updated 8/6/2007 11:30:48 AM ET 2007-08-06T15:30:48

Guests: David Bonior, Rep. Adam Smith, Rep. Sheila Jackson Lee, Jay Carney, Julie Mason, Craig Crawford, Carrie Lukas, Diana Zuckerman

MIKE BARNICLE, GUEST HOST:  Tonight: Congress explodes into chaos before leaving Capitol Hill for its summer break.  And it‘s a three-way race for Democrats in Iowa.

Let‘s play HARDBALL.

Good evening.  I‘m Mike Barnicle, in for Chris Matthews.  Welcome to

HARDBALL.

President Bush laid down the law with Congress today, saying they have to stay in session until they pass legislation modernizing terrorism surveillance rules.  It now appears the House, and maybe even the Senate, will be in Washington at least until Saturday.

And today in Minneapolis, crews recovered a fifth body from the bridge collapse, and authorities have now lowered the number of missing to eight.  First Lady Laura Bush arrived this morning to tour the scene, and tomorrow President Bush plans to travel to the site.  We‘ll talk to Minnesota congressman Keith Ellison about the political response to this catastrophe.

And defying Bush‘s threat of a veto, last night the Senate passed legislation to expand health care for an additional three million lower-income children.  Why is the Bush administration opposed to this legislation?  That‘s our HARDBALL debate.

And in 2008 news, it‘s a three-way race in Iowa.  A new poll shows Hillary Clinton, John Edwards and Barack Obama in a virtual tie for first place.  With less than six months to go before Iowa voters kick off the election, this battle is getting fierce.  We‘ll talk to supporters of the top three candidates in a moment.

But first, HARDBALL‘s David Shuster has a report on the raucous week in politics.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  One day before they were scheduled to leave for the August recess, the House last night erupted.  Democrats used their majority status to control and then sink a vote Republicans were winning, and GOP lawmakers started hollering.

UNIDENTIFIED MALE:  Shame!  Shame!  Shame!

UNIDENTIFIED FEMALE:  Shame!  Shame!  Shame!

UNIDENTIFIED MALE:  Shame!  Shame!  Shame!

SHUSTER:  While the passions were largely over procedure, it all underscored the increasingly brutal partisanship this summer that has left raw feelings and frustration in both congressional chambers.

SEN. ROBERT BYRD (D), WEST VIRGINIA:  (INAUDIBLE) Listen.  Hey, are you listening?

SHUSTER:  Over the last several weeks, immigration reform went nowhere, efforts to end the Iraq war got majorities in both Houses but fell short of the votes needed to override presidential vetoes, and the only major piece of legislation that passed was ethics reform.

But a judge heard this week that evidence of corruption may exist at the House of Republican senator Ted Stevens, so FBI and IRS agents conducted a raid.  Questions have been raised about a sweetheart land deal involving Alaska‘s other senator, Republican Lisa Murkowski.  Several House lawmakers are facing possible charges in the Jack Abramoff investigation.  In the U.S. attorney scandal, President Bush‘s long-time Texas friend, Attorney General Alberto Gonzales, is accused of lying to Congress.  And the president is keeping adviser Karl Rove from testifying at all by asserting a questionable claim of executive privilege.

As the controversies roll on, President Bush today hit back at the Democratic Congress for failing to finish terrorism surveillance legislation.

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  I‘m going to ask Congress to stay in session until they pass a bill that will give our intelligence community the tools they need to protect the United States.

SHUSTER:  But when it comes to protecting U.S. troops in Iraq, President Bush has said nothing about the Iraqi parliament now in recess.  Iraq‘s government has failed to pass any legislation that would help with political progress, and the government is not coming back for a month.

Meanwhile, Iraq is the burning issue on the presidential campaign trail, and this week, less than six months before the primaries, Democrat Barack Obama managed to slam President Bush and Hillary Clinton in the same sentence.

Sen. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  By refusing to end the war in Iraq, President Bush is giving the terrorists what they really want and what the Congress voted to give them in 2004, a U.S. occupation of undetermined length, at undetermined cost, with undetermined consequences.

SHUSTER:  Obama spoke about targeting al Qaeda in Pakistan, and in a follow-up interview with the Associated Press, Obama was asked about using nuclear weapons.

OBAMA:  I think it would be a profound mistake for us to use nuclear weapons in any circumstances involving, you know, civilians.  Let me scratch all that.  There‘s no—there‘s been no discussion of nuclear weapons.  That‘s not on the table.

BARNICLE:  Senator Hillary Clinton, who last week called Obama naive, chided him again.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: 

Presidents should be very careful at all times in discussing the use or non-use of nuclear weapons.  Presidents since the cold war have used nuclear deterrence to keep the peace, and I don‘t believe that any president should make any blanket statements with respect to the use or non-use of nuclear weapons.

SHUSTER:  While Clinton pounds Obama, Vice President Cheney is attacking Clinton for demanding contingency withdrawal plans in Iraq.  Meanwhile, Republican presidential candidate Mitt Romney is now facing criticism for supporting the Bush Iraq escalation strategy three months ago and now saying he‘s not sure.

