updated 10/31/2007 12:11:37 PM ET 2007-10-31T16:11:37

Guests: Julie Mason, Jonathan Capehart, Ed Rendell, Howard Dean, Michael Nutter

CHRIS MATTHEWS, HOST:  Tonight: I could have been a contender.  Will Barack Obama hit the champ or hit the tank?  Tonight‘s the night.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  And welcome to HARDBALL, tonight from Drexler University in totally sunny Philadelphia.  Tonight at 9:00 o‘clock, the Democratic presidential candidates will mix it up in NBC‘s debate moderated by Brian Williams, joined by Tim Russert.  The debate will come to you live on MSNBC and will live streamed on MSNBC.com.  HARDBALL is back here, by the way, tonight at 7:00 PM, and a post-game show from 11:00 to midnight with all the candidates and the verdicts on who won.

It promises to be a great night in politics.  This is a decisive debate for Barack Obama, who promises to take swings at the frontrunner, Hillary Clinton.  Can Obama define Hillary as the hawk candidate of the status quo, the way things are, and make himself the face of the future?  More with a man who knows battle lines, the chairman of the Democratic national party, Howard Dean.

Plus, 2008.  Is Pennsylvania the new Ohio, the state to decide it all in 2008?  We‘ll talk to Governor Ed Rendell of Pennsylvania.

We begin tonight with HARDBALL‘s David Shuster with a preview of tonight‘s debate here at Drexler University.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Heading into tonight‘s debate, polls show the race for the Democratic nomination increasingly belongs to Hillary Clinton.  Six months ago at the first major Democratic debate, Clinton held a narrow 5-point national lead over Barack Obama, 36 to 31.  Now the same NBC/”Wall Street Journal” poll shows Clinton leading Obama nationally by 21 points, 44 to 23, with Edwards clocking in at 16.

The race is closer in Iowa, but both Edwards and Obama are showing signs they understand that now is the time to challenge Clinton head on.  Yesterday, Edwards condemned Clinton‘s links to special interests.

JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE:  Today, Senator Clinton has taken more money from Washington lobbyists than any candidate from either party, more money than any Republican candidate.  She has taken more money from the defense industry than any candidate from either party.

SHUSTER:  And Obama has been ratcheting up his criticism of Clinton for failing to speak truthfully about Social Security.

Sen. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  The other day here in Iowa, She skipped another chance to give a direct answer on this.

SHUSTER:  But Hillary refused to budge from her safe position of knocking President Bush.

UNIDENTIFIED MALE:  When George Bush threatened to privatize Social Security, Hillary was there, fighting every step of the way to stop him.

SHUSTER:  The issues that will likely produce the greatest fireworks tonight involve Iraq and Iran.  Last week, the Bush administration imposed economic sanctions on Iran, the harshest sanctions against any country in contemporary history, because of Iran‘s alleged nuclear ambitions and support for terrorism.  It came on the heels of a Senate vote to give President Bush more authority to target Iran.  Hillary Clinton supported the measure, and at the last debate, she was taken to task by Mike Gravel.

MIKE GRAVEL (D-AK), FORMER SENATOR, PRESIDENTIAL CANDIDATE:  And I want to congratulate Biden for voting against it, Dodd for voting against it.  And I‘m ashamed of you, Hillary, for voting for it.  You‘re not going to get another shot at this.

SHUSTER:  Because Gravel was not invited to tonight‘s debate, it will be left to Obama and Edwards to try and argue that Clinton‘s Iran vote was reckless.  On Iraq, Obama has had difficulties face to face drawing much of a distinction with Clinton, and at the last debate, both he and Clinton could not promise bringing all U.S. troops home from Iraq by 2013.

OBAMA:  But I don‘t want to make promises not knowing what the situation is going to be three or four years out.

SHUSTER:  Obama advisers say the distinction is simple.  If you want the Bush policies but with more competence, vote for Hillary.  If you want a change in policy, vote for Obama.  Still, Obama‘s inability to say it that simply himself has left his own supporters frustrated.  Nonetheless, the debate tonight is in the city of the Broad Street bullies and the ferocious Eagle fans.  It‘s also a city that gave the nation Rocky Balboa, the greatest underdog story in popular American culture.

Tonight, just 65 days before the voting begins in 2008, this debate has become a heavyweight prizefight, with the Democratic nomination possibly on the line.  Will Hillary be stopped?  Can she fend off the blows and pivot back, knocking out Obama and Edwards and bearing (ph) them for good?  All eyes are now focused on Philadelphia.

I‘m David Shuster for HARDBALL.

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.  Howard Dean is chairman of the Democratic National Committee.  Governor, thank you for joining us.

(CROSSTALK)

MATTHEWS:  You know you‘re in Philly...

(CROSSTALK)

MATTHEWS:  And these are the people that root for the Eagles.

HOWARD DEAN, DEMOCRATIC NATIONAL COMMITTEE CHAIRMAN:  That‘s right.

MATTHEWS:  They root for the Eagles...

DEAN:  And the Phillies.

MATTHEWS:  And the Broad Street bullies, the hockey team, the Flyers (ph).  This is a noisy, sometimes tough crowd.  Will the Democrats give us a great debate tonight?

DEAN:  Well, I think we always give you a great debate.  I think, you know, the big thing about the Democrats is they look like the rest of America.  The Republicans look like America in the 1950s, and our guys look like the future of America.  And it‘s particularly true among younger voters, who voted 61 percent for Democrats in the last election.

MATTHEWS:  What do you mean by the Republicans look like the 1950s, like they‘re all white guys?  Or what do you mean by that?

DEAN:  Well, that‘s part of it, but it‘s the same old tired stuff.  They all support the president on Iraq.  They all think Scooter Libby should have been pardoned.  They all supported the veto of the president‘s health insurance—I mean of our health insurance plan for kids.

MATTHEWS:  Yes.

DEAN:  And the Democrats not only look like what America really looks like in terms of ethnicity, Hispanic and African-American and women, you know, among the leading candidates for president of the United States in the Democratic Party, we look like America is.  They look like the—you know, the America from 50 years ago, and they think like America 150 years ago.

MATTHEWS:  Well, they‘ve got an Italian guy that‘s been married three times.  They got a Mormon guy running.  They‘ve got some diversity.

DEAN:  Yes, they have some diversity...

(CROSSTALK)

DEAN:  I‘m not touching that one with a 10-foot pole, Chris!

