updated 7/26/2007 12:27:24 PM ET 2007-07-26T16:27:24

Guests: Steve Israel, Adam Smith, Lance Armstrong, Donna Shalala, Kay Henderson, Jim Lynch

CHRIS MATTHEWS, HOST:  We‘re six months before it all begins.

Tonight, Lance Armstrong gets into the race for 2008. 

From Cedar Falls, Iowa, ground zero for picking our next president, let‘s play HARDBALL. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  Good evening.  I‘m Chris Matthews.  Welcome back to HARDBALL from Cedar Falls, Iowa. 

Tonight, the race is on.  Champion cyclist Lance Armstrong led the pack in today‘s “Des Moines Register‘s annual bicycle ride across Iowa.  Democratic candidate John Edwards saddled up for the ride, while other candidates roamed the state in search of support. 

Lance Armstrong, the winner of seven Tour de France races, is on HARDBALL tonight to make an important announcement that will make a big impact on 2008 the presidential contest.  Lance will join me here in just a moment.

In other big political news tonight, a report by the president‘s commission that was set up following the Walter Reed scandal came out today co-chaired by Bob Dole and Donna Shalala.  It gave the president their recommendations for the care that America‘s wounded veterans from Iraq should be getting.  It came from the White House today. 

Former Health and Human Services Secretary Donna Shalala will join us here later in the program with details on what we are going to do for our wounded veterans. 

Plus, Fred Thompson shaking up his campaign staff already, even on the eve of what is expected to be his announcement of candidacy for president. 

And Rudy Giuliani is again way out front among Republicans in the latest “Washington Post” poll.  He is over 20 points ahead of John McCain. 

But the fight between Senator Hillary Rodham Clinton and Barack Obama is front-page news today.  The two Democratic front-runners are fighting over when a president should meet with dangerous world leaders. 

HARDBALL‘s David Shuster has the report. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, NBC CORRESPONDENT (voice-over):  After months of polite sparring, the front-runners for the Democratic presidential nomination are now in full combat mode.  On Tuesday, during a phone interview with an Iowa newspaper, Hillary Clinton hammered Obama personally and ripped his pledge to meet face to face with sworn U.S. enemies. 

(BEGIN AUDIO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  I thought that was irresponsible, and, frankly, naive to say that you would commit to meeting with, you know, Chavez and Castro and others within the first year.

(END AUDIO CLIP)

SHUSTER:  Within minutes, Obama‘s campaign accused Clinton of producing a fabricated controversy, and Obama himself was soon on with the very same newspaper. 

(BEGIN AUDIO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  If you want to talk about irresponsibility and naivete, look at her vote to authorize George Bush to send our troops into Iraq without an exit plan.

(END AUDIO CLIP)

SHUSTER:  And, late today, Obama hit back again. 

OBAMA:  I think what is irresponsible and naive is to have authorized a war without asking how we were going to get out.  And, you know, I think Senator Clinton still has not fully answered that issue. 

SHUSTER:  The skirmish began Monday night at CNN‘s YouTube debate.  A questioner took note of former Egyptian President Anwar Sadat, whose visit to Israel nearly 30 years ago helped sparked a lasting peace agreement. 

(BEGIN VIDEO CLIP, CNN)

UNIDENTIFIED MALE:  In the spirit of that type of bold leadership, would you be willing to meet separately, without precondition, during the first year of your administration, in Washington or anywhere else, with the leaders of Iran, Syria, Venezuela, Cuba and North Korea, in order to bridge the gap that divides our countries?

OBAMA:  I would.  And the reason is this, that the notion that somehow not talking to countries is punishment to them—which has been the guiding diplomatic principle of this administration—is ridiculous.

(APPLAUSE)

(END VIDEO CLIP)

SHUSTER:  Clinton responded this way. 

(BEGIN VIDEO CLIP, CNN)

CLINTON:  Well, I will not promise to meet with the leaders of these countries during my first year.  I will promise a very vigorous diplomatic effort, because I think it is not that you promise a meeting at that high a level before you know what the intentions are.  I don‘t want to be used for propaganda purposes.  I don‘t want to make a situation even worse. 

(END VIDEO CLIP)

CHUCK TODD, NBC NEWS POLITICAL DIRECTOR:  The Clinton campaign believes their trump card against Obama is experience.  And they see this as an opportunity to expose the inexperience of Obama. 

SHUSTER:  Within 24 hours of the debate, the Clinton campaign had dispatched to cable television their top foreign policy adviser, former Secretary of State Madeleine Albright. 

MADELEINE ALBRIGHT, FORMER SECRETARY OF STATE:  She answered the question in a way that showed her experience and her understanding of the diplomatic process, very sophisticated. 

SHUSTER:  Albright, however, advised Mrs. Clinton four years ago to vote to support the Iraq war.  And that vote by Hillary makes her and her team vulnerable to attacks like these. 

OBAMA:  ... that the time for us to ask how we were going to get out of Iraq was before we went in.

(APPLAUSE)

OBAMA:  And that is something that too many of us failed to do.  We failed to do it.  And I do think that that is something that both Republicans and Democrats have to take responsibility for. 

SHUSTER:  While it is unclear how the Obama-Clinton feud may be playing with primary voters, this is not the kind of story that may help the rest of the Democratic field, because, while some of the candidates, including Richardson, Biden, and Dodd, have more experience, Clinton and Obama are the ones pounding away and getting all the attention. 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  So, here we go.  Thank you, David.

So, the HARDBALL debate tonight is clear.  Should presidents meet with dangerous world leaders?

Congressman Steve Israel is a Democrat from New York.  He‘s for Hillary.  And Congressman Adam Smith from Washington State, he‘s for Obama.

Let me go to Congressman Israel.

Who was right, Hillary Clinton or Obama, about whether we should have gone into Iraq?  Hillary said we should have at least authorized the war.  Obama said the war was bad in conception.  Who was right?

REP. STEVE ISRAEL (D), NEW YORK:  Well, look, you can‘t go back in time.  The important thing here, Chris, is what we‘re going to do in the future.