(on camera):  The Iraq war is going to dominate the campaign trail, Congress and the Bush administration in September when the top U.S.  commander in Baghdad delivers the next progress report.  But heading towards the August recess, the atmosphere in this town is already toxic.  Trust is in short supply, and almost every motive is seen as politically nefarious.

I‘m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

BARNICLE:  Thanks, David.

Congressman Adam Smith of Washington state is an Obama supporter.  David Bonior is John Edwards‘s campaign manager.  And in a moment, we‘ll be joined by Congresswoman Sheila Jackson Lee of Texas.  She is the national co-chair for the Clinton campaign.

Congressman Smith, your candidate, Barack Obama, has been called naive, his statements on Pakistan and Afghanistan and nuclear weapons from Senator Dodd confused and confusing.  Are basically they trying to tell the American people that Barack Obama isn‘t a grown-up, he‘s not ready to be president?  What‘s your response to all of this?

REP. ADAM SMITH (D), WASHINGTON:  Well, they‘re trying to sell that, but it‘s not true and the facts don‘t back up what they said.  To begin with, all senator Obama said about Pakistan was something that I challenge any presidential candidate or member of Congress to refute and say the opposite: If al Qaeda is there, we have actionable intelligence that they are going to hit us, do we have to wait for permission to go after those who are going after us?

Now, Senator Obama was also clear in pointing out we‘re going to work with Pakistan.  That‘s the goal.  But he wanted to assure the American people, who have been receiving all kinds of reports from the NIE and elsewhere that al Qaeda is resurgent, back up, running, functioning in northwest Pakistan, that we‘re not going to let that be, that we‘re going to go out there and we‘re going to take care of them before they hit us.  We‘re not going to have a repeat of 9/11.  And I don‘t see how any other candidate could responsibly say otherwise.

BARNICLE:  Well, are you concerned about the perception that the other candidates clearly are trying to lay on your candidate, Barack Obama, that this is a very tricky part of the world.  You‘ve got Afghanistan, Pakistan, India.  Two of those powers—Afghanistan‘s not a power—but India and Pakistan are nuclear powers.  It‘s a very dicey place in this world.  And the world is a dangerous place.  And they seem to be trying to set up your candidate as being sort of untested in dealing with these difficulties.

SMITH:  Again, it‘s just not true.  I think we have to deal with reality, not perceptions.  And I find it particularly troubling, Senator Clinton‘s comments about nuclear weapons.  Senator Obama was asked in context of Pakistan, Would you use nuclear weapons?  And he thought, That‘s crazy.  Of course not.  And then person who was writing the article took that as a blanket statement about nuclear weapons.  So they asked one question and acted like he was answering a different one, and Senator Clinton seized on that after Senator Obama had explained it.

So yes, they‘re trying to obscure reality and obscure the facts.  But if there‘s one thing we‘ve learned from the Bush administration, let‘s deal with reality.  Let‘s not create the perceptions that we want and then try to pretend that they‘re real.  What Senator Obama is saying is perfectly responsible and in keeping with the national security interests of this country.

BARNICLE:  Congressman Bonior, is your candidate, John Edwards—has he had anything—I mean, everybody else is playing tag team with Barack Obama, jumping in on him.  Has your candidate had anything to say about this?

DAVID BONIOR, EDWARDS CAMPAIGN MANAGER:  ... Mike and Adam, is basically that we need to move our troops out of Iraq.  And we—he wants to move 50,000 initially out, and over a reasonable amount of time, the others.  He believes that this policy in Iraq has created the dynamics for terrorism in that part of the world.  It‘s made—we have fewer allies today.  We are less safe than we were before.  And what we need to do is start to move our troops out of Iraq.

Now, with respect to the other two issues that you just talked about, John Edwards does not believe it‘s in the interest of his presidency and the future or this country to talk about nuclear weapons because what it will do is decrease his options and also diminish his authority, so we will not engage in those kinds of discussions.

BARNICLE:  When you say, Congressman, that we are less safe today than we were before September 11 -- I go through airports quite a bit, as I‘m sure the both of you do, and most people seem to feel safer now than they did before September 11.  So when you say less safe, spell that out.  What are you talking about?

BONIOR:  Well, I think there is a proliferation of terrorism as a result of this war in Iraq.  What we have created is a den for terrorists to breed in Iraq as a result of this war and to ship their ideologies and their fears and their capabilities around the world, not just, of course, in the Middle East, but now it‘s very prevalent in other places, in other continents around the world.

So we have a big task on our hands to deal with this issue.  And yes, we will go after the terrorists under a John Edwards administration.  Anyone who does our citizens harm, we will go after them.  Make no mistake about that.

But also we‘ve got to deal with the root causes of terrorism.  And a lot of people don‘t like to talk about this, but the fact of the matter is you create the grounds for terrorisms to flourish in hopeless situations where people don‘t have options to get an education, to have health care, and that‘s prevalent in much of Asia, in Africa and Latin America.  You‘ve got, in this world today, half the population, three billion, living on $2 a day or less, and radicals and extremists feed on that.  We‘ve got to have a dual role to go after those who are going to harm us but also to restore America‘s moral authority by dealing with these other broad, root institutional questions.

