updated 1/30/2009 2:57:21 PM ET 2009-01-30T19:57:21

Guest: Chris Matthews, Chris Van Hollen, Kent Conrad, Tom Andrews, Todd Harris; Joe Trippi, John Harwood, Linda Sanchez, Maureen Santora, Al Santora, Eli Lake High: House votes on the economic stimulus bill.

DAVID SHUSTER, HOST:  Chris, thank you for sticking around.  This is such a fascinating day, as you‘ve pointed out.  And both sides of the aisle with this huge vote in the House this hour on the economic stimulus plan. 

But as that vote starts to take shape, Chris, I want to ask you about something you just raised, and that is this issue of a Republican leadership vacuum.  You played the clip of Phil Gingrey and Rush Limbaugh.  Is there such a vacuum, and does this just prove it? 

CHRIS MATTHEWS, HOST, “HARDBALL”:  Well, the fact that a congressman who‘s elected by, you know, 600,000 some people or so comes on this program and says something, and then backtracks because of some Poobah—I mean, Limbaugh is a genius, of course, politically, because of the way he gets his constituency together.  But it did seem a little bit below what he had to do to win back the good graces of Limbaugh, which he did today. 

SHUSTER:  Well, and here was the full screen that Gingrey put out in paper form.  He said, “Now more than ever, we need to articulate a clear conservative message that distinguishes our values and our approach from those of liberal Democrats who are seeking to move our nation in the wrong direction.  Rush Limbaugh, Sean Hannity, Newt Gingrich and other conservative giants are the voices of the conservative movement‘s conscience.”

What do you make of that? 

MATTHEWS:  Giants?  Ha!  Well, they have big audiences, let me put it that way. 

I think Rush Limbaugh plays brilliantly to his constituency—traveling salesman.  I know how he does it.  He‘s a support group.  Nobody else roots for him.  He does. 

Everything he says is brilliantly tuned to that constituency against -

the trouble I have with people like that is they‘re never as tough on the rich people as they are on the poor people.  And I think it‘s easier to go after the poor people, people who have nothing who get a tax break or tax credit, and they‘re struggling, and they get to work. 

By the way, I always say to people, “You think poor people don‘t work?  Come to Washington at 6:00 in the morning and see who‘s waiting for a bus to go to work.”  Packed.  Every street corner, people are waiting on buses to go to work in the morning. 

These are poor people working for very low income.  They work 40, 50, 60 hours a week, and they make very little money to come home with.  But they show up for work every day and they get up very early after taking care of their families.  And then they‘ve got to go home and take care of their families when they do get home at 6:00.

They work very hard.  The idea that poor people don‘t work as hard as rich people is crap. 

SHUSTER:  I agree.

MATTHEWS:  And I think that a lot of the people on the right sell that argument all the time, that somehow people are richer because they work harder.  A lot of people work very, very hard.  They just haven‘t had the breaks, sometimes the education, whatever.  Maybe the parents, somebody let them down somewhere along the line.  But you can‘t—life is not a beautiful meritocracy.  It just isn‘t. 

SHUSTER:  Chris, the other thing I want to...

MATTHEWS:  It doesn‘t work that way.

SHUSTER:  I agree with you wholeheartedly. 

The other thing, the other political development that I‘m dying to get your take on, Sarah Palin was asked about this PAC.  She was asked about her PAC if they help her run for president. 

Here‘s how she described it in Alaska today.  Watch. 

MATTHEWS:  Yes.  All right.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  The formation of that PAC, does that signal that you‘re running for president in 2012? 

GOV. SARAH PALIN ®, ALASKA:  No, not at all.  Not at all.  No.  No.

It‘s helpful to have a PAC so that when I‘m invited to things, even like to speak at the Lincoln Day Dinner in Fairbanks, to have a PAC pay for that instead of have the state pay for that, because that could be considered quasi-political. 

(END VIDEO CLIP)

SHUSTER:  No, not at all, on the issue of whether she‘s running in 2012. 

MATTHEWS:  No, that‘s fair.  Look, in fairness to her, if the governor

and she is a very popular figure among the conservative party, the Republican Party. 

If she wants to give a speech in Omaha tomorrow, the Alaska governor shouldn‘t pay for it.  And maybe the people in Omaha don‘t want to pay for it.  But if she wants to tool around the country giving speeches, basically for free, than she has a PAC pay for it.

If she wants people to invite her and pay her expenses, that‘s one thing.  But obviously she will make herself a lot more invitations out there if she pays for the trip.  You see what I mean? 

SHUSTER:  I see.

MATTHEWS:  You know how important this is?  People want free speakers everywhere.  They want people who will show up and pay the costs of getting there.  Pay for a hotel room, pay for a staffer to come along. 

She‘s now saying, if I can raise enough money to pay for a staffer, somebody to help me put the speech material together, get the press release out, get the schedule put together, get the plane ticket, if somebody will pay for that in a PAC, then I can make myself available for free for all these dinners around the country and lunches.  So she‘ll get to get a lot of invitations out.

But she‘s smart.  She is running for president.  You heard it in a lot of places, but you definitely hear it here. 