MATTHEWS:  Well, they‘ve got a Mormon guy who‘s been married once and a Catholic guy who‘s been married three times.  It‘s kind of mixed up.

DEAN:  Yes, it is a little mixed up.

MATTHEWS:  Let me ask you about your party.  Will Barack Obama take her head off tonight?

DEAN:  I‘d be surprised if anybody takes anybody‘s head off.  One of the things I‘ve been very pleased about is that our debates have been pretty civil.  I know that‘s a disappointment to the media, but...

MATTHEWS:  No, it‘s a disappointment to me personally.

(LAUGHTER)

MATTHEWS:  I want to know when we‘re going to have the anti-war party sound like the anti-war party.  Everybody voted last November for the Democrats that gave your party control of the Congress so that you‘d end this war.  I haven‘t noticed any change in the war policy.

DEAN:  Very hard to do when you have a president who vetoes everything and a determined minority in the Senate who stops everything from being voted on.

MATTHEWS:  You guys control the purse strings.  The president doesn‘t get a dime for this war unless the Democratic Congress gives him the dime.

DEAN:  We passed...

MATTHEWS:  Why don‘t you just cut off the money?

DEAN:  We passed George Bush exactly the bill the American people wanted, which is to support our troops but to give a particular timetable for getting out of Iraq, and the president vetoed it.  And the Republicans in the Senate have not allowed us to bring that bill to the president since that time.

MATTHEWS:  Why don‘t you just cut off the funding for the war?

DEAN:  You can‘t cut off the funding for the war.  The only way you can cut off the funding for the war is not to pass a budget of the United States, and I don‘t think anybody (INAUDIBLE) do that.

MATTHEWS:  Why not do that?

DEAN:  Because you shut down the entire government, and I don‘t think that‘s what the American people want.

MATTHEWS:  You can‘t just cut off the Defense Department budget and say, Stop?

DEAN:  You cut off the entire defense of the United States of America? 

I don‘t think that‘s what the public wants us to do.

MATTHEWS:  You can‘t cut off the war spending?

DEAN:  Look, the American people want us to get out of Iraq.  There‘s only way to get out of Iraq, and that‘s elect a Democratic president because every single one of the guys on the other side...

MATTHEWS:  OK, wait a minute—that sounds good...

DEAN:  It‘s true.

MATTHEWS:  ... like a good political statement...

DEAN:  It‘s absolutely true.

MATTHEWS:  ... but in a recent debate a couple of weeks ago, maybe a month ago, all the top contenders for the Democratic nomination, all of them said we‘d still be in Iraq at the end of their first terms.

DEAN:  They did not say that, Chris.

MATTHEWS:  In other words, until 2012, 2013, they‘d still be there.

DEAN:  They did not say that.  They said they couldn‘t promise to get out because they didn‘t have enough intelligence services...

MATTHEWS:  You mean they couldn‘t promise...

DEAN:  ... a their disposal to know.

MATTHEWS:  ... that this war wouldn‘t last 10 years?

DEAN:  No, they didn‘t.  What they—the question, the way it was asked, was, Can you promise every one of our troops will be out by 2013?  I think they will be, and I think any of those Democrats will get them out.  But that wasn‘t—the question wasn‘t will the war—the war will be over easily by 2013.  Some of the candidates believe there may be some need to keep a small garrison in Vermont.  In fact—excuse me, in Vermont—in Iraq.  In fact, most people, including sensible Republicans, believe that you‘re going to have to leave a garrison of special ops troops somewhere in the Middle East to deal with al Qaeda, which has moved into Iraq since George Bush sent troops there.

MATTHEWS:  Let me read you something that was said back, a while back, in 2003, in February.  “That the president”—that‘s President Bush—

“was given open-ended authority to go to war in Iraq resulted from a failure of too many in my party in Washington who were worried about political positioning for the presidential election.”

That was you, Governor.  You said that your Democrats gave this war authority to the president so that they could position themselves to run for president.  You were talking about Hillary, clearly.

DEAN:  Actually, she wasn‘t running for president at the time.

MATTHEWS:  Well, you were...

DEAN:  Chris, I think I had some other people in mind on that one.

MATTHEWS:  Kerry.  OK.  Well, were you right?  Did they, in fact, give away this war so that they could get elected president?

DEAN:  I don‘t know.  I think—you have to accept them, and I certainly do, at face value, that they gave the president authority to go to war because that‘s what you do when the president asks for it.  They had no idea the president was going to pay no attention to any intelligence.

MATTHEWS:  Why give a blank check to a guy who wants to go to war?

DEAN:  Well, because I think we hoped for more from this president and we were badly disappointed.

MATTHEWS:  If somebody says, I‘m thinking of robbing a bank, can I borrow your car, and they robbed a bank, are you responsible for robbing the bank?  Yes.

DEAN:  I think...

MATTHEWS:  The president was said he was thinking of going to war, they gave him the authority, and he went to war.

DEAN:  Let‘s not forget that we didn‘t know this president was the way he was at that time.  We thought he was like...

MATTHEWS:  OK, 80 percent of the American people said we were going to war at the time.   Hillary and John Kerry voted for that authorization.  Were 80 percent, four out of five Americans, right and they were wrong?

DEAN:  Well, you know, one of the things I learned in my life is that, I told you so, is a terrible...

MATTHEWS:  Well, I‘m going to say...

DEAN:  ... campaign slogan...

MATTHEWS:  ... you told us so.

DEAN:  ... but the fact is...

MATTHEWS:  Howard Dean, you told us so.  I give you credit because you were right.

DEAN:  Thank you.

MATTHEWS:  Let me ask you about the Democratic Party.  Will this election be the decisive factor in our foreign policy?

DEAN:  Yes.

MATTHEWS:  Will our foreign policy change if we have an election...

DEAN:  Absolutely.  The first way it will change—and I hope that our candidate, when she wins or he wins, will go to all these other countries, Latin America, the Muslim world and Europe, before they even take office and say, We‘re here for a different reason.  We‘re going to work with you in a positive way.  We‘re going to become citizens of the world.  And most importantly, we‘re going to regain the moral authority that America had from the end of World War I until George Bush went into Iraq.

It‘s going to require a Democratic president to do that.  We need to start over.  What the Bush Republicans have done is put us in a position in the rest of the world where people don‘t think we have moral authority anymore.  Having moral authority and moral legitimacy is part of defending America.  It‘s not just about well-equipped troops and well-trained troops, it‘s also about having the moral high ground, and we haven‘t had it since George Bush took us into Iraq and we need to regain it.  And the only way to do that is to be cooperative with other countries and not dismissive of them.

