updated 2/6/2009 4:19:58 PM ET 2009-02-06T21:19:58

Guest: Jeanne Cummings, Sen. Lindsey Graham, Ed Gordon, Peter Beinart, Lawrence O‘Donnell

CHRIS MATTHEWS, HOST:  The 11th hour comes tonight for President Obama‘s big bill.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight, what can I say?  Tonight‘s the night.  The U.S. Senate is set to bring it to a vote.  The whole shebang, the entire economic recovery plan, the stimulus bill, the jobs bill, whatever you call it, is coming up for an up-or-down showdown tonight.

It takes 60 senators to make it happen, 60 out of 100 to give President Obama his biggest win since November.  It means that with 28 --

58 Democrats, it‘ll take at least a few Republicans to make it 60 votes.  It‘ll take a lot more to give that—the bill that bipartisan label President Obama could celebrate.

Let‘s talk to the top Democratic vote chaser tonight, Senator Dick Durbin of Illinois.  Also on tonight, Senator Lindsey Graham of South Carolina, the Republican who fought so hard last year for John McCain.  We‘re also going to talk to Republican senator Olympia Snow of Maine, who could make this a big bipartisan achievement for the country.

Here‘s President Obama taking a hard shot at the policies he inherited.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  So let me be clear. 

Those ideas have been tested and they have failed.

(END VIDEO CLIP)

MATTHEWS:  Tonight we‘ve the question, Will President Obama win the big bipartisan victory he wants or simply the narrow victory he needs?  Perhaps more important, will he, the president, prove that he can sell an economic program to the country with the same smart success that he sold himself last year?  On Monday night, he takes the big chance, by the way, of a primetime nationally televised press conference.  That‘s coming up Monday night.

Also, in the “Politics Fix” tonight, the Republican game plan.  Will they be obstructionists or just the opposition?  And finally, Andrew Card, the top aide to President Bush, waxed President Obama—catch this—for not wearing a suit coat in the Oval Office.  You‘re doing a hell of a job, Andy.  That item, as you guessed it, in tonight‘s “Sideshow.”

We begin with MSNBC political analyst Lawrence O‘Donnell and “The Politico‘s” Jeanne Cummings.  Jeanne, you had a great column today in “The Politico.”  I want to start with you, Jeanne.  It seems to me that you don‘t think—and you certainly agree with me on this, that Obama‘s had a hard time using the skills of communication he had for the last couple of years winning the presidency in explaining what the hell this economic stimulus bill, this jobs bill, this economic recovery bill actually is.

JEANNE CUMMINGS, POLITICO.COM:  Well, it has been remarkable to see this organization that just blew everybody‘s doors off in the campaign, and once it got inside of the White House, they‘ve really struggled to kind of find their voice and get a rhythm going.  Some of that was because of just the dysfunction of the transition, but some of it was self-inflicted.  You know, the nominee problems were so distracting, took him way off message.

And plus, they don‘t seem to have gotten down the rhythm of the White House in terms of how—if you want to hold one event, you want that to be the message of the day, then that‘s what you do.  Instead, they hold multiple events, and they‘ve tended to walk all over their own messages.

MATTHEWS:  Yes.  Well, I have a more low-tech explanation.  He hasn‘t

been able to say what it is, but here he is today doing the best job so far

I want Lawrence to respond to this, and then you, Jeanne—the best job, I think, so far, in saying exactly what this thing‘s going to do.

(BEGIN VIDEO CLIP)

OBAMA:  This plan will save or create over three million jobs.  This plan will put people to work rebuilding our crumbling roads and bridges.  This plan will put people to work modernizing our health care system.  This plan will put people to work renovating more than 10,000 schools.  This plan will provide sensible tax relief for the struggling middle class, unemployment insurance and continuing health care coverage for those who have lost their jobs.  And it will help prevent our states and local communities from laying off firefighters and teachers and police.  And finally, this plan will begin to end the tyranny of oil in our time.

(END VIDEO CLIP)

MATTHEWS:  Well, that‘s what I like, Lawrence.  He‘s finally learned to stack it up and showcase it so at least we got a sense in English what it‘s about.

LAWRENCE O‘DONNELL, MSNBC POLITICAL ANALYST:  Yes, Chris, he‘s doing exactly what the other side is doing, which is cherry picking items from the bill, oversimplifying them in their description and making them sound very appealing.  Now, what the other side does is cherry pick stuff, make it sound ridiculous, and that‘s always the easier thing to do with legislation.  It is always easier to find what you hate in a bill than what it is you want to vote for in a bill.  And so that‘s what he‘s been up against.