She has a good shot at winning the Republican nomination next time.  I‘m not saying she‘s going to win it.  But she‘ll be one of the two or three contenders.  You watch.

SHUSTER:  Well, Chris, I look forward to going to some of these dinners with you.  And we appreciate you joining us again.

MATTHEWS:  And she‘s always welcome on this show.  We can give her an hour.  I‘ll tell you, Sarah Palin is a major attraction politically in this country.  And anybody who is not paying attention hasn‘t noticed how many boring politicians there are out there. 

(LAUGHTER)

SHUSTER:  Chris, thanks, as always.

MATTHEWS:  She‘s not boring.

SHUSTER:  Chris Matthews, host of “HARDBALL.”

Chris, thanks, as always.  We appreciate it again.

MATTHEWS:  Thank you.

SHUSTER:  It is down to the wire for President Obama‘s stimulus package, which is facing some tough Republican opposition.  The House is expected to begin voting on this momentarily. 

Earlier today, the president met with CEOs at the White House and emphasized the pro-business aspects of his plan. 

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  Most of the money that we‘re investing as part of this plan will get out the door immediately and go directly to job creation, generating or saving three million to four million new jobs.  And the vast majority of these jobs will be created in the private sector, because as these CEOs well know, business, not government, is the engine of growth in this country. 

(END VIDEO CLIP)

SHUSTER:  Let‘s bring in Congressman Chris Van Hollen, Democrat from Maryland, chairman of the DCCC. 

And Congressman Van Hollen, how close is this vote going to be tonight? 

REP. CHRIS VAN HOLLEN (D), MARYLAND:  Well, I think we‘re going to have a healthy vote in support of this.  We still don‘t know how many Republicans will join us.  We obviously hope to get a decent number.  But based on the comments we‘ve been hearing today, we do not expect a lot. 

But we will win.  We now have a decent majority in the House.  We wish we had more Republican support on this.  The president made every effort to do so. 

We reached out.  We had a lot of amendments today.  But we‘ll find out.  They just called the vote, so we‘ll know in about 15 minutes. 

SHUSTER:  This is the biggest economic stimulus proposal in U.S.  history.  What goes through your mind? Any nervousness just about the scope of this when you think about how big it is?  Even if you agree that it‘s needed, it‘s got to make you nervous. 

VAN HOLLEN:  Well, it‘s true.  But given the size of our problems and the hole we have dug ourselves into economically, the fact that just two days ago, in one day, 75,000 Americans lost their jobs, this is the kind of action we need to take.  And we need to take it urgently. 

We need to be smart about it.  I think we have worked through the committee process here.  I think we have a bill that, as the president has said, will help prevent the loss of three million to four million jobs, and hopefully obviously help gain jobs in that process. 

We have dug ourselves in a very big hole.  I think the American people understand we‘re not going to turn this around overnight, but this is the first step. 

SHUSTER:  And Congressman, we‘re going to let you go and let you go vote. 

As you see on passage right now, not a single Republican has crossed over to vote nay.  Not a single Democrat has voted nay.

Any quick thoughts, Congressman, on that?

VAN HOLLEN:  Well, again, the president has been down here on Capitol Hill on numerous occasions.  There are a number of provisions in this bill, as he said to the clip to the executives, the different companies today, in terms of business tax relief, in terms of investments in the area of infrastructure—roads, bridges, construction industry. 

New technologies, green technologies, health, IT, these are the investments we need to be making in this country both to get the economy moving again, to get people back to work.  But also to make the investments that we need for our future. 

And so I‘m disappointed we don‘t have more Republican support.  We hope to pick up more Republican support in the Senate.  But at the end of the day, we‘ve got to get the job done here, and that‘s why we‘re moving today. 

SHUSTER:  Congressman Chris Van Hollen of Maryland. 

Congressman, thanks for joining us.  We appreciate it.

VAN HOLLEN:  Thank you.

SHUSTER:  Assuming the bill passes—and it looks like it will—assuming it passes the House, of course, it will move on to the U.S.  Senate. 

And for more on the debate in that chamber that‘s coming, let‘s bring in Senator Kent Conrad, Democrat from North Dakota and chairman of the Budget Committee. 

Senator, first of all, what are the prospects for severe dramatic changes when this does go to the Senate? 

SEN. KENT CONRAD (D), NORTH DAKOTA:  I think you will see changes.  We have already seen changes in the action of the Finance Committee last night in its markup.  I think you‘ll see further changes. 

I think you‘ll see more resources added for infrastructure, because that‘s the real investment in this package.  Those are dollars that will not only create jobs, but those are dollars that will improve our competitive position as a nation going forward.  Doing things like improve the electrical grid of America, building roads, bridges, other direct investments that will pay a dividend for years to come. 

SHUSTER:  We mentioned you last night when we were talking to Peter Orszag, who‘s the president‘s budget chief, because you‘ve been saying that you don‘t believe that the numbers are right, that this is really going to create three million or four million jobs.  We asked Peter Orszag about that last night.  Here‘s his response, and I‘ll get your reaction. 

Watch. 

(BEGIN VIDEO CLIP)

SHUSTER:  First, is Kent Conrad, the budget committee chair, is he wrong in his analysis of the job creation here? 