MATTHEWS:  Do you think the war in Iraq by us is an immoral war?

DEAN:  I think it‘s a huge mistake.  I don‘t—I mean...

MATTHEWS:  You said we have to regain the moral high ground.  Have we lost it?

DEAN:  We‘ve lost it, not so much because we went to Iraq, although that was a terrible blunder.  We‘ve lost it because the president wasn‘t honest with the American people.  The president and the Republicans were dismissive, insulting our allies whose help we need.  And they picked the wrong fights.

MATTHEWS:  You know, this presidency has been scarred by the conviction—not just the prosecution but the conviction of the vice president‘s chief of staff for perjury and obstruction of justice.  And he wasn‘t committing crimes at that time out of the line of duty.  He was doing them in the office, as part of his role in that office.

DEAN:  Right.

MATTHEWS:  Why has the administration been so successful in commuting the sentence of Scooter Libby and thereby making everyone forget that it ever happened?

DEAN:  I don‘t think, Chris, they were successful.  Among evangelical Christians, the culture of corruption that the Republicans have brought to Washington was the number one issue, more important than the Iraq war.  We got an increase of 10 percent among evangelicals probably on the issue of corruption.

MATTHEWS:  Is that Larry Craig and Mark Foley or what?

DEAN:  It‘s...

MATTHEWS:  Or it‘s spending money or what?

DEAN:  You know, the Mark Foley thing—it‘s interesting that Larry Craig—Larry Craig is different than Mark Foley.  Larry Craig they can survive.  There was an individual Republican that did something he shouldn‘t have done.  With Mark Foley, it wasn‘t the individual Republican act, chasing the pages around, which I think disgusted most people.

MATTHEWS:  Yes.

DEAN:  It was the fact of the Republican leadership in the House covered up for him and put their political self-interest ahead of the interests of our kids.  That‘s what killed the Republicans in the ‘06 midterms.

MATTHEWS:  Do you believe they have to put barriers up in the Minnesota men‘s room out there in the airport to keep senators from sliding under the stalls?

(LAUGHTER)

MATTHEWS:  They have, like, the wall in Israel.  They got to put a wall up to keep these guys from doing this stuff.  I‘m stunned by it.

DEAN:  Chris, I‘m not touching this one, either.

MATTHEWS:  Thank you, Howard Dean.  You were right.

DEAN:  We‘ll see you later.

MATTHEWS:  Anyway, thank you.

Well, the Democrats debate right here at Drexler University.  My father graduated from here in 1949.  My brother graduated from here.  I have another degree from here.  My other brother has a master‘s from here.  Drexler is big time!

And (INAUDIBLE) debate (INAUDIBLE) 11:00 Eastern, we‘ll be back to talk about who won, and the best part, who lost.  We‘re here in my hometown of Philadelphia with Governor Dean, head of the Democrats.  We‘re joined by Democratic candidate for mayor Michael Nutter when we come back.  Thank you.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to Philadelphia.  Actually, we‘re live here right now with the Democrats‘ debate tonight at 9:00.  (INAUDIBLE)  I have a real honor here.  I am here with really a great man.  And even though the election is not until next week, this man is the heavy favorite and a great guy.  He‘s the Democratic candidate for mayor of Philadelphia.  Philadelphia!  We skip a couple syllables, Mr....

MICHAEL NUTTER (D), PHILADELPHIA MAYORAL CANDIDATE:  Absolutely.

MATTHEWS:  ... Mr. Nutter.

MICHAEL NUTTER (D), MAYORAL CANDIDATE:  Chris, good seeing you.  Thank you.

MATTHEWS:  Congratulations.

NUTTER:  Thank you.

MATTHEWS:  What I—what I was—can everybody be quiet for a minute?  Anyway, nice try.  You know, one of the nice things about this city is that you really—in your primary election, really got a unity thing going.

NUTTER:  Yes.

MATTHEWS:  I mean, I think you got—just to be bluntly ethnic about it, you got about the same percentage of the black vote and the white vote, the Latino vote.

NUTTER:  Yes.

MATTHEWS:  Explain how you can unite the city because every big city has this challenge, a divide.

NUTTER:  Well, I think what we tried to do, we went everywhere.  I was a member of city council.  I had a diverse district.  I represented all my constituents.  We went to every forum, every neighborhood, and that‘s the way you bring people together.  And it was the same message—public safety, education, creating jobs.  That‘s a city agenda, but it‘s also a national agenda, and that‘s what I‘m certainly looking to hear.

MATTHEWS:  What are we going to do about the fact that in large cities like not just Philly, but Baltimore, places like that, we have this very high murder rate?  I mean, this city has been punished by about a murder a day or more.

NUTTER:  Yes.  It‘s a homicide a day, five shootings.  We have to aggressively go after illegal weapons.  We need some help certainly from the feds and our state about reasonable gun laws.  But also, we need more police officers.  Years ago, we had the COPS program.  We utilized it here in Philadelphia tremendously well under then mayor Rendell.  We need that kind of help from the federal government.  We also need jobs.  The issue of creating economic opportunity in cities, in metropolitan areas, as well as dealing with the ex-offender population, people—most of the people who go to jail come back.  We need to make sure...

MATTHEWS:  I know.

NUTTER:  ... that those folks are getting into jobs.

MATTHEWS:  Let‘s look at this hot (ph) thing here.  This was in “The Philadelphia Inquirer” today.  We came into town and we saw this, if we can come in on this.  This is the outgoing police commissioner.  You‘re replacing him, I assume.  If you get to be mayor, you‘ll have to replace him.  He‘s leaving.  He‘s taking a shot at you because you‘re really serious about people walking around the streets of this city carrying guns.

And I remember seeing—just to back up your side, I remember we had a very bad crime scene a couple months ago in this city, and they stopped five cars.  The first five cars were all armed, and they weren‘t related to the crime.

NUTTER:  No.

MATTHEWS:  It‘s just like a random sample.

NUTTER:  Absolutely.

MATTHEWS:  You stop five (INAUDIBLE) black and white both.  How do you get the guns off the streets?