BARNICLE:  Congressman Smith, safer or less safe today?  What does your candidate think?  What do you think?

SMITH:  I think it‘s (INAUDIBLE) I think, domestically, certainly, we‘ve made some good decisions.  As you mentioned at the airports, I fly all the time.  Certainly, the security is better than it was before.

The troubling part is internationally, are we really winning the war against al Qaeda?  You know, as Senator Obama said—and he said before the Iraq war in 2002 -- that was the wrong enemy.  We needed to finish the fight against al Qaeda.  And when you look at Osama bin Laden, Zawahiri, and how they‘ve reconstituted themselves in northwest Pakistan and in parts of Afghanistan, you have to worry about the international environment.  And I think in that sense, we are less safe than we were certainly after we had initially routed the Taliban and al Qaeda in Afghanistan.  Taking the eye off the ball, as Senator Obama said was a mistake, and I think it‘s made al Qaeda stronger.

And I will agree completely with my former colleague, Congressman Bonior, that we‘ve got to have to win the hearts and minds.  We‘ve got to go at issues like poverty and lack of opportunity in the world.  That was a huge part of Senator Obama‘s speech that he gave a just a couple days ago, a part that was completely ignored by the media.  But he talked about going to the Muslim world and making the case for our values in a way that this administration, the Bush administration, has fundamentally messed up.  He wants to move in a different direction on that critical issue.

BARNICLE:  Once again, the media screwing things up.

(LAUGHTER)

BARNICLE:  We‘re going to be back with Congressman Adam Smith and David Bonior, who looks a whole lot more rested than when he served in the House all those years.

(LAUGHTER)

BARNICLE:  And when we return, Congresswoman Sheila Jackson Lee with the Clinton campaign will join us.

Coming up: As recovery efforts continue in Minneapolis, what role should the federal government have in shoring up the country‘s decaying bridges?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  Welcome back to HARDBALL.  We‘re back with Congressman Adam Smith of the Obama campaign, David Bonior, campaign manager for John Edwards, and joining us now is Congresswoman Sheila Jackson Lee.  She‘s the national co-chair for the Clinton campaign.

Congresswoman, we were talking in the earlier segment while you were voting, doing your duty out there on the House floor, working for your people, about Barack Obama and the fact that nearly every other campaign, including Hillary Clinton‘s campaign, has jumped all over him for his perceived—according to them, his naivete when it comes to foreign policy, especially with regard to his statement about the use of nuclear weapons in Afghanistan and/or Pakistan.  Where are you on what Barack Obama said?

REP. SHEILA JACKSON LEE (D), TEXAS:  Well, I think you‘ll find that Senator Clinton has an overall respect for all of the candidates and looks forward to working with them and looks forward to working hard in Iowa and having a very, very, very strong showing.

I think what we want to focus on is how do we address strategic friends.  Afghanistan and Pakistan are friends.  Senator Clinton has a long-standing friendship with those nations and the people from those nations in this country.  And frankly, what she said was to focus on finding Osama bin Laden—that‘s the first order of business—and not focus on hypotheticals.  Her point was that, as president of the United States, we may have to make decisions, but we‘ll make them on facts.  And therefore, when we make the decision, we may make a decision agreeing with Senator Barack Obama, but we may make a decision not agreeing.  It‘s all about making the right decision with the right facts on behalf of the American people.  That‘s the posture that Senator Clinton takes, and I think it‘s the right posture and it‘s a forward-thinking posture and a thoughtful posture.

But we are in this business to win the election and to give to people the sense of not only our experience but our newness in welcoming of new ideas.  We‘ll look for new ideas, but the key element is, Let‘s find Osama bin Laden.  That‘s been her focus, and that will be her focus as president of the United States of America.

BARNICLE:  Well, one of the elements in finding Osama bin Laden—and it‘s not a hypothetical, and you just referenced the fact that the Clintons, Senator Clinton and former president Clinton, have been friendly with the leaders of Afghanistan and Pakistan for several years.  And yet there is a feeling among many people that Pakistan is just playing us for fools, playing the United States for fools, that they could be doing much more with regard to trying to secure Osama bin Laden and not helping us.  What does Senator Clinton do to force them to do more?

LEE:  Well, let me—let me say to you—I‘m so glad you asked that question.  I just finished a meeting with the ambassador from Pakistan, along with another of other members asking those pointed questions.  I think Senator Clinton has it right.  You have to work with our allies or those that are perceived as our allies, and Pakistan is.  They have about 85,000 troops in the area.  And what we need to do is to focus them and continue to work with them and their troops, who‘ve lost blood in that tribal area, to look for Osama bin Laden, along with our own intelligence and our own personnel that we have helping to assist.

The real problem is the deviation from finding Osama bin Laden through this war in Iraq.  President Clinton, if she is elected, will not have that crux (ph) to have to deal with.  She will be focused on what the American people have asked her to do, fight the war on terror and find Osama bin Laden.  And Pakistan is an ally in that, and we believe that that nation can be a strong ally.