PETER ORSZAG, BUDGET DIRECTOR:  Well, my understanding is the House Budget Committee held a hearing today in which the majority of the witnesses embraced figures of three million to four million jobs created from this package.  Even the CBO, the Congressional Budget Office, suggested that the jobs number could be as high as 3.6 million. 

Obviously, there are people who think the package should be bigger, that should be smaller.  That‘s part of the legislative process. 

(END VIDEO CLIP)

SHUSTER:  Senator, it sounds like he still believes that you‘re wrong on that.  What‘s your reaction? 

CONRAD:  Look, in normal times, I would completely accept what the models show.  Dr. Orszag, who I have high regard for—after all, I picked him to be the head of the Congressional Budget Office before he was in this position—but understand those models assume a relatively healthy financial system.  We don‘t have a healthy financial system.  So that‘s the 800-pound gorilla here. 

And the concern I have about the economic recovery plan is there are insufficient resources to deal with both the housing downturn and the need to shore up the financial sector.  And unless we do those two things effectively, we really can‘t expect the kind of strong recovery we all hope for. 

SHUSTER:  You‘ve also argued, as far as getting rid of the payroll tax provision, suggesting that doesn‘t really stimulate the economy because it encourages people simply to hold on to that money. 

What has been the White House response to your concerns about that? 

CONRAD:  You know, they‘re fully committed to the position that President Obama took during the campaign.  And I understand that.

On an equity basis, certainly you‘d like to have that tax relief flow.  The problem is, in the context of an economic recovery package, one that is designed to give lift to the economy in the short term, we saw what happened with the previous rebate program.  Only about 30 percent of the money was spent within the first six months. 

That‘s because when people are afraid of losing their jobs, they tend to pull back.  They use money, additional money, to pay down debt, or they save it.  And while those are laudable things for an individual to do, they don‘t bring additional demand to the economy, they don‘t strengthen the economy in the short term. 

SHUSTER:  Senator Kent Conrad.

Senator, thanks so much for joining us. 

CONRAD:  You bet.

SHUSTER:  Again, for everybody who‘s watching this at home, Senator Conrad is a crucial figure as this moves to the U.S. Senate.  And again, it appears that the votes are there in the House. 

This will head to the Senate, and it will be up to Senator Conrad and some of his colleagues to essentially adjust it and try to bring on some Republican support, if they can get it.  But, of course, they may not need those votes.  But again, a moving piece of legislation tonight on Capitol Hill. 

Coming up, talk about pressure.  President Obama has invited lawmakers and their spouses to the White House for cocktails and refreshments this evening as part of his lobbying effort for the stimulus plan. 

Also this hour, “Hypocrisy Watch.”  Bank of America is back under the spotlight for helping business leaders organize against unions. 

And later, our continuing series on Ground Zero.  Seven years after the 9/11 terrorist attacks, the site still reflects the gaping hole the terrorists wanted.  We told you about the troubled Freedom Tower rebuilding plan, and we brought you the proposal to scrap those blueprints and rebuild the twin towers. 

Tonight, the parents of the youngest firefighter killed on 9/11 -- what do they want?  We will talk with them live ahead on 1600.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.

This evening, at his 1600 Pennsylvania Avenue, President Obama is hosting a happy hour for lawmakers.  And it will be a happy hour for the president, whose $819 billion stimulus package just passed the House. 

Let‘s bring in our panel: former Democratic congressman of Maine, Tom Andrews; Republican strategist Todd Harris; Democratic strategist Joe Trippi; and John Harwood of CNBC and “The New York Times.”

First, Tom Andrews, does this sort of schmoozing, does it work?  And is it ever weird when you have a vote like the one you had tonight, where not a single Republican voted for the measure and then he‘s going to have refreshments with the president? 

TOM ANDREWS, FMR. CONGRESSMAN:  Well, you know, it is—it‘s not weird in the sense that—listen, when I was in the Congress back in 1993, when we were trying to pass a very tough budget by President Clinton to end massive deficit spending and get the economy turned around, again, not a single Republican voted for that package.  I think the American people, what you‘re most concerned about is not what happens during the libations in the White House, how it‘s received at home. 

And at home, people are hurting.  They want more action from this Congress and this White House, less partisan bickering.  And here you have a president coming to the Congress unprecedented. 

First visit, an hour and a half with House Republicans, an hour and a half with Senate Republicans.  An unprecedented show of bipartisanship.  And here you have a bitter partisan vote on the part of the Republicans. 

So I think the people at home, that‘s who you‘re thinking about, who want more action, less partisan politics, politics as usual.  And I think the Democrats and the president have positioned themselves well to make the argument it‘s the president and the Democrats who are bending over backwards to deliver on that promise. 

SHUSTER:  Todd Harris, let‘s start there, the argument that the Democrats have positioned themselves well and that the Republicans may pay a price, not a single one voting for this measure.

TODD HARRIS, REPUBLICAN STRATEGIST:  I don‘t think there was ever any question that the measure was going to pass.  The Democrats control the White House.  They have big majorities in both chambers of Congress.  And I think there‘s very little disagreement that something big needs to be done. 