NUTTER:  We‘re going to have an aggressive police force legally going after weapons.  Most of the weapons involved in crime in Philadelphia are illegal weapons.  There are straw purchasers.  There are people going in, buying weapons and then selling them on the streets of Philadelphia.  We‘re going to aggressively pursue people who have weapons.  We‘re also going to keep better track of our ex-offenders who are repeat offenders, violations of parole and probation.  Those are the kinds of tactics that we have to use.  They are legal, but we have to change the policing strategy here in Philadelphia.

MATTHEWS:  OK...

(CROSSTALK)

MATTHEWS:  Commissioner Timoney—I told you this before.  Commissioner Timoney was a very important—he was commissioner here for years.  He said you can‘t do much about domestic fights.  People fight with each other at home.  Booze is involved.  Drugs is involved.  You can‘t do much about “dissing” situations, where one kid just feels disrespected by another.  This is just instinctive behavior.

But you can do something about gang and turf. 

NUTTER:  Absolutely.

MATTHEWS:  Because if one kid get killed in what looks like a gang fight or a turf fight over drugs, you have got to get street and you have got to get police there.

NUTTER:  Yes. 

MATTHEWS:  Are you going to be able to enforce this thing, where you see a kid walking down the street, four or five kids in a revenge situation, and he‘s got a bulge in the side of his pocket?  Can you stop him and frisk him? 

NUTTER:  Absolutely. 

An officer has to have reasonable suspicion and be able to articulate why they‘re doing.  But good intelligence, good police intelligence, you know, when the first crime happens, if you know the networks and you know the gangs...

MATTHEWS:  Yes. 

NUTTER:  ... and the relationships, you know where to go pretty much for that next retaliatory hit.

MATTHEWS:  The outgoing chief says that is going to cause disunity with the community.  He says he has built great relations with the community...

NUTTER:  Yes. 

MATTHEWS:  ... over, I guess, the African-American community, he‘s implying, over police role—the police role.  And he says, if you stop and frisk people, that‘s going to cause disunity.  Is he right? 

NUTTER:  No.

What is causing disunity is that we have one person killed and five shot every day, that citizens are afraid, in many instances, to be out on the street, that they are prisoners in their own homes.  That is what is causing disruption.

And we don‘t have officers on the street, patrolling on a beat situation or on bicycles.  They have become disconnected from the community.  I‘m bringing community policing back.  The only people who have to worry about anything are folks carrying illegal weapons, because I‘m coming after them. 

MATTHEWS:  OK. 

Let me ask everybody here.  You all go to Drexel.  Just the people who go to Drexel, do you have a security challenge here in this neighborhood? 

(CHEERING AND APPLAUSE) 

MATTHEWS:  Are you drunk? 

(LAUGHTER)

MATTHEWS:  Are you drunk? 

(LAUGHTER)

MATTHEWS:  No.

Everybody but him answer.  Everybody but the red-faced guy answer.

(LAUGHTER)

MATTHEWS:  Do you have a security challenge here in West Philly? 

UNIDENTIFIED MALE:  Yes.

MATTHEWS:  Yes, I hear you.  Thank you. 

NUTTER:  Yes.  That‘s the deal, every day. 

MATTHEWS:  And maybe you‘re the security challenge right there. 

(LAUGHTER)

MATTHEWS:  Maybe you are, buddy. 

(LAUGHTER)

MATTHEWS:  Let me ask you about big cities. 

NUTTER:  Yes. 

MATTHEWS:  Are big cities going to make it?  I mean, I know so many in this city where the people, regular people, I mean, middle-middle people, move out.  Working people move to New Jersey.  They move to Montgomery.  They move to Bucks County. 

NUTTER:  Right. 

MATTHEWS:  People just move out.  D.C. is like that, where people just move.  They make middle-class incomes.  And the first thing they do is say, get out of the tough neighborhoods. 

NUTTER:  Cities are, though—are the center of a lot of action.  There‘s a lot of life and activity.  There‘s growth and development, education.  We‘re in a center of educational excellence here in Philadelphia and certainly in West Philadelphia. 

MATTHEWS:  Yes. 

NUTTER:  We have 83 of the finest colleges and universities anywhere in the United States. 

MATTHEWS:  I know. 

(CROSSTALK)

MATTHEWS:  ... all the stuff in the world to make it.

NUTTER:  So, it‘s...

MATTHEWS:  Is this state going to go Democrat or Republican next November? 

NUTTER:  It‘s going Democrat. 

MATTHEWS:  OK.  Thank you very much. 

(CROSSTALK)

(CHEERING AND APPLAUSE) 

MATTHEWS:  Michael Nutter, Democratic candidate for mayor of this city, who is voting next week.  The city is voting.

And, so, what else is new in politics today?  Well, we will be right back with that one in a moment. 

Thank you. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

So, what else is new out there in politics? 

Mitt Romney is attacking Hillary‘s lack of executive experience, and, more important, reminding everybody of Monica Lewinsky—quote—this is Romney—“She‘s never had the occasion of being in the private sector, running a business, or, for that matter, running a state or a city.  She hasn‘t run anything.  And the government of the United States is not a place for a president to be an intern.”

Intern.  Isn‘t that a nice little postcard from the past? 

Speaking of vice, in response to leading contenders‘ stepped-up attacks against Bill Clinton—rather, Hillary Clinton, Bill Richardson said today—quote—“I think that Senators Obama and Edwards should concentrate on the issues and not on attacking Senator Clinton.”

Excuse me.  Is Bill Richardson now running for vice president? 

Finally, be on the lookout.  Dick Cheney is out hunting again. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  The West Wing answer to Elmer Fudd, complete with popgun, just went on a pheasant hunting trip in New York State, and was trailed the entire time by an ambulance.  The ambulance was for people, we‘re told.  The pheasants had to fend for themselves.

(LAUGHTER)

MATTHEWS:  Up next:  Can Hillary win here in Pennsylvania?  Will the Keystone State be the key battleground in 2008?

All that ahead, with Pennsylvania Governor Ed Rendell.

You‘re watching HARDBALL, live from Philadelphia, only on MSNBC.

(CHEERING AND APPLAUSE) 

(COMMERCIAL BREAK)

MIKE HUCKMAN, CNBC CORRESPONDENT:  I am Mike Huckman with your CNBC “Market Wrap.”

And stocks fell, as Procter & Gamble issued a profit warning.  Consumer confidence dropped to a two-year low.  And the Federal Reserve began a two-day meeting on interest rates.  The Dow Jones industrials lost 78 points.  The S&P 500 fell almost 10 points.  And the Nasdaq was down just a fraction. 