Again, it‘s not a hypothetical when you talk about finding Osama bin Laden.  We all want to find that.  The hypothetical that she was speaking to is the question of making a determination about how you would implement that particular task.  And that is a presidential decision, and it should be left to the person elected as president of the United States.

BARNICLE:  Congressman Bonior, switching gears, we have several people seeking to be president of the United States.  Your guy, John Edwards, is one of them.  There‘s a new poll out this weekend, the latest ABC News/”Washington Post” poll of likely Democratic voters in Iowa, shows a virtual three-way tie, with Barack Obama at 27 percent and both Senator Clinton and John Edwards at 26 percent.

Now, your candidate basically has been in Iowa long enough to be in

the cast of “Field of Dreams,” and it‘s jump ball out there for him.  How -

how...

(CROSSTALK)

BONIOR:  No, you can‘t mix your—don‘t mix your metaphors up, Mike. 

It was either basketball or baseball.

(LAUGHTER)

BONIOR:  No.

Well, if you look at the polls since Memorial Day—there‘s been about five, if you exclude the one you referred to, “The Washington Post” poll and the AGR polls—and those polls, most of the public polls have John Edwards ahead. 

If you average those five out, he is at 28 percent, Senator Clinton 21, and Barack Obama, I believe, 18, and, if I recall correctly, Bill Richardson at 9 percent.  So, we have generally had a lead. 

This ABC poll, by the way, that—“Washington Post” poll, had a huge sample.  And it doubled what historically turns out to vote in—in Iowa for a caucus in the middle of the winter. 

One of the reasons John Edwards, of course, is doing so well is because he has really been the candidate of change, big change, bold change, and imaginative change.  I mean, he‘s been the first on health, having the universal health care proposal, been the first with the global warming and energy proposal that really was received well by the netroots community.  He won the MoveOn.org poll on that.  When all three candidates were—positions were viewed, he got 33 percent, and the other two got 15 or 16 apiece. 

So, on all of these different issues, he has really been in the

leadership.  And he has been the person—and I will end with this, Mike -

who has really taken on the special interests.  He is going after those folks who really have taken on working people for many years, the pharmaceutical companies, the insurance companies, the oil companies. 

He said to them, you know, we are going to take your power away from you. 

And that‘s why he is doing well in Iowa. 

BARNICLE:  Well, I want to give Congressman Smith the closing word here about Iowa, because former Congressman Bonior, you just heard him, Congressman Smith, talking about John Edwards representing change.

And, yet your guy, across this country, seems to, a lot of people, to be representing change as well.  How do you balance the need that people, some people, have in looking for change with the obvious need that a lot of people have in wanting to be secure and be represented by someone with experience?  How are you doing that? 

SMITH:  Well, first of all, it‘s interesting in the poll that, when asked, you know, which candidate represented change, Senator Barack Obama won that in that poll.  And I think he does offer the cleanest break from the past. 

And how you balance that, I think, is while—why Senator Obama is a unique candidate, because he does offer a clean break from the past.  He, you know, was not in Washington fighting all these fights that have been fought over the course of the last 10 or 15 years.  He is offering new ideas.  He‘s talking about them differently.  He‘s engaging with people. 

But, at the same time, he has a great deal of wisdom and knowledge in the approach to issues.  And I guess the best example of that, again, is what he said in 2002 about where the Iraq war would leave us. 

So, in Senator Obama, you have a guy who offers a clean break from the past, but is also very wise and has the judgment to be president.  And I think that‘s the perfect combination that we are looking for in the Democratic Party and in the country, frankly.  And I think that—that opportunity for change, I think, is—is tremendous. 

(CROSSTALK)

JACKSON LEE:  I hope I will get a word on Senator Clinton. 

Let me just say that we are excited about the polling numbers.  As I said, Senator Clinton respects all of the candidates that are in this race.  Iowa is a finisher state.  Senator Clinton is starting it.  She‘s working it, and she‘s finishing it. 

And I think what people are seeing regarding Senator Clinton is a can-do attitude with her senatorial record.  She has a record on fighting the global warming issue.  She has a record on empowering women and children with greater health benefits.  She has a record, if you will, on internationalism, being able to work across the ocean, and understand that foreign policy is intertwined with national security.

And, certainly, she has a record, as a member of the Armed Services Committee, looking, in a balanced manner, as to how we end the war in Iraq quickly, which will be her first act.  We would like to end it now, but we know that, with President Clinton, I think Iowans understand she will end the war. 

And, so, they are looking at a record of experience, but they are also looking at a record of newness.  And that‘s what she offers to the people, the good people of Iowa. 

BARNICLE:  Congresswoman Sheila Jackson Lee, Congressman Adam Smith, David Bonior, thanks very much. 

JACKSON LEE:  Thank you. 

BARNICLE:  Up next:  President Bush is heading to Minnesota this weekend, but what can the federal government do to ensure America‘s bridges are safe?  We will have the latest from Minneapolis.

And Sunday, on NBC‘s “Meet the Press,” Tim Russert interviews Defense Secretary Robert Gates. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

BARNICLE:  Welcome back to HARDBALL. 

Recovery efforts continue tonight at the site of the tragic bridge collapse in Minneapolis. 