The question, and what John Boehner has been saying, the question is, do we grow the size of government through huge spending, through a lot of wasteful pork, or do we return the money back to taxpayers in the form of refunds and reducing tax rates?  Republicans, as always, on the side of reducing the size of government. 

SHUSTER:  Joe Trippi? 

JOE TRIPPI, DEMOCRATIC STRATEGIST:  But, you know, the striking thing, we all thought it was going to pass.  We all knew it was going to pass.  What‘s striking is, not one vote.  I mean, this is after an election in which the American people said, stop the polarizing partisan politics, let‘s do something different. 

I think people would understand if 20, 30 of the House Republicans had voted with the president.  But we‘re talking about a party that decided tonight with not one vote.  They weren‘t going to give one vote to a president who was trying to do something in a crisis where the people want action. 

And you can get into whether the stimulus is too big, too small, whether it‘s targeted at the right places or not.  But not one Republican said, we‘re with you Mr. President.  That‘s an amazing thing. 

SHUSTER:  Here‘s the explanation from Paul Ryan.  He was writing in “The New York Times” today.  He‘s a Republican from Wisconsin. 

He said, “This is 1936 economics.  The Democrats took everything in their filing cabinet that has been piling up for 100 years, threw it in this bill, and called it economic stimulus.”

How accurate or inaccurate is he, John Harwood? 

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  Well, there‘s some merit to that argument.  I was talking to a veteran Democratic economist today and said, “Is this an optimum plan from a stimulus point of view?”  The answer, was, “No, it‘s not.”

If you wanted to make it optimum, you have front-loaded more tax cuts, things that would get out the door immediately.  But it‘s a political compromise that reflects some pent-up spending demands by Democrats and things that may have some stimulative effect, but not as much as the alternatives.  But I do think we ought to focus on what Joe mentioned, which is stunning, that there were no Republicans voting for this after that election, and it tells us three things about our politics. 

One, the reality of polarization, how deep and profound it is.  Two, the Republican leadership was more effective than many people in Washington thought it would be.  And three, there is in fact some righteous indignation by Republicans about what they see as a package that is an all-Democratic package. 

Not that they didn‘t reach out.  And Democrats did position themselves well.  But there were ways this package could be adjusted and will in Senate that are likely to be more appealing to Republicans. 

SHUSTER:  Todd Harris, do you worry as a strategist about Republicans paying a political price for that direct point? 

HARRIS:  No, I don‘t, because as long as there are things like $260 million for new computers at the State Department, $50 million in funding for the National Endowment for the Arts, I mean, it‘s very hard for anyone to say with a straight face that these are stimulative in terms of the economy.  And I do think that it was encouraging to see that when Republicans speak with a unified voice in Washington, we actually can still implement change.  We can affect the legislation. 

I‘m talking about the $200 million for contraceptives.  Republicans made a big stink about it.  Nancy Pelosi got a little embarrassed, I think.  She came out in support of it over the weekend, fighting for it.  President Obama had to step in and say, no, take that out. 

So I think Republicans can wrack up a victory there.  And it just shows that if the party can stay unified, we can implement some change. 

SHUSTER:  Joe Trippi? 

TRIPPI:  I think it‘s obstructionist, though.  I mean, you basically

have an entire party saying, no, we‘re not going to meet you at any part of

the path to meeting this crisis.  And, you know, they didn‘t put any other

I mean, there was just nothing positive about today‘s vote.  And I think the country out there wants to see this thing addressed, bipartisan—with bipartisanship and with President Obama getting—you know, getting some help from both parties, when he‘s been reaching out again with his party tonight.

SHUSTER:  Tom Andrews, you get the last word. 

ANDREWS:  You know, the irony here is, is that the Republicans, these very same House Republican leaders, were the ones that presided over the greatest deficit spending and pork barrel politics in the history of the United States.  John Boehner announced he was opposed to the package before the president even had a chance to make his case at the House today.  I mean, this is pure partisan politics at its worst.

And I think that they are going to have to step back, take a deep breath, and realize that they‘re going to have—if the Democrats, including the president, is going to compromise on things that the Republicans are looking for, the public wants action during this economic crisis.  I think that the Republicans have got to take a deep breath and say, look, maybe we should be working together as a country to deal with this economic crisis. 

SHUSTER:  Tom Andrews, former Democratic congressman, thank you very much.

Thanks also to Joe Trippi, Democratic strategist; Todd Harris, Republican strategist; and CNBC‘s and The New York Times‘ John Harwood. 

Thank you all.  We appreciate it.

As our nation tries to understand our government‘s response to the economic crisis, we should keep in mind that it‘s not a small thing when a company receives billions of dollars in taxpayer help.  That takes us to Bank of America and tonight‘s “Hypocrisy Watch.”

As first reported by The Huffington Post, just days after Bank of America received $25 billion in bailout money last fall, and just weeks before the November election, Bank of America hosted a conference call with leading critics of America‘s labor unions.  On the call, several clients of Bank of America chimed in and spoke of ways to kill the Employee Free Choice Act.  That‘s the name of legislation in front of Congress which, if passed, would make it easier for employees to join unions. 

One of the participants on the Bank of America conference call was Home Depot‘s founder, Bernie Marcus.  He urged colleagues to help anti-union lawmakers facing reelection.