A “Wall Street Journal” article today raised concern the Fed may not deliver an interest rate cut when it ends it two-day meeting tomorrow afternoon.  However, a cut of a quarter-of-a-point is still pretty widely expected. 

Meantime, oil fell $3.15 from yesterday‘s record high, closing today at $90.13 a barrel. 

And it is official.  Merrill Lynch CEO Stanley O‘Neal is out, after Merrill lost billions of dollars in the subprime mortgage meltdown.  But O‘Neal walks a way with stock awards and benefits worth more than $160 million.

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

MATTHEWS:  Welcome back to HARDBALL, live from Philly. 

In each presidential race, on state proves pivotal.  In 2000, it was Florida, of course.  In 2004, it was Ohio.  In 2008, many people think it‘s the state right here.

And Ed Rendell is in his second term as governor.  He is a very popular guy.  He was mayor of this city.  In fact, he may have been the best mayor in this city for years.

Thank you for joining us. 

GOV. ED RENDELL (D), PENNSYLVANIA:  My pleasure, Chris.  

MATTHEWS:  You‘re very popular here. 

(LAUGHTER)

MATTHEWS:  I have no idea what they‘re saying. 

Speak—please speak with one voice. 

(LAUGHTER)

MATTHEWS:  Just kidding. 

Do you want to hear from him?  Do you want to hear from him? 

(LAUGHTER)

MATTHEWS:  Are you done? 

OK.  Let‘s listen to the governor for a second. 

All right, thank you.

Governor Rendell, Pennsylvania, how important is it? 

RENDELL:  Well, I don‘t think a Democrat can win an Electoral College scenario, unless it turns into a complete rout, without winning here. 

MATTHEWS:  Pennsylvania is key to a Democratic victory?  Is that why they‘re all talking up Giuliani, because they think he can steal a state from the Democrats? 

RENDELL:  Well, I think...

MATTHEWS:  That‘s the whole Giuliani rationale, isn‘t it? 

RENDELL:  ... New Jersey, Pennsylvania, Connecticut, there are states which we have won pretty consistently in the last few presidential elections that they believe Giuliani can win. 

But you and I discussed on your show about three weeks ago he has wounded himself terribly in terms of competing in the Northeast because of stances he‘s taken. 

MATTHEWS:  Yes. 

RENDELL:  He‘s begun to waffle. 

He‘s still pro-choice, but he will only appoint strict constructionalist judges, like Clarence Thomas and Antonin Scalia.

MATTHEWS:  I know.

RENDELL:  Tell that to the folks in the Philadelphia suburbs and see how it plays.  He‘s been a solid supporter of President Bush and his conduct of the war in Iraq. 

MATTHEWS:  Yes. 

RENDELL:  That just won‘t cut it here among independent voters, moderate Republicans and Democrats. 

MATTHEWS:  Well, let me suggest something that may be harder for you to deny.  One reason why you‘re immensely popular in the suburbs of Philadelphia, the reason that you, mayor of Philadelphia—you‘re smiling at me because you know it‘s why you‘re popular, because you saved the city from ruin. 

People in the suburbs...

(CHEERING AND APPLAUSE) 

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  All right.  OK.

(CHEERING AND APPLAUSE) 

MATTHEWS:  People in the suburbs may have moved out because they have made a few bucks, so they want to live in a safer neighborhood, and they may move to New Jersey.  They move to Bucks or to Montgomery or Delaware.

RENDELL:  Right. 

MATTHEWS:  But they love their city.  And you saved the city. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  Rudy Giuliani—Rudy Giuliani enjoys that same kind of popularity in the suburbs, because people want to go back to the old neighborhood.  They want to be able to walk around it without getting hurt.  They love it.  They love their cities.  That‘s why Rudy is popular. 

Touche.  I‘m challenging you with your own strength.

RENDELL:  No, no, I think that‘s true, but I don‘t think people vote for president based on what someone did in a job that‘s one or two stages removed. 

I think they vote on what they‘re talking about doing now.  And, if I‘m a suburban voter, and I care about a woman‘s right to choose, I care about a lot of issues, when I hear someone say they‘re going to appoint justices like Clarence Thomas, that scares the living bejabbers out of me. 

MATTHEWS:  Do you think he‘s going to appoint pro-life judges? 

RENDELL:  Yes. 

MATTHEWS:  Why?  He says he‘s pro-choice.

RENDELL:  He said he‘s going to appoint strict constructionalist judges.  That‘s a code message to the far right that:  Don‘t worry.  I may have been pro-abortion-rights in the past, and I‘m not going to change...

MATTHEWS:  You are building up a scare argument, because, you know, Roberts is the chief justice right now. 

RENDELL:  Right. 

MATTHEWS:  He‘s not going to get rid of Roe v. Wade.  He‘s not saying we‘re going to roll back the clock.

RENDELL:  Oh, listen, Chris, I think...

MATTHEWS:  He‘s never said that.

RENDELL:  ... if you look at the political nature of the court on the Texas redirecting case, if there ever was a case to demonstrate that redirecting had gone beyond the pale and had become so political, denied people‘s rights, it was Texas. 

Did we get votes from Justice Roberts or Justice Alito?  No, we didn‘t. 

MATTHEWS:  OK. 

RENDELL:  This court has become very doctrinaire.  And I think Roe v.

Wade is in trouble.

It‘s certainly in trouble if Justice Stevens goes and is replaced by a pro-life judge.  It‘s certainly in deep trouble.

MATTHEWS:  Yes.

Let me ask you about this war overseas.  And I know you‘re governor.  You don‘t have to deal with wars, although I understand people are voting for the war on every ballot position they get ahold of.

RENDELL:  Right. 

MATTHEWS:  You know, Governor Haley Barbour told me that, down in Mississippi, that almost half the voters are voting on the war when they vote for governor.  So, you know about the issue politically.

RENDELL:  Sure.

MATTHEWS:  Do the Democrats have to offer a clear alternative to Bush next November?

RENDELL:  I think they do.

MATTHEWS:  A clear alternative, not a smarter version, a clear alternative?

RENDELL:  No, I think they do. 

I think just to say that the administration has been incompetent in handling the war, and we will be competent, that‘s not enough.  They have to have a plan.  Whoever our nominee is has to offer a plan that has a reasonable chance of getting American troops out much more quickly than the Bush administration.  And I believe our candidates will do that. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  Well, any—any dunce can order—as president, any dunce could order the American Air Force to bomb Iran.  That takes no intelligence, not guts at all. 