We get the latest now from the site of the bridge collapse from MSNBC‘s Contessa Brewer.

(BEGIN VIDEOTAPE)

CONTESSA BREWER, NBC CORRESPONDENT:  The NTSB chairman has just announced that they have made a giant leap forward in the investigation.

They say the south end of the bridge shows signs that it shifted some 50 feet. 

I am going to step out of the way, so you can see the part that I am talking about.  I‘m standing at the north end of the bridge.  And the part where you can see that car just barely dangling on the edge of the bridge now, you can see that that car is on the south end.  That‘s the part they say has shifted some 50 feet.

They say that—they may be able to go back and take a look at where the bridge fell, and why, in that portion of the bridge, it shifted, where the other parts of the bridge collapsed on top of each other. 

The divers have been in the water all day, part of the recovery process.  It‘s dangerous work.  The Army Corps of Engineers was able to lower the water level some two feet, which then allowed the divers to get back in the water.  They are tethered. 

The lines are taut, so that the divers don‘t wander into the debris fields that could pose so many risks.  They say that—that the divers also have been having to watch out for falling debris from the bridges overhead.

But, in the meantime, the recovery process still moving forward.  At this point, the death toll stands at six dead.  And the sheriff‘s department says eight missing, although other authorities say there could be more, because it‘s certainly not a scientific process to find out who is missing. 

That‘s the latest from here in Minneapolis.  I‘m Contessa Brewer.

Mike, let me send it back to you. 

(END VIDEOTAPE)

BARNICLE:  Thanks very much, Contessa. 

Up next:  The Senate passes a bill to provide low-income kids with health care.  The White House says President Bush will veto it.  Who is right in this fight?  That‘s the HARDBALL debate tonight. 

You are watching HARDBALL, only on MSNBC.        

(COMMERCIAL BREAK)

REBECCA JARVIS, CNBC CORRESPONDENT:  I am Rebecca Jarvis with your CNBC “Market Wrap.”

A major late-day sell-off, the Dow Jones industrial average plunging 281 points.  The S&P fell 39 points.  And the Nasdaq dropped 64 points.  The sell-off set off by Bear Stearns—Standard & Poor‘s downgrading the investment bank‘s credit rating outlook from stable to negative because of its exposure to the crumbling subprime mortgage market. 

In a conference call, Bear Stearns‘ CFO said the credit market is the worst he has seen in 22 years.  Bear Stearns shares were down more than 66 percent today and are down about 33 percent for the year. 

Weaker-than-expected economics readings also put pressure on stocks.  Employers added fewer jobs than expected last month.  And a measure of the services sector showed slower growth. 

Meantime, oil fell $1.38 in New York, closing at $75.48 a barrel. 

That‘s after hitting a record high of almost $79 a barrel on Wednesday. 

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

HARDBALL. 

BARNICLE:  Welcome back to HARDBALL.

This week, the Senate passed a bipartisan bill that would provide health insurance for millions of children in low-income families.  The majority was more than enough to overcome the veto repeatedly threatened by President Bush.

So, the HARDBALL debate tonight:  Will this bill cause to further the government‘s takeover of the health care industry?

With us is Carrie Lukas.  She‘s the vice president for policy and economics for the Independent Women‘s Forum.  And Diana Zuckerman, who is the president of the National Research Center for Women and Families. 

Diana, you hear about this bill, you hear it described, and you read about it in the paper, you know, providing more and better health care for millions of children from low-income families, it seems like a no-brainer.  Everybody would sit there and nod and say, hey, yes, that‘s great, sign me up.

And, yet, you have reservations about this?

DIANA ZUCKERMAN, PRESIDENT, NATIONAL RESEARCH CENTER FOR WOMEN AND

FAMILIES:  (AUDIO GAP) about it at all.  I think it‘s a wonderful idea and very important, because, of course, what we really want is for children to get the health care they need and for pregnant women, also, whenever possible, to also get the care that they need. 

So, I think this is a no-brainer.  I think it‘s a great idea. 

BARNICLE:  Carrie, do you agree? 

(LAUGHTER)

BARNICLE:  I mean, should this bill just sail into—into legislation and become law immediately?  I mean, won‘t things be better once that happens? 

CARRIE LUKAS, VICE PRESIDENT FOR POLICY AND ECONOMICS, INDEPENDENT

WOMEN‘S FORUM:  No.  I think we need to be real careful when we think about what this bill does and what it doesn‘t do. 

The SCHIP program was supposed—there already is a program that focuses on low income, the truly poor folks.  And that‘s Medicaid.  This is about—about providing health care for those who are above the—who are in—supposed to be low income.

But, in fact, what this bill, the bill passed by both the Senate and the House, would do is really change the eligibility.  It removes a lot of requirements, so it would not necessarily be targeted to low-income folks at all. 

And what this really is, is something about moving more people into government-run health care, which is not something that a lot of people, a lot of individuals want.  And I think that all of America should really be concerned about this drift towards socialized medicine. 

BARNICLE:  All right, Carrie, you seem to have done something that I clearly have not done, and read the bill, or at least know a lot about it, a lot more about it than I do. 