They‘ve discovered very quickly that the politics of governing are far more complex...

MATTHEWS:  Yes.

O‘DONNELL:  ... than the politics of campaigning, and it‘s a totally different set of rules and a different set of dynamics that apply.  Speech making is almost—almost—irrelevant in the politics of governing.  What he‘s doing today, sitting down with Republican senators one on one, is actually more important than the speech making, and it looks like he‘s making headway there, too.

MATTHEWS:  Well, like, if your pipes are broken at home and a plumber comes and fixes the pipes, you know what he‘s doing.  If the TV set isn‘t working—this is 100 years ago, when you actually had TV repairmen—they would come and fix the TV.  This time, he has to come in and say, Look, we got a 7.2 percent unemployment rate.  Tomorrow—tomorrow—

Friday morning, we‘re going to hear the January number.  It could be 8 percent.  My bill is going to do what?  It‘s going to create jobs.

Here‘s the president today, Jeanne.  You respond to this.  Here he is, talking about his critics.  Here he is, knocking down the politics and the policies he inherited from President Bush.

(BEGIN VIDEO CLIP)

OBAMA:  Now, I read the other day that critics of this plan ridiculed our notion that we should use part of the money to modernize the entire fleet of federal vehicles to take advantage of state-of-the-art fuel efficiency.  This is what they call pork.

You know the truth.  It will not only save the government significant money over time, it will not only create manufacturing jobs for folks who are making these cars, it will set a standard for private industry to match.  And so when you hear these attacks deriding something of such obvious importance as this, you have to ask yourself, Are these folks serious?  Is it any wonder that we haven‘t had a real energy policy in this country?

(END VIDEO CLIP)

MATTHEWS:  Jeanne, is it marketing?  Is it packaging?  Is it product?  What‘s his problem so far?  Although it looks like he may get a pass tonight with 60 votes by midnight.

CUMMINGS:  Well, I tell you, that speech this morning was a really

good case of pushing back hard.  And we haven‘t seen him do that.  He‘s

been on TV apologizing for different things and he‘s been negotiating and -

but today, he was forceful.  It sounded like more like a closing argument, and he was trying to persuade people.  I thought it was a much more coherent message today.

In addition, Chris, behind the scenes, what they did today, they released this report that shows how many jobs are going to be created across the country.  And they parsed them down to key states and then put Larry Summers on the phone with local media in those states.  And guess what?  You know, those are where the swing votes might be in the Senate.  So they now, I think, have got the workings of a real strategy here to put pressure on these senators to vote for it tonight.

MATTHEWS:  And those states are?

CUMMINGS:  Well, they‘ll be in Maine, they‘ll be Pennsylvania—you know, where they think that they can push—some of the states in the Midwest, where they have been hard-pressed with manufacturing jobs, where the risks of the senators to vote against this are higher than they might be in other parts of the country.  Those states are the ones that they‘re trying to target.

O‘DONNELL:  Chris...

(CROSSTALK)

MATTHEWS:  ... about the selling of this?  Go ahead, Lawrence.

O‘DONNELL:  Well, yes, the targeting starts with Republican senators who are in states that Barack Obama won, who are up in 2010.  That‘s where your targeting starts.  That‘s where you‘re looking at, for example, Arlen Specter, Chris.  I mean, you tell me.  Is Arlen—what‘s the pressure on Arlen Specter in Pennsylvania to vote for when it really comes down to it?  That‘s where they‘re aiming, and that‘s where they should be aiming.

MATTHEWS:  Well, you know, back in my old days working on the Hill, Lawrence, back when you were there, I have to tell you, my favorite achievement ever was to go to the chief engineer of Peoria, Illinois, which was the home base of the Republican leader, Bob Michel, and find out from him—he turned out to be as a Democrat.  I found out from him all the bridges that were under code in Peoria, all the ones where if a school bus over it, there‘d be an accident.  And I got the Speaker to list them on the floor.  He was very happy to do so, at which point, the Republican leader went racing to the back of the floor, looking for his press secretary to clean up the damage.  That is hardball.  That‘s what I loved to do.

Jeanne Cummings, it seems to me that Charlie Crist, the Republican from Florida, who‘s a smart new governor down there, he was on the other night listing exactly how much more Florida sends to Washington than Florida gets back from Washington, and not making an ideological case for the stimulus package, simply saying, This will give us more of the money back.  I mean, this is getting pretty—all politics is local here.