(BEGIN AUDIO CLIP)

BERNIE MARCUS, FOUNDER, HOME DEPOT:  If a retailer has not gotten involved with this, if he has not spent money on this election, if he has not sent money to Norm Coleman and all these other guys, they should be shot.  They should be thrown out of their (EXPLETIVE DELETED) jobs. 

(END AUDIO CLIP)

SHUSTER:  Bernie Marcus is entitled to his opinion on unions. 

Likewise, every American citizen is welcomed to get involved in elections. 

Elections matter.

However, Bank of America and other financial institutions helped create the financial mess our country faces to begin with.  And for Bank of America to take taxpayer bailout money in order to “improve the company‘s health” and then use that money to organize a conference call and get so involved in fighting workers who are trying to improve their own financial health, that‘s hypocrisy, and it‘s wrong. 

And I know Todd Harris disagrees with me.  We‘re going to have him on another day to debate that. 

But before we hit a break, here‘s one story very near and dear to all of you who remember Hurricane Katrina.  The mayor of Gulfport, Mississippi, has now been indicted on fraud charges related to a claim he made in the months after Katrina slammed the Gulf Coast three years ago. 

Brent Warr is accused of filing for disaster assistance on a beachfront house he did not live in.  Mayor Warr has pleaded not guilty and says he will continue to run the city while he fights the charges in federal court. 

The man who‘s been called Bush‘s brain has been subpoenaed to testify in the firing of several U.S. attorneys during the Bush administration.  Ironically, Karl Rove‘s fate may now rest with the Obama White House. 

A top member of Congress is urging a hard-line approach.  We will talk to her and sort out the prospects for Rove‘s testimony next on 1600. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.

For the past two years, the House Judiciary Committee has been trying to get Karl Rove under oath and on the record over his involvement in the seemingly political-driven firings of Justice Department prosecutors.  But Rove has repeatedly invoked President Bush‘s authorization of executive privilege, leading to nothing but an empty chair. 

Here‘s Representative Linda Sanchez in July, when Rove last asserted a privilege and refused to testify. 

(BEGIN VIDEO CLIP)

REP. LINDA SANCHEZ (D), CALIFORNIA:  I hereby rule Mr. Rove‘s claim of immunity are not legally valid, and his refusal to comply with the subpoena and appear at this hearing to answer questions cannot be properly justified. 

(END VIDEO CLIP)

SHUSTER:  This past Monday, House Judiciary Chairman John Conyers tried again, issuing a subpoena calling for Rove to testify before the committee about the firing of nine U.S. attorneys, as well as the Justice Department‘s prosecution of former Alabama governor, Don Siegelman. 

Joining us now is California Representative Linda Sanchez, a member of the House Judiciary Committee and, as you heard, a leading figure in the effort to get Karl Rove to testify. 

Congresswoman, first of all, the election is over.  Rove is gone.  Explain to our viewers why you believe it‘s important to get his testimony now. 

SANCHEZ:  Sure.  Well, we had eight years of stonewalling by an administration that wouldn‘t give us basic information.  And as a coequal branch of government, when Congress asserts its oversight responsibilities, the White House has an obligation to comply with that.  I think that the message we got from the Bush administration and Karl Rove and others was that somehow they‘re above the law and don‘t need to play by the rules.  I think it‘s very important that we continue to look into this matter until we‘re satisfied that we get the questions answered that we need answered. 

SHUSTER:  We heard from Karl Rove‘s attorney, Robert Luskin, today, who noted that Rove, himself, was not asserting a privilege, rather he was following a privilege of President Bush.  In a statement, Luskin added, quote, “we have sought the advice of Mr. Craig, counsel to President Obama, on whether or not President Obama‘s position on this matter differs from that of former President Bush.  I could not speculate on how any potential differences might be resolved, other than to say it is not and will not be Mr. Rove‘s responsibility to address any differences.”

Congresswoman, assume that the Obama White House is watching.  What do you want them to do?  What do you want Mr. Craig to do? 

SANCHEZ:  Well, there‘s some question as to whether once an executive leaves office and asserts a privilege whether that privilege is, indeed, valid.  And I just want to note for the record that even though Mr. Rove was not the holder of the privilege, because he was subpoenaed by Congress, even if he wished to assert a privilege that President Bush asked him to, he had an obligation to appear before the committee and assert that privilege on a question by question basis. 

SHUSTER:  If he continues to resist, would you try to throw him in jail for contempt? 

SANCHEZ:  Contempt is definitely one of the options that is on the table.  We are hopeful that the Obama administration will agree with us that they—the position that they hold of this absolute immunity that goes on forever is untenable.  We think that, you know, it‘s been litigated in the court.  At the district court level, Judge Bates has found that there was no proper assertion of immunity, and that Karl Rove had to present himself. 

So we‘re hopeful that that case—Rove and Luskin have appealed.  That‘s set to be heard on February 18th.  We‘ll see how the appeal on that goes. 

SHUSTER:  Congresswoman, thank you for joining us and good luck.  And by the way, I understand this is your birthday.  On behalf of all of, happy birthday.  You don‘t look a day over 30.  Thank you very much. 