So, if could you for me, could you define, under the terms of this bill, the phrase, the term, the word children?  Who are children under this bill?  Is it someone who is 12?

(CROSSTALK)

LUKAS:  Well, that‘s one of the—that‘s one of the big questions marks, because it‘s not targeted towards children.  This gives a lot of leeway to states to define who they are going to provide—provide this health care benefit to. 

It‘s not only children.  It‘s, also, children can be defined up to in their—in their 20s.  There‘s some adults and childless individuals are also being defined as children, which, you know, I am all for giving states leeway, but I think we need to be really careful, because what this is, is really a move to move—many people who actually have insurance will be moving towards government insurance. 

It really is a move from private insurance to government insurance.  And that is something that should—affects all of us.  It‘s something we should really question. 

BARNICLE:  Diana, do agree with that?  I mean—I mean...

ZUCKERMAN:  It‘s—it‘s just not true. 

First of all, the program, currently, over 90 percent of the people covered in this program are children, and almost all of them young children.  It‘s true that the changes would open that up a little bit, but, still, about 90 percent of the people in it are either going to be children.  Maybe that might include pregnant women.

And, in terms of poor people, the vast majority of the people on the SCHIP program, the children, as well as the pregnant women, are at 200 percent of poverty level or less.  And that‘s about $40,000 a year for a family of four. 

And, although that may not seem like dire poverty—obviously, it isn‘t—but insurance now costs at least $1,000 a month for a family.  And, so, obviously, it‘s very, very difficult to afford health insurance, if you‘re going to pay over $12,000 a year, and you only are earning less than $40,000 a year.

So, rather than have people have to decide between food and shelter and health insurance, it‘s very important.

And I just wanted to add one other thing, that, although it would include some parents—not very many—it‘s very important to children that their parents have health insurance.  If you have children who get cancer, obviously, that‘s terrible.  But, if their parents get cancer and die, and can‘t take of them, that‘s also terrible for the health and welfare of those children.

BARNICLE:  Diana, are you—are you concerned at all that, under—under this bill, under the provisions of this bill, that some people who now have Blue Cross Blue Shield or whatever, whatever private insurance plan they might have, might think, hey, I have got a better deal coming if I go over into this government program, and that the government program swells with people who don‘t belong in the government program? 

ZUCKERMAN:  Well, there‘s two things I want to say about that. 

First of all, it‘s not government health care.  This is all private health care.  The government pays for it, but it does not provide it.  It‘s not like the VA system, which is a government program.  This is, you know, private doctors, regular HMOs, and so on providing care.  It‘s just who pays for it that is different. 

The other thing is that there are protections in the bills.  And I am sure that the final bill, which we don‘t know what that is going to look like, but they will have some protections.  One of the ways to protect against people dropping their regular insurance is to have a waiting period. 

So, if somebody dropped their regular insurance, they would not be eligible for this program for at least three to six months.  And that would be a risk that would be much too big to take. 

BARNICLE:  OK.

ZUCKERMAN:  Also—also...

(CROSSTALK)

BARNICLE:  Carrie Lukas, about—hurry up, quickly, about 15 seconds, last word.  Go ahead. 

LUKAS:  Well, I think, of course, everyone wants to have health insurance for—for everyone.

And I—but there‘s better ways to do that.  We need to begin by looking at changing the way that our health care system is structured.  And the employer-provided—the induction—deduction for employer-provided health care is really unfair to many people, mostly lower-income people and the self-employed.  And that‘s what we need to begin reforming if we want to cover people with health insurance. 

BARNICLE:  Carrie Lukas, Diana Zuckerman, thanks very much.  All of these years, all this talk, all these politicians, still health care is a crippler for too many.  Up next, our panel on the week‘s top political stories, including a new presidential poll with a three-way deadlock for the Democrats in Iowa.  Don‘t forget the HARDBALL ad challenge.  Make your own ad like this one from Michael Carr of Tulsa, Oklahoma. 

(BEGIN VIDEO CLIP)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE:  Let me say this very simply, if you are looking for a candidate that will do the best job of attacking the other Democrats, I am not your guy.  I believe this election is much bigger than that.  This is about the future of America.  It‘s about lifting up the American people, and making them believe again that everything is possible. 

Our campaign is not based on the politics of cynicism.  It‘s based on the politics of hope. 

(END VIDEO CLIP)

BARNICLE:  Keep those ads coming, boys and girls.  Just upload them at our website, HARDBALL.MSNBC.com.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

BARNICLE:  Welcome back to HARDBALL.  Time now to dig into the most exciting political headlines in Washington and out on the campaign trail.  Here to do it is our panel, MSNBC political analyst, the always exciting Craig Crawford, along with the “Houston Chronicle‘s” Julie Mason, and “Time Magazine‘s” Jay Carney, who‘s got his big MSN button, for main stream media.  He‘s out there covering all those bloggers out in blog land in Chicago. 

JAY CARNEY, “TIME MAGAZINE”:  We are all bloggers now. 

BARNICLE:  Absolutely.  First up, the ball game; a new ABC/”Washington Post” poll of likely Democratic voters in Iowa, tie ball game, shows Hillary Clinton, John Edwards and Barack Obama tied up in that first caucus state.  Bill Clinton—Bill Clinton—Hillary Clinton and John Edwards came in at 26 percent, Barack Obama at 27 percent. 