MATTHEWS:  I‘m doing it.  Congressman, I am doing it right now.  It came up in the debate the other night.  Obama raised the question, if you have vision, why did you take us into Iraq?  That‘s his challenge to Hillary Clinton.

You are on this show as a surrogate for Mrs. Clinton, Senator Clinton. 

Was it visionary to authorize that war in Iraq? 

(CROSSTALK)

ISRAEL:  Senator Clinton did not take us into war in Iraq.  George Bush took us into war in Iraq...

MATTHEWS:  She authorized it.  She authorized it. 

ISRAEL:  ... and took us in that war in an irresponsible way, underfunding the troops, having no diplomatic plan.

The difference between George Bush and Hillary Clinton is that Hillary Clinton has the experience, is able to marshal world resources and world leaders on a plan that will finally bring this thing to an end. 

MATTHEWS:  Why did she authorize to war if she has vision? 

ISRAEL:  Look, Chris, this is a senator who has been working very hard on different ways of getting us out of Iraq.  This is a senator who believes that public diplomacy, particularly at the presidential level, has to be smart; it has to be shrewd.  And that is what she has been advocating. 

Senator Obama has said that he, you know, would meet with anybody, anywhere, at any time. 

MATTHEWS:  Right. 

ISRAEL:  George Bush says that he won‘t meet with anybody for any reason at any time.  Senator Clinton believes you meet with people based on the circumstances that prevail at the time. 

MATTHEWS:  OK. 

Let me go to Congressman Smith. 

Here‘s the question.  Obama, your candidate, he says he wants to meet with Ahmadinejad and the rest.  What are his preconditions?  Does he have any, or he just wants to go meet him?

REP. ADAM SMITH (D), WASHINGTON:  What he wants to do is, he wants to engage.  He wants to make it clear that we are not afraid of diplomacy. 

Where did we get the idea that the United States of America is so inept, that, if we talk to people, we will weaken ourselves?  We have to be smart about what we discuss.  We have to be forceful in putting forth what we want to accomplish.

But what Senator Obama was saying was, being afraid of engagement doesn‘t make sense and has really harmed us.  That has been what the Bush administration has done.  And what he showed in the debate the other night was his willingness to challenge conventional wisdom, to bring about change.  And I think what Senator Obama is...

MATTHEWS:  Well, why is Hillary jumping all over him, then, if it was a smart move?

(CROSSTALK)

MATTHEWS:  Hillary seems to be having a—a victory lap, at his expense, the last couple hours.

SMITH:  Well, not if you read the public opinion polls about where the voters are actually at on this issue.

And I think what Senator Clinton, and Senator Edwards, for that matter, did is, they had the same sort of reflexive reaction that the Bush administration has tried to force upon all of us, which is to say, to reach out to anybody who will—disagrees with us is somehow a sign of weakness. 

Senator Obama showed that he‘s willing to change.  He‘s willing to challenge the status quo and move us forward, and he is not afraid of engaging.  I think Senator Obama is a very smart man.  If he engages in diplomacy, it is going to advance U.S. interests. 

MATTHEWS:  Let me—let me go to Congressman Israel on the bigger question of politics. 

Your candidate, Hillary Clinton, is running for the Democratic nomination for president.  She‘s way ahead in the polls.  Why did she pick a fight with Obama, who is way behind her?  What‘s the politics of this thing?

ISRAEL:  She didn‘t pick a fight with him.  The gloves are not off in this thing. 

MATTHEWS:  She attacked him.

ISRAEL:  This is a—no, Chris.

MATTHEWS:  She attacked him. 

ISRAEL:  Chris, this is a difference of opinion.

MATTHEWS:  She said he‘s naive.  She‘s said he‘s an embarrassment.

ISRAEL:  Listen, here‘s what they agree on. 

They have been lambasting George Bush for a foreign policy that has been reckless.  Hillary Clinton has led the fight lambasting George Bush for a foreign policy that has been reckless, for diplomacy that has been ineffective.  She‘s been talking about her credentials as a first lady, somebody who has relationships with world leaders, who can bring them together to move this country forward, to advance our interests, not weaken our interests, as George Bush has. 

(CROSSTALK)

ISRAEL:  The difference is, when do you meet?

(CROSSTALK)

MATTHEWS:  She voted—because she—she voted to authorize George Bush to make a decision on war.  She trusted him.  And now she is saying that Barack Obama is naive. 

Who is naive?  She trusted Bush not to go into Iraq, when everybody knew he was going into Iraq.

ISRAEL:  Chris, the issue is this.  The statement...

(CROSSTALK)

MATTHEWS:  You knew.  You knew that Bush was going into Iraq, Congressman, didn‘t you?  You always knew he was going into Iraq. 

(CROSSTALK)

ISRAEL:  The statement—if I could answer your question—the statement that we...

MATTHEWS:  I‘m just trying to get an answer.

ISRAEL:  ... you know, we are going to treat public diplomacy like a wedding, where you send the invitations a year in advance, is—is—concerns many people. 

These—again, George Bush says, I won‘t meet with anybody, anywhere, any time, on any issue.  There‘s another view that says, we will meet with anybody everywhere all the time.

(CROSSTALK)

MATTHEWS:  And you call that naive?

ISRAEL:  Senator Clinton‘s view is, we take this on a case-by-case basis.  You have to do it based on the expectation that there will be progress. 

(CROSSTALK)

MATTHEWS:  I don‘t know why your candidate attacked Obama, when Obama is behind. 

But let me ask you, Mr. Smith.  Your candidate has been waiting for a chance to tackle Hillary.  She has given him an opening, because she‘s attacked him.  He has got the opening to attack from a defensive position now.  Is he going to stay in this fight, or is he going to pull back?

SMITH:  Well, what Senator Obama is going to make clear is, he has the judgment to be president of the United States and engage in foreign policy.  

He is not afraid of this debate whatsoever.  He believes in engagement and diplomacy.  And, also, if you read his speech in 2002, before the Iraq war, the prescience of that speech is very impressive.  It shows he has the judgment.  The issue that the Clinton campaign is choosing, and Senator Clinton herself, for that matter...