SANCHEZ:  Thank you.  My pleasure.

SHUSTER:  Up next, the controversy over what should be done at Ground Zero.  It‘s been more than seven years and the Freedom Tower rebuilding plans are still just plans.  The delays and problems seem like an insult, particularly to the 9/11 families.  What‘s their view on what should be done on the hallowed ground in lower Manhattan?  We‘ll talk to Al and Marine Santora, who lost their firefighter son, Christopher. 

Later, President Obama met today with military leaders to review how best to remove all U.S. combat troops from Iraq.  Meanwhile, a rift is growing between the president and the Pentagon over the upkeep of U.S.  nuclear weapons.  You‘re watching 1600.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600 PENNSYLVANIA AVENUE.  All week long, we‘ve been focusing at this time in our show on Ground Zero in New York.  Seven years after the 9/11 attacks and there is a gaping hole physically and emotionally, given the on going delays and problems in trying to rebuild at the site.  The Freedom Tower plan—and here‘s the Port Authority sketch—hasn‘t really gotten off the ground, thanks to bureaucratic infighting, design flaws, engineering oversights and what critics call misguided leadership. 

Last night, we brought you an alternative plan that is gaining momentum to rebuild the Twin Towers on the site, taller, stronger, and safer.  Tonight, we want to bring you the perspective of true heroes, the families who made the greatest sacrifice, and have turned their own tragedy into an on going mission to never forget.  Maureen and Al Santora lost their 23-year-old son Christopher in the towers on September 11th.  Christopher was a fire fighter with Engine Company 24.  Thank you both for joining us. 

First, tell us about your son, Christopher. 

MAUREEN SANTORA, MOTHER OF 9/11 VICTIM:  My son was a history buff. 

And he would be very, very proud that this new plan was being considered. 

He would want the Twin Towers to be, you know, rebuilt. 

And he was—loved sports.  He loved all types of sports, basketball in particular.  But he was a kid that was very proud to be a firefighter.  It was his dream job.  It was his dream job.  And we are very fortunate that our 23-year-old son had found his dream job.  And unfortunately, he did not live long enough to see the job and to be part of the fire, you know, fighting establishment, as he really wanted to be. 

SHUSTER:  Al, I know that you‘re both familiar with the problems at Ground Zero.  What do you make with the problems with the Freedom Tower?  What makes you think that Christopher would have wanted the Twin Towers to be rebuilt? 

AL SANTORA, FATHER OF 9/11 VICTIM:  I think that his feelings would have been that—to build it the way it was.  If not the way it was, better, bigger.  That this would have been his idea, I‘m sure.  And the whole thing with the Freedom Tower and the whole perspective of what has happened with the worldwide competition, with everything that‘s gone wrong, this has been a colossal screw up, if you want to use that terminology.  It seems like it‘s going nowhere. 

Here we are seven years later.  You go around the world.  There‘s memorials and monuments and things to 9/11.  And here, we still have a hole in the ground. 

SHUSTER:  Al, you first.  So many first responders like your son died when they climbed into the towers.  What about the argument from people saying, you know what, the towers, regardless of their status for America, they will always be a target for terrorists.  And they‘re just, therefore, dangerous.  It doesn‘t matter if they‘re safer, taller, stronger, they‘re always going to be dangerous.  If you rebuild them, they‘re always going to be dangerous for people who might have to try rescues, like firefighters.  How do you respond to that argument? 

A. SANTORA:  I think when you look at any kind of situation, that‘s always going to be in the back of peoples‘ minds that, yes, it would be a target.  But are we to just, you know, shrivel up and go away and let the terrorists win?  The idea of the whole—the idea of terrorism is so that people just do that, just go away and go into their shell. 

I think if we put our best foot forward and show them that they haven‘t—and I think the American population has shown that we‘ve come together stronger than we were before 9/11.  I think that‘s an important part.  And I think having a building or buildings that represent what freedom is all about, I think, is the way to go, and show them that there‘s nothing they‘re going to do to bring us down. 

SHUSTER:  Maureen, how important was standing tall and being proud of New York and its icons?  How important was that to your family and specifically Christopher, your son, as a firefighter? 

M. SANTORA:  Well, Christopher was very proud to be an American.  It was something that he vocalized and he never allowed any friend or anybody he came in contact to bash America.  He was very, very proud.  And he was very, very patriotic at a time when it wasn‘t necessarily popular. 

He loved his country.  He loved American history.  He knew more about American history than most.  He would want to make sure that the terrorists knew that we were not going to take a back step, and we were not going to alter our vision.  And he would want these towers to be built exactly the way they were. 

This new plan is exactly what our son would have wanted.  He would have wanted two towers being put up.  He would want the memories of the almost 3,000 individuals to be memorialized.  And he would want to make sure everybody in the world knew that we would not—have not succumbed to the terrorists, that we were standing up tall, that we were very proud to be who we were.  We were proud of our country.  This is what he would really want.  This is what he would really want. 

SHUSTER:  Maureen and Al, thank you so much for coming on and expressive expressing your views on behalf of all us.  Because of your words, we are going to stay on this story and talk to people at the site and find out how your views can be taken into consideration.  We‘ll have more on that tomorrow night.  Thank you so much.  We appreciate you coming on. 