It‘s good news for Obama.  But it could mean a tough road ahead for John Edwards.  If he fails to win in Iowa, does he still have a shot at the presidency?  Craig Crawford, tell me why I should care about this poll or any other poll at this point in time? 

CRAIG CRAWFORD, MSNBC POLITICAL ANALYST:  Well, because it‘s numbers.  We finally got some numbers.  The internals of this poll interested me, Michael, because you know the ties—the three-way tie, if you break it out into the internals, there‘s some interesting developments there.  One is on personal attributes.  Hillary lags them quite a bit on honesty and trust worthiness.  But, she really whips them on electability, experience and strength. 

And so that‘s my answer to your question.  I actually think the internals of these polls, at this stage of the game, are a better indicator for looking ahead to the caucus lesson six months from now. 

BARNICLE:  Julie, Craig just kept talking about the internals, like he was an internist or something, like he was a doctor. 

JULIE MASON, “HOUSTON CHRONICLE”:  We‘ve been playing doctor a little bit before the show.  

CRAWFORD:  You‘ve got to pull out the entrails. 

MASON:  Well, what is going to be interesting for voters and for the rest of us is that now all three of them are going to be at each other‘s throat.  It is going to be crazy until the next poll shows some realignment.  But right now, with them all tied up, it‘s just going to be a bloodbath, which is good for democracy, I guess. 

BARNICLE:  Jay, David Bonior was on earlier in the show, and we were talking briefly about this poll.  I indicated that I thought John Edwards had been in Iowa so often that he was going to be in the remake of “Field of Dreams.”  For him, at this stage, to have this virtually tied, this is not good news for the Edwards campaign, is it? 

CARNEY:  Not being an apologist for the Edwards campaign, I would say that given the couple months that John Edwards has had in general with media coverage of his—the superficial business of his hair cuts, with the more serious business of working for a hedge fund and other issues, I would say it‘s not so bad, given that both Senator Clinton and Senator Obama are true heavy weights, you know, raising a ton of money. 

Still maintaining a virtual dead heat with those two in Iowa after a couple bad months in the press is not terrible for John Edwards.  And I would say that Obama‘s numbers—one of the most interesting internals that I read about, that I thought was revealing, is that Obama‘s support skews young, and yet caucus goers tend to skew old, as voters do.  So, it‘s not clear that Senator Obama will be able to deliver those younger voters to the caucuses and get them to stay through the whole night. 

CRAWFORD:  About 40 percent of those younger Obama supporters said this would be their first caucus vote.  That puts a lot of pressure on the Obama campaign to make sure they get them out, particularly if it‘s snowing.  You have to go to these caucuses and stand there for a few hours.  The history has been that young people don‘t always show up.  Howard Dean found that out. 

BARNICLE:  Is there a Patagonia store in Iowa?  They can go buy their cool things and stand out there.  Next up, beating up Barack.  Last week Hillary Clinton went after Barack Obama for saying that he would meet with enemy foreign leaders.  Now he is taking more heat from the other 2008 Democratic candidates.  On Thursday, Joe Biden said Obama‘s plan to root out al Qaeda in Pakistan using U.S. troops was naive.  Chris Dodd called Obama‘s comments about nuclear weapons confusing and confused. 

So why all the attacks?  Are all of the candidates vying for the number two slot to take on front runner Hillary Clinton?  Your response, Craig Crawford? 

CRAWFORD:  That‘s it.  The battle right now is for the alternative to Senator Clinton, which is great news for Senator Clinton.  It confirms she is the front runner.  None of these other candidates are going to break in.  And part of the problem is the media—is we are just so obsessed with the Obama/Clinton race, and these other candidates simply do not get the coverage. 

MASON:  It‘s true and we end up just—sorry—fighting over hypotheticals.  Who may or may not use nukes at some indeterminant point in the future.  This is one of the consequences of the campaign starting so early. 

BARNICLE:  Jay, let me ask you something; you know, I go into a couple different states and have a cup of coffee and bump into people—you‘re out there in Chicago.  You‘re out there in the middle of the country.  Whenever Barack Obama‘s name comes up, there is a gleam in a lot of people‘s eyes, because I think a lot of people, my instinct is, want something new, something different this time out. 

And yet national security, being what it is, people‘s fear of another terrorists attack, the balance between the two, experience and something new; how do you think that‘s playing out for Barack Obama? 

CARNEY:  Well, you know, in some ways very well.  He has done well raising money.  He has shown a lot of grass roots support.  But I think experience is an issue.  It‘s one that Senator Clinton clearly wants to exploit, and other candidates like Chris Dodd and Bill Richardson want to exploit, because there is no question, at least on national security matters, that Barack Obama has less experience than some of his opponents. 

One thing that is refreshing about this, you know—while it‘s a feud and a name-calling episode between Senator Clinton and Senator Obama, it‘s substantive.  I think what we saw here revealed a lot about both candidates and where they stand on the issues and their relative level of experience. 