MATTHEWS:  Right. 

SMITH:  ... is choosing to attack Senator Obama on won‘t fly.  He has the judgment to be president.  

MATTHEWS:  Let me ask you one last time, Congressman Israel, did you think George Bush really was going to use diplomacy and avoid a war with Saddam Hussein? 

ISRAEL:  There are many of us who made decisions based on the intelligence that George Bush presented to us at the time that, you know, in my view...

(CROSSTALK)

MATTHEWS:  No, but did you think he wasn‘t going to war?  Did you think he—Hillary keeps saying she didn‘t know the president was going to war.  She thought he would use diplomacy.

ISRAEL:  There are very few people in the United States...

MATTHEWS:  Did you think that?

ISRAEL:  Look, today, we passed a resolution by a wide variety—a wide margin, Republicans and Democrats, saying that we don‘t want permanent bases in Iraq. 

There are many of us... 

MATTHEWS:  Right. 

ISRAEL:  In fact, I can‘t think of anybody who would say that the decision that the president made ended up being the right decision and was managed the right way.

And that is why Senator Clinton has been leading the battle against his reckless foreign policy and inept management of this war. 

MATTHEWS:  OK. 

Thank you very much, Congressman Steve Israel of New York and U.S.

Congressman—both U.S. congressmen—Adam Smith from Washington State.

Coming up: Lance Armstrong.  He is biking across Iowa. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  And he‘s going to come here in just a moment.  We will be making some big announcement—a big announcement—in just a moment.

You‘re watching HARDBALL from Cedar Falls, Iowa, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Coming up: seven-time Tour de France winner Lance Armstrong.  He‘s biking through Iowa, and he will join us here in a minute.

(CHEERING AND APPLAUSE) 

MATTHEWS:  HARDBALL coming back from Cedar Falls, Iowa.

(CHEERING AND APPLAUSE) 

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE)    

MATTHEWS:  Welcome back to HARDBALL. 

Lance Armstrong is riding across Iowa on a seven-day bike race sponsored by “The Des Moines Register.”  He‘s riding to raise awareness about cancer.

This morning, Lance rode with presidential candidate John Edwards.

Edwards‘ wife, of course, is battling cancer. 

And we have a major announcement to make tonight.  Lance and I will be co-moderating the first ever presidential candidates cancer forum featuring presidential contenders from both parties talking about how best to fight cancer.  That is coming up here in Iowa August 27 and 28. 

Anyway, let‘s talk about that. 

What—why do you want to do that?  I can‘t wait to get involved with that, because I‘m going to ask them all those other questions, too. 

LANCE ARMSTRONG, FORMER TOUR DE FRANCE WINNER:  Are you?  Oh, great.

You know, I think that—I mean, for me, this is the true meaning of war and terror.  And something that claims nearly 600,000 Americans a year is something that we ought to discuss.

I mean, I was just—you read the newspapers today or you watch shows like yours, and you discuss, obviously, the war in Iraq.  You discuss Afghanistan, education, immigration, on and on and on.  I mean, I think that we have real health—health issues in this country, and cancer being the number-one killer for people under the age of 85. 

You know, 1,500 Americans a day, that‘s a huge number.  That number is too big.  And I think that we have some—some logical issues there that can be... 

(CROSSTALK)

MATTHEWS:  Well, let‘s talk about those while we get on it.  Stem cell research, where are you on those issues?

ARMSTRONG:  I mean, I...

MATTHEWS:  Federal money for that?

ARMSTRONG:  I have always been pro-stem cell research.  And I have never—I have never wavered on that, never shied away from that. 

I think that—I mean, I understand both sides of the debate, when you talk about a moral or an ethical issue.  But—but I think, if we have possibilities to research things that can cure and save lives today, that is a moral and ethical issue, and we ought to be doing that. 

MATTHEWS:  We just had Michael Moore on the other night.  And I know he causes noise, but I think he may have found his public, finally, a pretty unanimous view that this country needs to do something about the people that don‘t have any health insurance and the people who have lousy health insurance, or HMOs.

ARMSTRONG:  Right. 

MATTHEWS:  What do you—what‘s your position on those issues?

ARMSTRONG:  Well, certainly, access to care is one of the biggest issues we have.

I mean, if you look at the disease, if you look at cancer specifically, of those 600,000 deaths, 200,000 of them could have been—could have been prevented with better access and better screening.  You know, that‘s—that is a huge number.  A full third of the deaths we could have been prevented... 

(CROSSTALK)

MATTHEWS:  You mean, people walking around now without insurance couldn‘t do anything about it, but they could if they were insured?

ARMSTRONG:  Exactly, or not screened early enough.  So, they come in way too late.  And—and you know what?  I mean, we‘re—we cut money for screening programs, and, then, ultimately, we‘re going to treat people at a late-stage disease? 

MATTHEWS:  Yes. 

ARMSTRONG:  I mean, that—that makes no sense economically, morally, ethically, fundamentally.  None of it makes sense.

MATTHEWS:  OK. 

We‘re going to talk about this August 27, 28, one night the Democrats, next night the Republicans.

ARMSTRONG:  That‘s right. 

MATTHEWS:  And I will be sitting with you.  And you get to start the show, because you are one of the most famous five people in the world, I think...

(CROSSTALK)

ARMSTRONG:  I don‘t know about that.

(LAUGHTER)

MATTHEWS:  Oh, you are.  You definitely are. 

Now let‘s go to screening, the other issue.  The Tour de France today, another cyclist was thrown out, arrested, in fact, a Frenchman.  What do you make of this?  We had the Kazakhstan guy the other day, now the Frenchman, two in a row now.  This one guy, Kazakhstan, failed two drug tests. 

Why are these people entering the race if they know they are going to get nailed?   

ARMSTRONG:  You know, it‘s funny.  I mean, I haven‘t even—actually, it‘s not funny, but I had not even heard the first case you mentioned.

But here‘s what it shows us.  It shows us that cycling has done more than any other sport.  And it also shows us, clearly, that the controls work.  If you are catching guys, obviously, they have a system in place that is working.  But...

