.  It cited bleak news on everything from politics to the economy to the military, and pointed to Iran and Syria as agitating forces in the region.  President Bush faced the press today.

(BEGIN VIDEO CLIP)

BUSH:  My attitude is we ought to defeat them there so we don‘t have to face them here. 

(END VIDEO CLIP)

BARNICLE:  Did the president help his case at all today?  Or is it way too late for that?  Jim, up there in Philadelphia, are they waiting for al Qaeda to come in as a result of the president‘s words?  What is going on?  Are people listening to the president of the United States? 

MATTHEWS:  More and more are not listening right now, because, you know, there are two types of people; those who are comfortable with the way things are and those who are looking for things to move forward.  I think right now when you see numbers over 75 percent, 78 percent, in that range, looking to move forward, that is bad for the president.  But I think he gave a good signal today.

In my mind—I‘m like Chris, the glass is always half full.  I would like to think today that when he said—after today‘s story that he did not listen to the CIA director in November of 2006.  Yet today, he said very clearly I will listen to my commanders in the fall if they tell me a government can be sustained. 

So I think he has set up the framework for an exit strategy if he has to use it. 

BARNICLE:  Ezra, when he said that this morning—when President Bush said that this morning, all I could think of was General Shinseki. 

EZRA KLEIN, “THE AMERICAN PROSPECT”:  Right, we have heard hundreds of times that he is only listening to the generals.  He is listening to the people on the ground.  We have had speeches like this dozens of times, press tours where, after every one we have a show like this.  We say, did he help; did he hurt it?  It does not matter what he says.  Iraq is going down for internal structural reasons, because we cannot make the Sunnis and the Shiites stop wanting to kill each other.  We cannot make that country, torn apart, whole again. 

And so he‘ll give his speech.  Maybe he‘ll get a bump in the polls.  Maybe he won‘t.  But at the end of the day, the reason the Republican senators are defecting, the reason we have had eight or nine different votes on withdrawal is because we can‘t put that country back together again.  We‘re not even getting close.  It does not change anything for him to give a speech. 

It is not about what we think here anymore. 

BARNICLE:  Jonathan, was the press conference today—what do you figure, it was to reinforce what‘s left of his support in the country?  Or was it to reinforce what‘s left of his support right behind us here on Capital Hill in the Republican party?   

JONATHAN ALLEN, “CONGRESSIONAL QUARTERLY”:  I think it was more toward Capitol Hill, but also the country.  You know, I talked to a congressman from Indiana yesterday, Republican Mark Satter, who said he could not decide on how to vote on withdrawal.  He is not where his constituents are exactly.  He is trying to decide whether to lead them to where he is, having decided we‘re not making progress, or to follow them where they are.

He said they are locked in a little bit because of the polarizing rhetoric of the president.  The Republican base is still where the president is.  And he has polarized the country.  It makes it difficult to move Republican constituents.  That is a problem some of the House members are having that might want to start moving toward reducing forces.

BARNICLE:  All right, everybody stay right in their place.  We‘re going to be right back with the panel.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  We‘re back with the “American Prospect‘s” Ezra Klein, “Congressional Quarterly‘s” Jonathan Allen and former Republican candidate for Pennsylvania lieutenant governor and the slowest talking member of the Matthews family, Jim Matthews.  

MATTHEWS:  Concur. 

BARNICLE:  Next up, Vitter missing in action; since revelations of his patronage to a D.C. escort service, Republican Senator David Vitter has been ducking and covering.  His reeling news comes in a week when the Senate is fiercely debating a wide range of proposals on the Iraq war.  What would happen in Vitter‘s absence turns out to be a decisive and a key vote on the war? 

Will Republicans revolt and show him the door?  Jim Matthews, Philadelphia; what are they saying in Philadelphia about David Vitter, if anything?  What do Republicans have to say about this guy? 

MATTHEWS:  I guess you could blame it on Bush.  but I would have to say seriously they don‘t want to see our position in the Senate at all compromised right now.  These are very serious times.  And I can‘t help it.  I‘m sorry; when I hear Larry Flynt—this fellow, and I think back to the years, back in the 1970‘s, with Jimmy Carter and his interview in Playboy, where he was lusting after women in his heart.

Now granted Jimmy Carter didn‘t leave his phone number with god when he was lusting with his heart.  But this is, to me, a shame, an incident I‘m sure everybody wishes did not happen.  But it was three years before the gentleman took his seat in the Senate.  And I think we have some very serious business that you‘ve been talking about for the last 50 minutes that demands full attention and full vote. 