A. SANTORA:  We thank you also.  Thank you. 

SHUSTER:  OK.  Today at the Pentagon, President Obama sat down with Secretary of Defense Robert Gates and the Joint Chiefs of Staff for a strategy session on America‘s war policy. 

(BEGIN VIDEO CLIP)

OBAMA:  We have for a long time put enormous pressure on our military to carry out a whole set of missions, sometimes not with the sort of strategic support and the use of all aspects of American power to make sure that they‘re not carrying the full load. 

(END VIDEO CLIP)

SHUSTER:  President Obama and Secretary Gates have both suggested the Pentagon will redeploy troops from Iraq to Afghanistan in the coming months.  Joining us now with some new information on deployments under consideration is NBC News Pentagon correspondent Jim Miklaszewski.  Jim, what do you have?

JIM MIKLASZEWSKI, NBC NEWS PENTAGON CORRESPONDENT:  Well, David, while the presidents and the Joint Chiefs of Staff did not discuss specific troop levels in either Iraq or Afghanistan in today‘s session, as Defense officials have told us, that is going to be one of the front and center issues for the president, on how quickly can troops be withdrawn from Iraq, and how quickly can they then be redeployed to Afghanistan. 

There are plans in the works.  It was originally thought that Secretary Gates might sign an order as early as tomorrow ordering an additional 22,000 U.S. forces, including 14,000 Marines, to Afghanistan starting this Spring.  By the end of this year, they hope to have 30,000 additional U.S. forces on the ground in Iraq to battle a resurgent Taliban.  Those plans are already in the works and moving quickly, David. 

SHUSTER:  Jim, I want to ask you about the growing divide on another issue between the White House and the Pentagon of modernizing the nuclear force.  What is that about and how big a rift is there? 

MIKLASZEWSKI:  You know, this is a very interesting strategic, political, philosophical discussion.  Many Democrats on Capitol Hill and in the Obama administration do not want to modernize the nuclear forces.  They don‘t want to get into the production of new nuclear weapons.  However, Defense officials, including Defense Secretary Robert Gates, will tell you that if you do not modernize these weapons, that poses a potential risk should, god forbid, they ever have to be used.  That by modernizing the force, creating more smaller nuclear weapons, that are potentially more powerful in the end, you actually can reduce the dependency and the size of the nuclear force. 

This is yet to be resolved.  And some Defense officials acknowledge that it may not even be resolved in the next four years or potentially eight years of an Obama administration. 

SHUSTER:  Such an interesting debate.  Jim Miklaszewski, thank you so much.  Jim is going to keep us posted on all those stories coming out of the Pentagon in the weeks ahead.  Thanks Jim.

Still ahead, how the tween heart throbs the Jonas Brothers were at the center of a bet at 1600 PENNSYLVANIA AVENUE, not in the West Wing, but in the residence. 

Plus, President Obama‘s interpretation of Beyonce‘s hit song “Single Ladies.”  That‘s next in our briefing room. 

We‘ll be back with more 1600 from snowy Washington, D.C. after this. 

(BEGIN VIDEO CLIP)

OBAMA:  My children‘s school was canceled today.  Because of what? 

Some ice? 

As my children pointed out, in Chicago, school is never canceled.  In fact, my seven-year-old pointed out that you‘d go outside for recess.  You wouldn‘t even stay indoors.  So it‘s—I don‘t know.  We‘re going to have to try to apply some flinty Chicago toughness to this. 

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SHUSTER:  We‘re back with a look inside the Briefing Room.  We learned today that President Obama loves Beyonce and has memorized the lyrics to her hit song “Single Lady.”  According to Vibe.com, while the Obamas were talking to celebrities after the inauguration week concert at the Lincoln Memorial, Michelle Obama told Beyonce her husband even knows the hand gestures that go with “Single Ladies.”

Musician Jay-Z shot this home video, which has now been posted on Vibe.com. 

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY:  Mr President, you didn‘t tell Beyonce about “Single Ladies,” your rendition.

OBAMA:  But I‘m not like Justin.  I didn‘t put on the outfit.  But I didn‘t want my girls thinking that I couldn‘t—that I got a little something.  This part I got. 

(END VIDEO CLIP)

SHUSTER:  So what was President Obama talking about when he said that he‘s no Justin?  He was referring to Justin Timberlake‘s appearance on “Saturday Night Live,” when he dressed up as one of Beyonce‘s backup singers in the “Single Ladies” music video.  That‘s Justin on the left. 

The first daughters might like Beyonce, but they love the Jonas Brothers.  The “Huffington Post” today posted some behind the scenes video from the Democratic National Convention last August.  Here‘s President Obama talking about his daughter Malia and her crush on Nick Jonas. 

(BEGIN VIDEO CLIP)

OBAMA:  I‘ve got a bet with Malia.  She‘s been talking about how when she sees her Jonas Brother favorite—what‘s his name? 