(CROSSTALK)

MATTHEWS:  But they are bicycling right into a buzz saw.  I mean, this guy goes home.  They took down all the Kazakhstan flags...

ARMSTRONG:  Right. 

MATTHEWS:  ... all that national feeling from that little country.

ARMSTRONG:  Right.  It‘s terrible. 

(CROSSTALK)

MATTHEWS:  ... humiliated.

ARMSTRONG:  And, if you look at his situation, you have a test or a control that—that was—it was well very known for catching Tyler Hamilton a few years ago, or allegedly catching Tyler.  So, why would he then go out and repeat that—that mistake, when you know is a test?  It makes no sense. 

MATTHEWS:  What‘s going on in sports today.  We got an NBA ref, first time in the history of the major sports—and I know you want to count cycling, but like basketball, football, hockey.

(CROSSTALK)

ARMSTRONG:  ... don‘t want to count cycling as a major sport?

MATTHEWS:  Well, I will make it the big five.

ARMSTRONG:  All right. 

(LAUGHTER)

MATTHEWS:  But the other big four, this is the first time a ref is really up on charges, basically, this guy Donaghy.

ARMSTRONG:  Right. 

MATTHEWS:  I mean, it looks like, you know, he was—he‘s accused of taking bets, of throwing games, including a title game. 

You look at—what are we doing here?  What is going on?  Does everybody want to win so much or make money in sports so much, they‘re not -- they don‘t have any values at all?

ARMSTRONG:  Life is messy, you know?

MATTHEWS:  Life is messy.

ARMSTRONG:  And it‘s interesting.

I don‘t really follow it.  It is funny, because I don‘t follow basketball that much, or baseball, and, of course...

(CROSSTALK)

MATTHEWS:  So, you don‘t follow the whole thing with Barry Bonds and the drug testing...

(CROSSTALK)

ARMSTRONG:  Not much.  I mean, if I pick up the newspaper, I will read about that. 

But I am so focused on—on what we‘re doing at the foundation and with LIVESTRONG, being here in RAGBRAI for a whole week, and—and just talking to people and making sure that—that we go up against problems that I think we can fix. 

MATTHEWS:  You know, it struck me today in the paper that Bud Selig, the commissioner of baseball—he is a friend of mine—he has to go to this thing and watch Bonds break the record.  At the same time, he has to say publicly, I have a personal problem with this, like he doesn‘t believe the guy is qualified to win this thing. 

ARMSTRONG:  I‘m glad I‘m not...

MATTHEWS:  Everybody‘s listening to you.  You‘re like a politician!

(LAUGHTER)

MATTHEWS:  Let me ask you about you and this election out here and the issue of health care.  Do you think any of the candidates have spoken out adequately on health care yet, before your forum coming up here next month?

ARMSTRONG:  Well, I think—I mean, I think you—I mean, you saw in the most recent—the YouTube debate there with the candidates, and especially the Democratic side, you had obviously a lot of health care debate.  I mean, I think they will start to stress that more and more.  That‘s typically more their platform.

But you know what?  If you look at this field of candidates, and if you look at—if you look at Barack Obama, who lost his mother to cancer, if you look at a Rudy Giuliani, a cancer survivor, John McCain, cancer survivor, Hillary Clinton clearly...

MATTHEWS:  Fred Thompson.

ARMSTRONG:  Fred Thompson, cancer survivor, not yet in the race, but we all think will be.  You know, this is a perfect field for addressing certain issues, especially cancer and how we can ultimately defeat the disease.

And you know, I think it‘ll be a big issue.  To me, homeland security is making sure that we‘re all safe and sound and healthy, and that‘s providing the best care, providing the most scientifically advanced care that we can.  And I think we‘ll get there.  I hope so.  And I think that this forum will do that.

MATTHEWS:  What you think of the fact that we have presidential candidates, three or four of them now, that have, certainly, cancer themselves or their wife—their wife has it, in the case of Elizabeth Edwards...

ARMSTRONG:  Right.

MATTHEWS:  ... you know, that sad case.  She‘s fighting it like hell right now.

ARMSTRONG:  Right.

MATTHEWS:  And do you think it‘s people are recognizing the fact that cancer is not something you avoid or you get, it‘s something you deal with when you get it?

ARMSTRONG:  Right.  Well, when you consider the odds, one in two men, one in three women, those are pretty overwhelming odds.  I mean, it‘s interesting.  When you ask Americans—we polled them in 2004 -- What‘s your biggest fear? -- you know, their biggest fear wasn‘t that somebody would drop a bomb on their house.  Their biggest fear wasn‘t that, you know, they‘d have another problem.  The biggest fear was that they would get cancer, by an overwhelming majority.

Then you go and ask them, What are the chances that you will get cancer?  One in a hundred say that they will get cancer.  So it‘s—there‘s clearly some disparity there, too, with the reality of the chances.  But it‘s something that we have to focus on.  And I think that we‘ve spend a lot of money and a lot of time and a lot of energy to date, and we just have to—we have to keep going.  For the—you know, I say all the time, I mean, for the second year in a row, we‘ve cut the budget of the National Cancer Institute, meanwhile cancer deaths are still in the hundreds of thousands.

MATTHEWS:  Yes.

ARMSTRONG:  It‘s not acceptable.

MATTHEWS:  How many miles did you do today out here in Iowa?

ARMSTRONG:  Today we did about -- 50 miles today.

MATTHEWS:  You did 50 miles?

ARMSTRONG:  Yes.

MATTHEWS:  And you‘re not tired?

ARMSTRONG:  Well, the other days we did 70.  So you know, the only

thing—I mean, the thing about—about this great event is it‘s point-

to-point, so when the wind blows one direction, you pretty much know for a

whole week, you‘re going to have a headwind or a crosswind.  So it‘s been -

it‘s been challenging.  But this is...

MATTHEWS:  RAGBRAI.

ARMSTRONG:  RAGBRAI, yes.  It‘s a very interesting event and I...