BARNICLE:  You know, Jim Matthews is absolutely right.  When you consider the fact that they‘re debating the war in Iraq in both the House and the Senate right now, and this guy missing in action, thus far, this could be crucial to the Republicans. 

KLEIN:  I assume they can call him back, if it gets to that.  But I don‘t know, to some degree, I feel like you‘re exactly right.  What are we doing here?  This is going to sound glib, but why does this matter so much?  This is a Louisiana politician who we are now accusing of ethical indiscretions.  And simply on the list of David Vitter‘s harm to the country, this I wouldn‘t even put in the top 10. 

ALLEN:  Well, you know, Mike, the one thing, in terms of serious policy that is being discussed—it takes 60 votes to do anything in the Senate.  Him being a member of the minority party actually lessens his impact a little bit, because him being absent is the same as him voting no, for all practical purposes at this point. 

BARNICLE:  Jim, but talk about the obscenity of this.  Ezra just mentioned—The Idea that the war in Iraq is going on; funerals are being held across this country on nearly a daily basis, and we‘re talking about David Vitter and some hooker? 

MATTHEWS:  I‘ll tell you right now; I will lead the charge nationally against Vitter if Bill Clinton comes out—and he‘s my Yoda on this, all right, on this moral question.  If Bill Clinton comes out and says he has to go from the Senate.  He can‘t do his job after that transgression, I will lead the charge.  So let‘s get serious. 

BARNICLE:  What is this about this city that it‘s so obsessed with sex scandals, as opposed to the war-based reality.  This is a country at war.

KLEIN:  It‘s a lot more than this country. 

ALLEN:  It‘s out there.  It‘s out there to be reported and discussed.  And, of course, it‘s not just the city, I think the country is interested when something like this happens, maybe not for a week or a month at a time, but certainly immediately.  This is an interesting sex scandal because it involves a hooker.  The reason politicians might see hookers is because they‘re discreet, generally speaking.  And you don‘t pay them to come home with you if you‘re a politician and you‘re rich.  You pay them to leave in the morning. 

BARNICLE:  Of course, you could also make the claim that there is a form of prostitution going on in the city each and every day. 

KLEIN:  This is what I think is more interesting about it.  This is the type of prostitution we‘re looking out when he pays a hooker, and not when the oil companies pay David Vitter.  It‘s a little bit absurd.

ALLEN:  What‘s amazing is the cost of these things, 300 dollars an hour for a hooker.  But it costs 1,000 dollars an hour to get into a PAC fund raiser for Vitter. 

(CROSS TALK)

BARNICLE:  There‘s no easy segue here. 

MATTHEWS:  It‘s personal on my part.  I don‘t like to give the French a reason to giggle at us.  And they have to giggle at us if we make this a big issue.  It‘s wrong what happened.  But enough. 

BARNICLE:  So we‘re going from hookers to religion.  Obama‘s religious edge; a new poll from “Time Magazine,” out this week, shows that voters believe Mitt Romney is the candidate of the strongest faith in the 2008 election.  But right behind him is Democrat Barack Obama.  Remember this moment from earlier in the campaign? 

UNIDENTIFIED MALE:  Welcome to my house.  If I could put it that way. 

SEN. BARACK OBAMA (D), ILLINOIS:  There is one thing I got to say, Sam, though; this is my house too.  This is god‘s house.  I just want to be clear. 

(END VIDEO CLIP)

BARNICLE:  After Obama, John Edwards comes in third, John McCain fourth, then Bill Clinton—or Hillary Clinton, rather, then Rudy Giuliani.  The poll also showed that 38 percent of Democrats believe religious values should guide what politicians do in office; 71 percent of Republicans believe they should.  Does that mean that Obama‘s religious credibility could make him a strong general election candidate?  Jim? 

MATTHEWS:  He doesn‘t get that far.  He doesn‘t get that far because you know that the left and the non-partisan independent have been unnerved for years about the alleged transgressions of the religious right.  So they are unnerved by it.  I think that image hurts Osama—or Obama. 

ALLEN:  Wait, you think Democrats are unnerved by the fact that -- 

MATTHEWS:  No, if someone comes across as a more religious candidate, I think that is more unnerving to a Democrat than it is to a Republican. 

BARNICLE:  Ezra Klein, Jonathan Allen, Jim Matthews, thanks very much. 

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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