M. OBAMA:  Nick. 

OBAMA:  Nick.  She‘s going to be all sophisticated.  I said, Malia, I will bet you five dollars that you will stammer and not have anything to say.  She said, no, no.  Well, I‘m sure I‘ll say I‘m a really big fan.  You know Malia, acting all sophisticated.  I‘ll be—I really enjoy his music.  I said, you won‘t say that.  You‘ll be like, ah—

(END VIDEO CLIP)

SHUSTER:  It‘s not clear who won the bet.  We do know that Malia and Sasha met the Jonas Brothers when they went on the “Ellen DeGeneres Show” before the election and the girls saw the Jonas Brothers at the White House just hours after the inauguration. 

Next, do you know what Twitter is?  Several Republicans in Congress do, and they were apparently using it yesterday to post real time updates of their meeting with President Obama.  According to the Hill.com, Congressman Bob Inglis from South Carolina wrote, “there‘s real desire in this room to figure a way back to prosperity.” 

Congressman Pete Hoekstra from Michigan Twittered, “if the president carries this on, it does open doors for a new tone.” 

From Congressman Michael Burgess of Texas, “sharp differences are muted.” 

And Congressman Jeff Flake of Arizona wrote, “good sales man, bad product.” 

By the way, the Republican issues with the stimulus plan didn‘t keep lawmakers from seeking a Kodak moment with the president.  A “Time” reporter says nearly as many House Republicans sought to get their photos taken with President Obama as questioned him about the stimulus bill. 

Coming up, you know those secret CIA prisons in foreign countries that the Obama administration promised to shut down?  Well, it appears there is a loophole.  Up next, our Muckraker of the day has some exclusive reporting on black site exceptions, when 1600 continues. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.  President Obama devoted his first week in office to making aggressive changes on how the U.S. fights terrorism.  Among them, no more black sites, secret prisons overseas set and run by the CIA.  But the truth may lie in the fine print.  We told you last week about exceptions to the Gitmo and torture orders that would allow them to continue to operate pretty much the same way as they did under President Bush. 

Today, the “Washington Times” reports there‘s a similar exception regarding the black sites.  “Temporary facilities around the world will remain open, giving the administration the opportunity to seize and hold assumed terrorists, evidence that the new administration, while announcing an end to many elements of the Bush war on terror, is leaving itself wiggle room to continue some of its predecessor‘s practices regarding terrorist suspects.” 

Eli Lake broke this exclusive story for the “Washington Times” and he is our Muckraker of the day.  Eli, congratulations, first of all.  Does your reporting indicate that they will actually try to take advantage of the fine print and continue to use these black sites? 

ELI LAKE, “THE WASHINGTON TIMES”:  Thank you.  It was a very deliberate exemption that was put in there.  If you read the actual executive order, it says that permanent facilities are out, but temporary facilities are in.  I basically just went and asked intelligence sources, retired, some people inside the administration, what temporary facilities are.  What I found out is these are safe houses sometimes.  Sometimes they could be a ship or boat or a warehouse or a factory.  Often, the host country‘s intelligence service knows about it.  And it would be a place where, for a matter of days, if a high-level terrorist suspect or detainee could be taken and determined what to do with from there. 

SHUSTER:  The CIA incoming director Leon Panetta, he still faces some questions about his views on this.  Do you get the sense that this is something that he wanted to essentially remain in place, or that other people at the CIA wanted to have this as an option, if need be? 

LAKE:  Well, the temporary facilities indicate that the Obama administration would leave open the prospect of rendition, or taking terror suspects—either bringing them back to America or to foreign countries, where they would face some sort of a trial.  This is something that was escalated under the Clinton administration, when Leon Panetta was chief of staff.  He will certainly be asked about that.  When he was chief of staff to President Clinton, I have written about that as well. 

SHUSTER:  This is a politically huge story, because there are a lot of people on the left who think this is all going to be shut down.  What do you make of that? 

LAKE:  Well, the ACLU for this story did tell me that they did not want the CIA in the temporary jailer business.  They‘re happy that Obama got them out of the permanent prison business.  They also want them out of the temporary prison business.  That‘s how they describe it. 

I think that Obama administration officials would say that as long as they were taking suspects to countries where these suspects were wanted by a court of law and they received assurances that they were being treated according to international standards, then this is very different from what the Bush administration was doing. 

SHUSTER:  Real quickly, any idea of the number of terror suspects that may be involved in these sorts of practices? 

LAKE:  At this point, it is too soon to say.  But under the Clinton administration, we know of about 60 or 70 that were renditioned to third countries, some of whom had very bad human rights records. 

SHUSTER:  Eli Lake from the “Washington Times,” our Muckraker of the day.  Eli, congratulations and thanks for coming on. 

LAKE:  Thank you so much.

SHUSTER:  Good to see you.  That is the view from 1600 PENNSYLVANIA AVENUE tonight.  I‘m David Shuster.  Thank you for watching.  We will see you back here tomorrow night, same time 6:00 p.m. Eastern on MSNBC.  Remember, you can get the latest political news and a sneak peek of what‘s coming up on the show sent straight to your inbox with the 1600 Daily Briefing.  Plus, we‘ve got some great content, stories that are not available anywhere else.  Just log on to Shuster.MSNBC.com. 

I‘m David Shuster.  “HARDBALL” with Chris Matthews, a live opening to his show, starts right now.

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