MATTHEWS:  (INAUDIBLE) total miles you have to ride (INAUDIBLE)

ARMSTRONG:  477.

MATTHEWS:  Four hundred...

ARMSTRONG:  There‘s no winner.  There‘s no...

MATTHEWS:  How many people are running the race?

(APPLAUSE, CHEERS)

MATTHEWS:  We‘ll be right back with Lance Armstrong out here in Cedar

where are we, at Cedar Falls or Cedar Rapids?  We‘re in Cedar Falls.

(APPLAUSE, CHEERS)

MATTHEWS:  (INAUDIBLE) go to our Web site, by the way, Hardball.msnbc.com (INAUDIBLE) -- three of the hottest political YouTube stars, “Obama girl,” Giuliani girl” and the young woman (INAUDIBLE) “Hot for Hillary.”(INAUDIBLE) right now.

You‘re watching HARDBALL from Cedar Falls, Iowa, only on MSNBC.

(APPLAUSE, CHEERS)

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back.  We‘re back in Cedar Falls, Iowa, with Lance Armstrong.  Lance, this is amazing, this part of the country.  Tell me about Iowa and these people and the fact that...

UNIDENTIFIED FEMALE:  It‘s heaven!

MATTHEWS:  ... you got 15,000 bikers out here.  She says it‘s heaven.

ARMSTRONG:  It‘s heaven.  That‘s right.

MATTHEWS:  What is Iowa all about?

ARMSTRONG:  Iowa—well, you know, it‘s interesting.  This is the biggest annual bike ride, this—you know, over a week-long period.  It‘s 10,000 official riders a day.  Some say, some days it swells up to 20,000.  You know, it‘s just an interesting ride.  And you know, even before I came last year for the first time, I mean, I‘d be in the middle of the Tour de France, people would come up and say, You have to come to Rag Ride when you retire.

MATTHEWS:  Yes.

ARMSTRONG:  And so last  year, we came, and this year again, and hopefully, next year.  You know, it‘s just—everybody starts at a different time, you know, different people on bikes.  I mean, there was a guy with a—with a wind sail on his bike today.  There are people that ride two-wheel bikes, one-wheel—unicycles, a four-wheel bike.  I mean, it is—it‘s like...

MATTHEWS:  But there‘s a real politics to this.  You know, Richie Daley, the mayor of Chicago, has made bicycling a big deal in Chicago.

ARMSTRONG:  It should be.

MATTHEWS:  Everybody has (INAUDIBLE) out biking along the lake and...

ARMSTRONG:  Yes.

MATTHEWS:  Is this something that everybody can do?  I‘m really trying to get into this thing here.

(LAUGHTER)

MATTHEWS:  I mean, I...

ARMSTRONG:  Hey, look, I‘m sure...

MATTHEWS:  (INAUDIBLE) five-mile paper route, babe, OK?  I know how to bike!

ARMSTRONG:  It‘s—you know, you see people from all different ages and all different sizes, all different styles of riding.  I mean, I was riding with a kid today, 10 years old.  He‘s doing it every day, every mile of the ride -- 10 years old.  I mean, this kid—he was—barely came up to my handlebars, so...

MATTHEWS:  You know, it‘s still amazing to me that an American won the Tour de France.  Do you pronounce it France or France?  How do you do it?

ARMSTRONG:  I say France, but...

MATTHEWS:  Well, we‘ll say that, then.  But how do you win...

ARMSTRONG:  But they don‘t...

MATTHEWS:  ... something seven—you‘re like the Boston Celtics used to be, seven times in a row.  Nobody can believe this!

ARMSTRONG:  Once you figure it out—once we figured out how to do it as a team, and I figured out how to do it as an athlete, we just kept sort of recycling this program.  And it was—it‘s the biggest and best bike race in the world.  I mean, it‘s taken its fair share of knocks in the last couple years, but it is a beautiful event.  And you know, once we got it down, we just kept running.  I mean, we would plug and play sometimes with different players, different athletes.

But I realized very quickly that that was the one event that was going to enable me to tell a much bigger story to the rest of the world.  I mean, there‘s no other bike race that compares to that.  So I won the first one, and I think—I mean, I said, OK, I got it.  I got it figured out.  This is (INAUDIBLE)

MATTHEWS:  Because we‘re used to marathons being won by Kenyans—and there‘s a lot of theories about that...

ARMSTRONG:  Right.

MATTHEWS:  ... because of high altitude.  They walk to school from the time they‘re born, practically, 10 miles.  What is your advantage?  Why is an American—there‘s another American, by the way, who‘s doing pretty well in this race.

ARMSTRONG:  Yes, I think (INAUDIBLE) Olima (ph) is sitting in third and...

MATTHEWS:  Yes.

ARMSTRONG:  ... and he‘s on our team, so that‘s a great result for us. 

And obviously, we have Alberto Contador in second, as well.  But I don‘t—

I mean, my advantage was, I was—after the disease, I was incredibly motivated.

MATTHEWS:  Yes.

ARMSTRONG:  I mean, I had a whole new perspective on my life and on my sport and on the way you approach training and diet and all these things.  It was a sense of a real fear of failure.

MATTHEWS:  Yes.

ARMSTRONG:  You know, I didn‘t  want...

MATTHEWS:  You don‘t have any problem with the French, do you?

ARMSTRONG:  You know, it depends.

MATTHEWS:  You know, “freedom burgers,” or what are they called, “freedom fries”...

ARMSTRONG:  Yes, “freedom fries.”  You know...

MATTHEWS:  ... all that sort of nonsense we went through a few years ago, before we realized that we can make as many mistakes as the French can.

ARMSTRONG:  It just depends.  I mean, if I walk along, you know, the streets of Paris or any other little town in France, the reception is great.  The media reception is a little different.  But I‘ll take the people...

MATTHEWS:  The media (INAUDIBLE) You mean they‘re wiseguys?

ARMSTRONG:  Slightly.  But I‘ll take the people over the media any day there.

MATTHEWS:  I think it‘s amazing to be a popular American in France these days.  I think it‘s great.  Lance Armstrong—he‘s staying with us for a couple more minutes.  We will be right back.