RENDELL:  No.  None.

MATTHEWS:  It doesn‘t take wisdom or anything.

But which of the candidates will see through to the opportunities that lie ahead, so we can deal with that situation without going to a conflagration in the Middle East? 

RENDELL:  I think all...

MATTHEWS:  Who can think it through? 

RENDELL:  Well, I think all of our candidates will.  And you just have to look at Korea.  We didn‘t bomb the heck out of Korea.  We sat down the.  Finally, the Bush administration and negotiated with Korea. 

MATTHEWS:  Yes. 

RENDELL:  They brought the other nations in.  And look what‘s happened.  We have essentially begun the process of dismantling their nuclear... 

MATTHEWS:  Right. 

RENDELL:  Now, is Iraq—is Iran a little crazier than Korea? 

Probably so.  But you have got to try diplomacy. 

Wesley Clark said this morning on MSNBC with Andrea Mitchell—he said, you only think about bombing and getting rid of nuclear capability that way as a last, last, last resort. 

MATTHEWS:  OK. 

Last question.  For Hillary Clinton—you‘re backing Hillary Clinton, right? 

RENDELL:  No, I‘m neutral so far.

MATTHEWS:  You‘re not backing anybody?

If Hillary Clinton is the nominee of your party—and you have been chairman—does she need to have a running mate with a strong national security background, like a Wesley Clark, like a Jim Webb?  Does she need to balance that off with somebody with that clear-cut military history, since she hasn‘t been in the military? 

RENDELL:  No, I don‘t think that‘s the case. 

I think Hillary has set out positions that have clearly, I think, indicated to the American people a sense of strength when it comes to military issues.  Hillary Clinton—people don‘t know this—she volunteered.  She asked to be put on Military Affairs as one of her committees when she first came into the Senate.

MATTHEWS:  I know that.  So, she doesn‘t need a military guy?

RENDELL:  I think she‘s demonstrated strength.

MATTHEWS:  OK. 

Then, what she needs to have, it seems to me, in a political game is someone to answer the question you raised as we began this very important conversation this afternoon.  You said the Giuliani danger to the Democratic Party is to pick up blue states like New Jersey, Pennsylvania...

RENDELL:  Connecticut.

MATTHEWS:  ... and Connecticut. 

I look at a man here in front of me, a big, beefy kind of guy, a very good-looking guy, who would be the perfect running mate for Hillary Clinton, dynamite, perfectly placed...

(CHEERING AND APPLAUSE) 

(LAUGHTER)

MATTHEWS:  ... to stop Rudy Giuliani in his tracks. 

Are you that man, Ed Rendell? 

RENDELL:  No, I‘m not that man.

MATTHEWS:  Why?  Why are you not?               

RENDELL:  Because I can do all I need to do to help Hillary carry Pennsylvania right here as governor.  She doesn‘t need me.  She needs a Midwesterner or a Southerner.

MATTHEWS:  How many people would like to see Ed Rendell run with Hillary Clinton? 

(CHEERING AND APPLAUSE) 

MATTHEWS:  The people!

(CHEERING AND APPLAUSE) 

(LAUGHTER)

RENDELL:  It‘s a hometown crowd.

MATTHEWS:  I know it is. 

Thank you.  You‘re great.  I love you, Ed.

RENDELL:  Sure.

MATTHEWS:  Ed Rendell, the governor of Pennsylvania. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  Will Obama get tough tonight?  Will Hillary slip up?  Whew. 

The roundtable joins us next to pregame tonight‘s Democratic debate. 

This is HARDBALL, live from the campus of Drexel University in Philly, only on MSNBC. 

(CHEERING AND APPLAUSE) 

(COMMERCIAL BREAK)

MATTHEWS:  We are back live from Philadelphia, where tonight at 9:00

eastern, the Democratic presidential candidates debate right here at Drexel

University.  We‘re joined by the round table, the “Houston Chronicle‘s”

Julie Mason, MSNBC‘s chief Washington correspondent Norah O‘Donnell and

Jonathan Capehart, who is down at the “Washington Post‘s” news room, where

no, you‘re on my set down there.  There you are, Jonathan.  You‘re on my set. 

I‘m going to get to you, but Norah first.  Norah‘s our chief correspondent.  Norah, tonight, set it up. 

NORAH O‘DONNELL, MSNBC CHIEF WASHINGTON CORRESPONDENT:  We have 65 days until the Iowa Caucuses.  New Hampshire is going to follow several days thereafter.  This might be the last best chance that Senator Barack Obama or Senator John Edwards has to make the case that they are better than Senator Hillary Clinton.  The last poll showed her about 30 points ahead.  Senator Obama has indicated that he plans to step up his criticism tonight, although his advisors say it‘s not going to be a steel cage death match, that everyone in Washington has blood lust, but that‘s not going to happen. 

MATTHEWS:  We just want a debate, that‘s all.  All I want is a debate.  I want it to be clear at the end of the night where each candidate stands, so that someone can pick a nominee with some intelligence.  What do you think Julie?

JULIE MASON, “HOUSTON CHRONICLE”:  I don‘t think you‘re going to get that tonight. 

MATTHEWS:  Why not? 

MASON:  There‘s too many candidates.  The debate formats have been terrible.  It‘s just talking point forums, zingers at each other, especially tonight.  It‘s going to be rough.  But it‘s not going to be an exchange of solid ideas. 

MATTHEWS:  Are they allowed under the rules, as you understand them, to engage with each other? 

MASON:  Sure, why couldn‘t they?  They try.

MATTHEWS:  Why don‘t they do it? 

MASON:  Because they‘re more about themselves.  Tonight they‘re going to be trying to engage with Hillary Clinton, but not on ideas. 

MATTHEWS:  Why don‘t they turn to Hillary Clinton and say, why did you vote for the war?  Why did you vote for the Kyl/Lieberman vote to allow an argument that we could go to war with Iran?  Why do you keep voting the hawkish position on everything? 

MASON:  Wouldn‘t that be exciting?  Maybe they will do that. 

MATTHEWS:  Let me go to Jonathan.  I would just suggest, not that I‘m in their training corner, but if I were the corner man tonight with a bucket and a towel over my shoulder, I might say to one of the guys who really would like to be the Democratic nominee, tonight‘s your night, kid. 