And while—on the Senator Obama issue, while it‘s certainly true that no president of either party would truly look at the idea of using nuclear weapons to bomb Osama bin Laden in Waziristan, it‘s also true that it‘s very rare that a president would take that off the table ever, because it is simply not done in foreign policy, where you remove options from the table when you are trying to exert leverage.  I think Senator Obama expressed a truth, but he also, I think, showed his inexperience. 

(CROSS TALK)

CRAWFORD:  Any loose talk about nukes by a presidential candidate is trouble, particularly a new comer already trying to fend of the naive --  

MASON:  Rookie mistake. 

BARNICLE:  Doctor Strangelove.  We are going to be right back with the panel.  You are watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  We‘re back with MSNBC political analyst and former chief internist at Walter Reed, Craig Crawford, the “Houston Chronicle‘s” Julie Mason, and “Time‘s” Jay Carney, who is in Chicago and is blogging right now as he speaks with us. 

Next up video 2008, house of chaos.  Late Thursday night House Republicans staged a natural walkout after a Democratic chair gave a legislative victory to his own party instead of the Republicans.  The vote would have stopped agriculture funds from going to illegal immigrants.  Even though the tally board indicated that Republicans had won the vote, the Democrat in the speaker‘s chair said otherwise. 

And here‘s what went down.  Check this out. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  On this vote (INAUDIBLE)  The nays are 214.  The motion is not agreed to. 

(CROSS TALK)

(END VIDEO CLIP)

BARNICLE:  Oh, man, what pathetic people.  I thought I saw John Balushi in the background.  These people can‘t get out of Washington fast enough.  I don‘t know if there‘s anything to say about this.  Craig, start with you, around the horn.

CRAWFORD:  I‘ve always wanted Congress to be more like the British parliament.  I think the difference is, you know, they have bars in parliament.  At least we don‘t have bars where they could even get into worse fights.  What was happening here, Mike, is Democrats had instituted a new rule, which—in the past Republicans would hold votes open for a really long time to try to strong-arm some of their members to vote how they wanted. 

Now they‘re cutting these votes off quicker.  It worked the other way. 

They manipulated an outcome by closing a vote too soon, perhaps. 

BARNICLE:  You know what, who cares?  We‘re going to move on.

CRAWFORD:  That‘s more internals.  I‘m giving you these internals, man. 

BARNICLE:  Next up, a waitress whacks Romney at a New Hampshire diner.  On Thursday, Mitt Romney talked to a crowd about his plan to fight global AIDS.  In the middle of his talk, a waitress piped up and pounded Romney for focusing on the rest of the world at the expense of the United States. 

(BEGIN VIDEO CLIP)

MITT ROMNEY ®, PRESIDENTIAL CANDIDATE:  Despite what Michael Moore says, we are the envy of the world when it comes to health care technology and capabilities.  And we can reach out and help other nations. 

UNIDENTIFIED FEMALE:  Excuse me.  How about our nation?  how about the USA?  Come on.  

ROMNEY:  We‘ve done so with an enormous effort in a number of nations, in ways that aren‘t recognized.  I would like those to be better recognized.  I will tell you, before you leave, miss, with regards to our nation.  One of the things I‘m proud of being able to do in my state—you know as governor of the state next door—

(CROSS TALK)

ROMNEY:  Put in track a plan that gives everybody health insurance.  That was, in my opinion, one of the great things that had to happen.  I‘d like to see—

(CROSS TALK)

UNIDENTIFIED FEMALE:  -- co-payments.  After we pay our huge deductibles for our insurance and our cost for our prescriptions, there‘s nothing left. 

(END VIDEO CLIP)

BARNICLE:  Jay, you know, could you speak to the point that the coverage of campaigns has changed so drastically in the last four or five years.  And it‘s going to change even more over the next 15 months or so, people with cell phone cameras.  Your out there in a blogger‘s convention in Chicago, where a lot of the Democrats have attended, to speak to the bloggers.  And clearly, Romney is on a very shaky—some sort of video camera.  Is there any more privacy left at the campaign level? 

CARNEY:  I think now, if you‘re a candidate and you want to be totally safe, and assure that what you say is not going to be recorded or broadcast on the Internet, you have to have like one of those safe cones that they had on “Get Smart,” with that control.  Everything is so viral right now that you have to assume as a candidate that anything you say will be broadcast. 

And a moment like that, I think, was interesting for several reasons.  One, it was a Republican encountering one sort of anti-global sentiment within the Republican party, and also watching Mitt Romney proudly declare his success in bringing health care to Massachusetts, not something you hear him say very much on the campaign trail when he‘s talking to Republican audiences. 

So the moment captured a lot of value, I thought.  And I thought it was fantastic. 

MASON:  It showed his inability to get off his talking points, too. 

BARNICLE:  Craig Crawford, sorry Craig, your out of time.  Julie Mason, Jay Carney, thanks very much guys.  We appreciate it.  Chris Matthews returns Monday here on HARDBALL.  Right now it‘s time for “TUCKER.”

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

END   

Copy: Content and programming copyright 2007 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2007 Voxant, Inc. (www.voxant.com) ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and Voxant, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

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