(APPLAUSE, CHEERS)

MATTHEWS:  And later (INAUDIBLE) in Iowa, who‘s leading out here in the polls (INAUDIBLE) very interesting.  And don‘t forget to take part in the “HARDBALL Campaign Ad Challenge,” make your own political ad (INAUDIBLE) upload it (INAUDIBLE) Hardball.msnbc.com.

You‘re watching HARDBALL from Cedar Falls, Iowa, with Lance Armstrong.

(APPLAUSE, CHEERS)

MATTHEWS:  And do not forget to take part on HARDBALL‘s campaign challenge.  Make your own advertisement.  We‘re in Cedar Falls, Iowa.

(COMMERCIAL BREAK)

(MARKET NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We‘re here in Cedar Falls, Iowa, with seven-time Tour de France champion Lance Armstrong.  And Lance and I will be co-moderating the first ever presidential candidates cancer forum featuring the presidential contenders from both political parties talking about how best to fight cancer.  You can submit, by the way, your questions for the candidates at www.Livestrong.org.  That‘s coming up here on August 27 and 28.

And so in the month before that, we‘re going to sit here—and I‘ve got to ask you, when you‘re thinking about hosting this thing—and we‘ll be sitting out here, meeting with all the presidential candidates—they‘re all, one by one, joining up and accepting the fact they‘re going to be here—what are you going to ask them about?  What‘s your thoughts right now about what these candidates are going to have to deal with in this campaign to be good presidents?

ARMSTRONG:  Well, I think, I mean, with regards to the disease...

MATTHEWS:  The issues you care about, yes.

ARMSTRONG:  I mean, I think we have to focus on access, first and foremost, because that‘s—it‘s there.  We‘ve invested the time and the money and the energy to cure a lot of these problems, so let‘s give that treatment to the people that need it the most.  I think we have to also look at leadership, you know, who—who we want to run certain things for the institute, and also, ultimately, you have to look at funding.  I mean, what—I mean, to me, the fact that we‘ve—we‘ve shrunk the budget the last two years is not acceptable, and I think for something that‘s the number one killer in this country, you know, to spend $5 billion or $6 billion a year isn‘t enough.  And I know it sounds like a lot of money, but we need more money.  And with that, obviously, you increase research, but you also increase morale within the—you know, the...

MATTHEWS:  A lot of people watching right now—in fact, a lot of people working on this show right now, I happen to know—don‘t have health insurance.  And Michael Moore, whatever you think of his politics, has made this an issue.

ARMSTRONG:  Yes.

MATTHEWS:  He‘s raised the perception.  Do you think this country‘s on the verge of a major change in how we finance health care?

ARMSTRONG:  You know, it‘s interesting because I spent so many years racing in Europe, so most of—most of the countries that I raced...

MATTHEWS:  (INAUDIBLE) socialized medicine.

ARMSTRONG:  Right.  Almost all of them.  You know, there—you can look at both sides of it.  And I‘m not trying to be political on this.  I mean, you know, you can look (INAUDIBLE) you know, everybody deserves health care, period.  And I actually do agree with that.  But at the same time, the system we have in place somehow is working and somehow is the best one in the world.  I mean, if you have somebody in England, they‘re not—you know, and they have an advanced case of cancer, they‘re coming to M.D. Anderson (ph) in Houston or they‘re going to Sloan-Kettering in New York.   So we have great places.  You know, I think it‘s...

MATTHEWS:  Yes, but not everybody in America...

ARMSTRONG:  Of course not.

MATTHEWS:  ... can go to what the rich guy from Europe can do when he comes here.

ARMSTRONG:  Great example, New York City—I mean, if you had an investment banker in midtown Manhattan who had advanced cancer, he would have the best care in the world.  You go two miles north of there to the slums of Harlem, and they‘d probably die.  And so that—that‘s—that‘s an issue.  That‘s an issue of access, and that‘s a—that‘s a disparity that we—we shouldn‘t put up with.

MATTHEWS:  Do you think the Democrats are going to do a better job of addressing that than the Republicans because they‘re for more government generally?  I mean, they are more progressive on this, like it or not.  That‘s their position.

ARMSTRONG:  I think it fits into their platform more logically, but you know, I would never want to pick a side or—I have to...

MATTHEWS:  What do think about a family that‘s affected by—I mean, certainly, everybody knows John Edwards is well off.  He‘s one of the most successful litigators around.  He‘s made a ton of money, lives in a big house in North Carolina, in Chapel Hill.  But he is no more immune to hell than—or disease or cancer than anybody on this planet.  His wife, Elizabeth, this wonderful person...

ARMSTRONG:  Right.

MATTHEWS:  ... is really hit by it.

ARMSTRONG:  Right.  And that‘s the thing.  The disease...

MATTHEWS:  Is this going to get him more focused on this thing?

ARMSTRONG:  I—well, I mean, obviously, he loves his wife, and so he lives with it every day.  So of course, he‘s going to be focused on it. 

But the disease does not—does not discriminate.  It‘s not—it doesn‘t

it‘s not for the rich or the poor or the white or the black.  This is a disease that cuts across all fibers (ph) now.

MATTHEWS:  Do you think it‘s an environment, we‘re getting more cancer than anywhere, like, 500 years ago?  You read about ancient—you know, there is evidence of cancer going way back.

ARMSTRONG:  Right.

MATTHEWS:  I mean, General Grant died of it.

ARMSTRONG:  Sure.

MATTHEWS:  You know, I mean, cancer‘s been around a long time.  But do you think we‘re getting more of it because of our environment?

ARMSTRONG:  I mean, I think we have to look at that...

MATTHEWS:  Tobacco.

ARMSTRONG:  Well...

MATTHEWS:  Bad air.

ARMSTRONG:  Tobacco is one of the biggest problems we‘ve had.  I mean, for this country not to have tobacco control—and in my opinion, I think the United States ought to be smoke-free tomorrow, the entire country.

MATTHEWS:  All—all facilities.

ARMSTRONG:  Everybody.  Every place.  Every public place.