JONATHAN CAPEHART, “THE WASHINGTON POST”:  You know, Chris, this whole set up—I‘ve been watching Super Tuesday all day, and I keep thinking about the scene from the movie “Bring It On” where the two feuding cheer leading squads are facing each other, and one of them says, when you go to nationals, you better bring it.  And I think what we‘re seeing now is that Barack Obama has to bring it.  If he doesn‘t bring it—I think there‘s a joke in there—if you don‘t bring it, it‘s already been broughten (sic).  But the joke misses, but he‘s got to—

MATTHEWS:  No, we got it.  The younger people here got everything.  I watch older movies.  Go ahead. 

CAPEHART:  He really has to meet expectations.  The expectations are really, really high. 

(CROSS TALK)

O‘DONNELL:  The thing is, Chris, I think it‘s a little bit unfair to say that Senator Obama and certainly Senator Edwards have not been drawing contrasts.  They have been drawing contrasts on the campaign trail.  But I think what people want to see tonight in the debate is they want to see from Barack Obama, and why they have this blood lust, is they want to see passion from him.  And that‘s what people feel is missing. 

This is a man who talks about the politics, and they want to know how passionately he wants the White House.  He‘s inspired so many young people.  There are hundreds of thousands of people contributing to his campaign.  He has to show the appropriate passion tonight, that he really—despite the fact that he doesn‘t have a great deal of experience—that he wants it so bad, he wants to be president so bad that he‘ll do just about anything to get there, meaning, in terms of comparing himself and contrasting himself with Senator Clinton or with Senator Edwards. 

MATTHEWS:  Julie, what do you think? 

MASON:  I completely agree.  Norah‘s right on the money about that.  He‘s been lacking the passion.  It‘s been sort lackadaisical, all this positive talk about optimism.  That‘s great stuff.  But when you‘re dueling with Hillary Clinton and John Edwards, you have to have a little more fire. 

MATTHEWS:  You know, I‘ve been through more of these than you guys and I‘ve got to tell you, it reminds me so much of Gene McCarthy in the ‘60s.  And somebody said to me this morning at breakfast Adlai Stevenson.  It seems like the idealistic person, Jonathan, in the Democratic fight always is diffident.  They‘re passionless.  They may be wonderful at drawing a picture, but there‘s no punch to it. 

CAPEHART:  OK, punch is probably the right word, but I would have to disagree with all of you in your description of Barack Obama not being passionate.  That‘s what‘s been driving his campaign.  When I have talked to friends here, there and everywhere in the country, and they talk about Barack Obama, they talk about this man who has this vision for the country, where he thinks the country to be, where he wants to bring the country. 

I think the problem is, as Chris said, there‘s been no punch behind the passion.  I think if Barack Obama wants to translate that passion into punch, he‘s going to have to do more than just talk about the politics of hope.  He‘s going to have to say exactly, specifically what he‘s going to do. 

MATTHEWS:  By the way, we have this conversation for people watching who might be upset—we‘re trying to tell people what to do—he doesn‘t have to do anything if he doesn‘t want the nomination.  He can do anything he wants.  He can go back to being senator from Illinois.  He‘ll have a lot of campaign money left over.  He‘ll be very well known.  People will read his books.  They will think well of him. 

But if he wants to be the candidate, the numbers in the polling show the problem he has.  He‘s slipping down to where Jesse Jackson was in ‘84 and ‘88.  He‘s running as an also ran.  That‘s where he is right now.

MASON:  Not in Iowa.  In Iowa, he‘s doing well.  And he has a chance in Iowa.  Anything can happen.

MATTHEWS:  Iowa is odd.  Iowa is odd.  They‘re very anti-political out there.  They don‘t like politics. 

MASON:  I agree. 

MATTHEWS:  They are so National Public Radio out there, they think if you actually charge that there‘s a difference between you and the other candidate, you‘re not being fair.  I don‘t get it.  This is Phillie, by the way.  There‘s a different mood here. 

O‘DONNELL:  I do still think that it is important to look at the polling in Iowa and it is still important to look at the polling in New Hampshire.  Those states are first in the nation for a reason, and it is true that these national polls, which show Senator Clinton so far ahead, are a sample of a thousand adults out of close to 300 million people in this country. 

So there is still, you know, 65 days to go.  And it is still possible that he may do very well in Iowa, and the whole dynamic of this race will change. 

MATTHEWS:  I don‘t think so.  That‘s an assumption a lot of people make that there will be what‘s called the slingshot effect.  I would argue that—I think people really have a strong fix on Hillary Clinton.  I think what makes her very hard to catch is people have had a very good look at Senator Clinton over the years.  She‘s been in the public exposure since 1991. 

They‘ve been looking at her for 16 years.  They‘ve made a judgment about her.  And in the Democratic party, that‘s a positive judgment. 

O‘DONNELL:  And they haven‘t made a full judgment about Obama.  Still there are some people who don‘t totally know about him.  How then do you account for—and I‘m not arguing his rap—how do you then account for the number of contributors to his campaign? 

MATTHEWS:  They‘re idealists like me.  They‘re idealists.  give big money because they believe in big causes.  They believe he will deliver us from the current politics.  But the Democratic party, as Ron Brownstein of the “L.A. Times” has pointed out very brilliantly, is always a fight between the idealists and the interest group people.  And the interest group people always win.  And the idealists, Tsongas, Gene McCarthey, Bobby Kennedy, those people—

MASON:  Democrats want somebody who is going to win, not an idealist. 

They want someone who can get in there and fight. 

MATTHEWS:  OK, let‘s talk about this state of Pennsylvania.  First of all, Jonathan, your thoughts first on this; is this state in play?  Can Pennsylvania be picked up by the Republicans if Giuliani is at the head of the ticket? 

CAPEHART:  It depends on who the Republican is.  If the Republican is Mayor Giuliani, then I think actually it is in play. 

MATTHEWS:  What do you think? 

O‘DONNELL:  Well, Philadelphia is the purplest of the purple states, I guess, and certainly Giuliani would have a real shot in this state. 

MATTHEWS:  You know why?  It‘s ethnic.  It‘s gritty.  It‘s suburban, the state.  And it has a real attitude about crime and big city stuff, and it‘s kind of, sort of a broad street bully attitude, if you ever watch the Philly fans at work.  I mean, this is a little bit gritty out here.  It‘s a Roman coliseum and they ain‘t rooting for the Christians either. 