MATTHEWS:  Well, you can test that out on the candidates or wait and see how these...

(CROSSTALK)

ARMSTRONG:  I mean, lookit, if a country like Ireland can pull it off, then the United States of America I think can pull it off.  And you know, obviously, you have a lot of major cities in the United States that have already done that, some other states.  But I think, as a president, we should look to make the entire country smoke-free.

MATTHEWS:  OK.  Well, thank you very much, Lance Armstrong.

ARMSTRONG:  Thank you.

MATTHEWS:  We‘re going to see you late in August.  It‘s great to have you.

ARMSTRONG:  Thank you.

MATTHEWS:  We‘ll be coming back with more HARDBALL.

(APPLAUSE, CHEERS)

(COMMERCIAL BREAK)

MATTHEWS:  We are back.  A “Washington Post” report about deplorable conditions at the Walter Reed Medical Center put a spotlight on big problems in the way veterans are treated in this country.  President Bush established a commission to examine the problem.  Donna Shalala, who served as secretary of health and human services, co-chaired the commission, along with former U.S. Senator Bob Dole.  This morning they briefed the president on their findings. 

Secretary Shalala joins us right now outside the Reagan Building Washington.  Madam, you are, of course, everybody knows, president of the University of Miami.  What are we going to do about our wounded veterans now that we were not going to do before?  What good will come of this commission report?

DONNA SHALALA, COMMISSION FOR WOUNDED WARRIORS:  Well, it will be simpler for them to get health care they need.  It will be more understandable.  They will get more benefits, more investment in their education, and getting them back to work, either in the military or in civilian life.  And the system will be financially fairer to them. 

Right now, if you served in the military for 15 years and you get hurt, you don‘t get any kind of retirement benefits.  He may get a disability benefit from the VA.  You might also get a disability benefit from the Department of Defense.  But all of that retirement benefit is gone because you have not served 20 years. 

But the most important thing we have done is to simplify the system, make it more patient-centered.  Every single commissioner that was injured in the wars, who sits on our commission, said it would have made a significant difference in the way they were treated.  Six recommendations, that‘s it.  Most of them can be done by the administration. 

MATTHEWS:  Madam president, what caused the rats and the filthy conditions that confronted our soldiers when they came back from Iraq?  Why did that happen? 

SHALALA:  Well, I can‘t decide what the motivation was.  I think that people of good will made sure that the soldiers got first-class medical care.  None of the soldiers that we met across the country complained about the doctors that operated on them.  The facilities at Walter Reed, the places where they were housed, the lack of coordination of outpatients, is where really the problem is. 

We have addressed that by simplifying the system, by recommending a coordinator that would be there from the time someone is injured until they get back either to civilian life or back into the military.  Complex cases require simple solutions, in my judgment.  That is, someone to help manage the care.  We can‘t have mothers quitting their jobs to go coordinate the care for their sons or daughters.  They ought to be able to support them without being responsible for what a professional ought to be doing. 

MATTHEWS:  You know, when we were over at Walter Reed, we came across a really bad case, a soldier who was blinded by the war and also suffered brain damage, a really bad case.  What will happen to him as a result of your findings?  How will his treatment improve perhaps? 

SHALALA:  Well, first of all, he will get treatment quicker.  There will be no waiting around for appointments.  There will be one person responsible for that soldier, making sure from the time that they get hurt on the battlefield, that they get to the right health care at the right time, that they get the benefits they deserve, that they get home as quickly as possible, and that they do not feel an obligation to try to hang on to their military assignment for financial reasons or because their benefits will be better in any way. 

The most important thing is to make the system seamless for that soldier, to make it first-class, and make it 21st-century.  We know how to do this, Chris. 

MATTHEWS:  Lifetime wounds that will never heal, the people who are rally blinded, brain damaged, that kind of thing?  

SHALALA:  We need to make certain that they get absolutely everything that they need.  No price is too high for those servicemen and women, and make it seamless for them.  Make it easy for them.  Make sure they get the kind of care that they need, so that the responsibility does not shift to their families.  Make them as independent as possible, with first-class care. 

And we do not care whether they get that care in a military hospital or in the VA or in the private sector.  The important thing is to make sure they get everything they could possibly need, and that there is one person in charge of making sure that that happens. 

MATTHEWS:  Well, thank you very much, Donna Shalala.  And once again, for our country, thank you for the service again.  And thank once again, as we have done so many times, because we have had to, because he has served the country so often, Bob Dole. 

Up next, our HARDBALL round table joins us to dig into the big stories of the day, including who is leading in the polls right now out here in Iowa, with just six months to go before the Iowa caucuses that start this thing going.  You‘re watching hardball from Cedar Falls, Iowa, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Let‘s take a look at the top political stories of the day with Kay Henderson of Radio Iowa and James Lynch of the “Cedar Rapids Gazette.” 

First up, the battle of Iowa.  The front runners for the Democratic presidential nomination have decided to duke it out on the pages of Iowa‘s “Quad City Times.”  It is a follow-up to their Monday night debate, with Hillary criticizing Obama for saying he would be ready to meet with leaders of Iran and other dangerous countries. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), NEW YORK:  The question was very specific, as to whether either of us would talk to a list of leaders of five countries with which the United States has serious difficulties within the first year of becoming president.  And I thought that was irresponsible and frankly naive.  Senator Obama gave an answer which I think he is regretting today. 

(END VIDEO CLIP)

MATTHEWS:  It does not sound like he is waffling.  Here‘s his response. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), NEW YORK:  I absolutely stand by my response.  I will be willing to meet with world leaders around the issues that are important to the United States‘ national security.  And the notion that somehow we are punishing those leaders by not talking to them is a profound mistake.

(END VIDEO CLIP)

MATTHEWS:  Kay Henderson, why do you think these two candidates are taking the position they‘re taking, both in terms of policy, with Hillary a bit to the right of Obama, and in terms of engaging with other in the newspapers of Iowa?  What is this about? 

KAY HENDERSON, RADIO IOWA:  This is about a really tough race—tight race in Iowa.  John Edwards is actually in the lead here if you look at the polls.  These two people are really duking it out, trying to make a difference on the ground.  I think it was Hillary Clinton‘s moment to sort of step back and say, people look, this is a naive guy.  He is untested. 

On the part of Obama, I think his supporters hear untested and what they really that is as untainted.  And so I think this is a wash for the Obama campaign, unless, of course, Hillary Clinton in the coming months comes up with sort of a scrapbook of these naivete moments on the part of Obama.  I don‘t think this is going to be the moment of the campaign here in Iowa. 

MATTHEWS:  Why does he come back and say naive?  You‘re calling me  naive?  You voted for the Iraq war resolution, believing Bush wasn‘t going to war.  That‘s naive, isn‘t it?

JAMES LYNCH, “CEDAR RAPIDS GAZETTE”:  I think that is exactly his response, is that she voted to go into Iraq, knowing that if Congress authorized it, Bush was going.  I think it‘s a good fight for both of them to engage in.  For him, he can show that he is the candidate of change.  For her, she should play the experience card, saying I represented the United States in 82 countries around the world and I know how this is done.  You don‘t just pick up the phone and say, Fidel, how does Tuesday look for you?

MATTHEWS:  Let me go back to Kay.  I wonder whether Hillary isn‘t positioning herself with the hawks in the Democratic party, saying a lot of people are worried about the Middle East, worried about Israel.  She is saying, I‘m going to look after you.  I‘m not going to go to the left to be some McGovernite just to win the Iowa caucuses.  What do you think she is saying in terms of the position she has taken, much more hawkish than Obama? 

HENDERSON:  I think it is more about positioning herself as the person with experience, because I think as this race whittles down she is really going to push the experience card, as opposed to Obama.   

MATTHEWS:  What do you think of that?  Does it work to call him naive to make him look naive?  Calling him naive, does that make him naive?

LYNCH:  Well, it certainly plants a seed in peoples‘ minds that oh, he doesn‘t have experience.  Maybe he is naive.  I think a month from now, six months from now, this issue isn‘t going to playing that big in the race.  The whole naive issue may be.  But whether or not they go to Cuba in the first year of the presidency isn‘t a decision-making issue for Democrats. 

MATTHEWS:  Let‘s take a look at the polls now.  You point out that Edwards is ahead out here.  What do you make of the fact that he is doing well out here? 

HENDERSON:  People know him.  He has spent so much time here.  Every time he comes, he has numerous events every day.  He is running a campaign in Iowa as if he were running for governor instead of president.  I also think that he did himself well by coming out and telling people, I made a mistake, and explaining why he believes he made a mistake on his vote on the war.  That really resonates with people in Iowa, particularly among Democrats who have a real visceral dislike of the war. 

MATTHEWS:  Should Hillary do the same? 

HENDERSON:  She has repeatedly been given that opportunity in public forums in Iowa, and she just flat-out refuses to say that. 

MATTHEWS:  Let me ask about this.  Let‘s take a look on the other side here.  We‘ve got Romney doing well here.  Romney is not doing that well in national polls.  He is doing the low teens.  Why is he rolling up here?  I was just talking to some people today.  Apparently he‘s been on the radio a lot out here.

LYNCH:  He has been on the radio.  He‘s been on the TV a lot.  He is spending a lot of resources here to be the leader here.  It hasn‘t translated into a national lead. 

MATTHEWS:  How is the Mormon thing, the LDS thing bounce here?  One way or the other; does it hurt, help, what?   

HENDERSON:  I do not hear people talking about it that much.  But it is there.  It is whispered about a little bit.  As the campaign goes on, we may hear the whispers than we are now. 

MATTHEWS:  Out here you‘ve got a lot of Lutherans, obviously, this part of the country, a lot of Roman Catholics.  Are there a lot of evangelicals, people that really see the Mormon religion in a different way?

HENDERSON:  Apparently, some evangelicals look at it as a cult.  They don‘t recognize it as a church.  That‘s going to be an issue for him.  I‘ve heard him address that a number of times and I think he gives a good answer.

MATTHEWS:  What‘s his answer?

HENDERSON:  They say there should be no religious test.  He quotes Abraham Lincoln and he refers to John Kennedy, that there should be no religion test. 

MATTHEWS:  You know, Kay, last time there was a big upset out here.  We all were trying to figure out who was going to win.  We thought Dean was moving along great out here.  He was anti-war.  He was making all the excitement, the rallies.  All of a sudden, John Kerry came in here, and with a couple of weeks, with Rasmussen, his former warrior and his former combat veteran—fellow combat veteran from the Vietnam War, and with Ted Kennedy, they did some tub thumping and some big rallies.  I was at one of them. 

He turned things around.  Do you think this whole thing could turn around in December again? 

HENDERSON:  I think it really could.  Kerry really poured all of his resources into Iowa and it paid off in the end.  I think if you look at the Edwards campaign, you see someone who already is sort of playing his Iowa card, hoping a really strong finish in Iowa can propel him elsewhere because of the compression of the calendar. 

MATTHEWS:  So all politics is local out here.  If you come out here and spend enough time, you can win this thing. 

HENDERSON:  I think it is also message for him.  I think, truly, when he came out and said the war was a mistake, that really resonated with Iowa Democrats.  And Iowa Democrats are really hungry.  If you go to events, comparing a Democratic events in Iowa to a Republican event is like comparing chocolate milk to skim milk.  I mean, there are just hungry and they want to see these candidates and they want to hear them articulate views. 

MATTHEWS:  OK, thank you both.  It is great to meet you guys.  I will be calling you up all the time.  You people know more than anybody anywhere in this country.  Iowa is where it‘s at.  This is ground zero.  Kay Henderson of Radio Iowa, and Jim Lynch, who is with the “Cedar Rapids Gazette.”  I will be right back—I will be back in Iowa in August for the first ever presidential candidates cancer forum, co-moderated by Lance Armstrong himself.  HARDBALL returns tomorrow at 5:00 and 7:00 Eastern.  See you tomorrow night.

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

END   

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