We‘ll be right back with the round table.  You‘re watching HARDBALL live from Philadelphia, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the round table.  I want to go to Jonathan first, and then to Julie, then to Norah, in order.  I want you all to tell me what to look for tonight, in addition to what looks to be the possible mix-up between Barack Obama and Hillary Clinton, perhaps John Edwards. 

Jonathan, let‘s give the other fellows a chance here, the other candidates Biden, Richardson, Dodd, et cetera.  What are we expecting to hear from them?  They‘re still in this fight, as far as they‘re concerned.  They‘ve got their spouses.  Jill Biden is out there in Iowa.  Jackie Claig (ph), the wife of Chris Dodd—They‘re living full time in Iowa.  They‘re trying to win this thing.  What do they have to do to get in this race? 

CAPEHART:  I think Norah was saying this either on this show or earlier in the day—this is the last chance that Barack Obama and John Edwards have to distinguish themselves, and I think actually that‘s the case for everybody in the debate tonight.  That‘s all I have to say on that. 

MATTHEWS:  Let me go to Norah.  I‘ve watched a couple of things.  No, I‘m sorry, you‘re next, Julie.  Julie, what about—he dodged the question completely.  Let me ask you what Richardson is up to.  A lot of people like Bill Richardson.  He‘s sort of an interesting case with a tremendous background in government, diplomacy.  He‘s been on a lot of harrowing missions.  He‘s picking up speed a little bit out there. 

MASON:  He just can‘t seem to get any traction.  He‘s like Derrick Smalls (ph) from Spinal Tap—

MATTHEWS:  Isn‘t he in double digits in Iowa?

MASON:  Yes, but he‘s not within range.  He‘s not within striking distance.  He could come in third. 

MATTHEWS:  Is he going for VP? 

MASON:  Yes, definitely.  Clearly he must be.

MATTHEWS:  Definitely?

MASON:  Yes.  He‘s got to be. 

MATTHEWS:  You‘re so definitive.  I noticed that he was defending Hillary Clinton today against what we expect to be an attack from Obama and from Edwards tonight. 

MASON:  Right, telling them to cool it, calm down. 

MATTHEWS:  What‘s that about.  It looks like he‘s playing blocking back for her.

MASON:  He‘s neither fish nor foul.  He‘s neither going after her or going after it for himself.  He‘s just -- 

MATTHEWS:  So Norah, you‘re Hillary Clinton and you‘re watching this guy all of a sudden go from offense to defense—all of a sudden he‘s defending you.  Do you put him on your little short list and say, well he‘s trying.  What do you do? 

O‘DONNELL:  Perhaps.  I mean, perhaps that‘s a calculation by some of these other men in the race, that they have no chance of winning and that they might as well think about a cabinet position or the vice presidency.  But it is true, I mean, Senator Clinton has a big bull‘s eye painted on her back tonight.  It‘s not just Obama.  It‘s also Senator Edwards, who has been very tough on the campaign trail. 

Biden said something very tough about Senator Clinton the other day.  So I think the real interesting thing would be which one of these men comes to her defense tonight, perhaps.  That would be interesting. 

MATTHEWS:  Why would they do it? 

O‘DONNELL:  Perhaps to set themselves apart.  She is so far out there, and that has really been sort of the challenge in her campaign.  I talked to her campaign chairman tonight, who said she is going to be positive.  So I bet she has some—

(CROSS TALK)

O‘DONNELL:  I think she is going to avoid directly engaging one of these other candidates, so as not—to sort of appear above it all. 

MATTHEWS:  So when someone takes a shot at her, she clinches? 

Jonathan, you have a thought about what Hillary‘s strategy will be? 

CAPEHART:  Chris, Norah is right.  She has a bull‘s eye on her back.  not just with Democrats, but with the Republicans.  And I wondered tonight if there‘s anything any of the other candidates on the stage can say to her that would knock her out of the box, that would completely throw her, that would give you one of those fantastic debate moments.  Quite frankly, I don‘t know—I don‘t know what it could be. 

That‘s why I think the strategy—the Obama people saying he‘s going to get tough with her—I just don‘t know what‘s that going to look like. 

MATTHEWS:  Well, I suggested last night, I may be wrong—Go ahead Norah. 

O‘DONNELL:  I think it‘s more likely that one of the areas that she could be vulnerable tonight is on the issue of being specific when it comes to Social Security.  And that‘s what she‘s been attacked by John Edwards for weeks on.  It‘s what Obama has recently picked you up on.  It‘s something Tim Russert challenged her on in the last debate.  She might have to get more specific tonight.  If there are issues that she is questioned on where she fails to talk about specifics, because she has resisted that in the past.  That might be an area where writers like, you know, Julie have a big graph or a second graph in their piece tomorrow, that Hillary doesn‘t get specific.

MATTHEWS:  Have you noticed, fellows—fellow and ladies that a lot of what she‘s done is the Bill Clinton game plan, which was straddle the issue of the first Gulf War.  Remember, he supported it when people say he could have gotten out of supporting it, but with a different argument.  He was very close to straddling that issue.  Don‘t give any commitments on Social Security reform.  Let Tsongas do that.  Be very pro Israeli.  Obviously, Democrats tend to be that.  Most Americans tend to be that.

But basically always posturing in the safe position.  The danger is, of course—and I‘ll go back to what you said, which is the danger is in being safe and fearful on every issue, she looks like the status quo.  She doesn‘t look like she‘s going to take this country to a new place.  Isn‘t that a problem? 

MASON:  That‘s true.  For now it seems to be a formula that is working.  Maybe farther down the road she‘s going to have to show more of her card.  But right now, by not giving them consequences, by not allowing them to be on the same footing as her, she‘s been able to—

MATTHEWS:  You know why?  One reason is that this panel of two women and one male is a lot like the Democratic party today.  It‘s 60 percent women.  If she just does well among women, she‘s unbeatable. 

O‘DONNELL:  Who told you that? 

MATTHEWS:  Norah, it must have been you.  Thank you, Julie Mason, Norah O‘Donnell, chief Washington correspondent.  Jonathan, thank you.  We‘ll be right back in an hour at 7:00 Eastern for a live edition of HARDBALL here at Drexel, and then at 9:00 Eastern it‘s the fight in Philly, as the Democrats debate.  Stay with us until 11:00 when we talk about the winners and losers.  In fact, at 11:00 tonight, we‘ll tell you who won.  Right now it‘s time for “TUCKER.”

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

END   

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