CUMMINGS:  Absolutely.  And that‘s why it‘s smart for the White House to sell this plan both nationally and locally.  And Governor Crist is, I think, a voice that the White House could employ even more because he is a Republican, and yet his state is in dire shape.  His unemployment rate is above 8 percent.  They have managed to avoid layoffs, but they‘re looking at a multi-billion-dollar deficit coming up again, and they aren‘t sure if they can avoid layoffs this next time around.

Those are real jobs, and that‘s what this stimulus is supposed to help prevent from happening, is those teachers, those government workers being laid off.

MATTHEWS:  Well, I‘m looking at the rise in the unemployment rate, Jeanne.  I‘m looking at it, too, Lawrence.  It‘s gone from low 5s or whatever, it‘s up to 7.2 last month.  We‘re going to get a number tomorrow morning.  It‘s always the first Friday.  And if it goes up to somewhere closer to 8, they‘ll be better off having passed this—the Senate version tonight.

Here‘s the president making another pitch for it by calling out members from both parties.

(BEGIN VIDEO CLIP)

OBAMA:  So I‘m calling on all the members of Congress, Democrats and Republicans, House and Senate, to rise to this moment.  No plan‘s perfect.  There have been constructive changes made to this one over the last several weeks.  I would love to see additional improvements today.  But the scale and the scope of this plan is the right one.

(END VIDEO CLIP)

MATTHEWS:  You know, Lawrence, a big criticism of Hillary Clinton‘s health care plan back in ‘94 was that she designed it all at the White House and didn‘t just send up a general strategy to the Hill and let the Hill write it.  In this case, the opposite seems to be the case.  The president said, up on the Hill, All right, Dave Obey of the Appropriations Committee, you put together a bill and we‘ll call it a stimulus package, and it got out of hand.  He had stuff in there for condoms, contraception, Hollywood economic development, all this stuff that‘s hard to sell.  Was that a mistake?

O‘DONNELL:  Yes.

MATTHEWS:  Or was Hillary right?  Who‘s right here, the Hillary approach or Barack approach?

O‘DONNELL:  Neither one of them were right in this instance.  I think what Obama—you know, Hillary was completely wrong in writing the bill in the White House word for word.  That‘s not the way to do it.  But what they should have done in going to the House and going to the appropriators is say, Look, this is our outline.  This is the Larry Summers principles, the Obama principles—temporary, targeted, efficiency for stimulus, and give them some real limitations on what they could actually do.

And most importantly, I think, Chris—most importantly—give only a small window on the tax cuts.  Say at the outset that it‘s 10 percent tax cuts, knowing that you are willing to go up to 30 percent or 35 percent in exchange for Republican votes along the way.  Instead, Obama opened with 30 percent tax cuts.

In other words, the House Republicans were negotiating.  The Republican they were negotiating with was Barack Obama.  He was personally representing Republican interests, being faithful to his campaign pledge to go bipartisan.  The trouble with it is you cannot compromise with hypothetical Republicans.  You have to have real Republicans in the room who will say back to you, If you do that, Mr. President, I will vote.  And they went way too far in that tax cut direction too soon.

MATTHEWS:  OK, thank you very much.  I love that expertise.  Thank you, Lawrence O‘Donnell.  Thank you, Jeanne Cummings.  Great column today in “Politico.”

Let‘s listen to some of what Republican senator Lindsey Graham said today on the Senate floor.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  I feel shut out!  Maybe it‘s just me.  Maybe I‘m the problem, but I don‘t think so.  I think people are figuring out pretty quickly this Congress, the old one and the new one, is making this up as we go.  And we‘re running out of good will.  We‘re running out of capital.  And we don‘t need any more news conferences.  What we need is getting more than 16 people in a room.  We need to slow down, take a timeout and get it right.

(END VIDEO CLIP)

MATTHEWS:  Senator Graham, can you give us a full-fledged critique now?  You pointed out you don‘t like this sort of king (ph) caucus or whatever you want to call it...

GRAHAM:  Right.

MATTHEWS:  ... these 14 or 12 members getting together in the middle somewhere.  Do you think this should all have gone through committee the regular way?

GRAHAM:  Well, it went through committee in an hour and 40 minutes.  I don‘t believe you should spend $880 billion with a committee mark-up that lasts an hour and 40 minutes, never have a hearing.  I don‘t think you should take a vote in the House on something this important where you can‘t get one Republican vote and you lose 11 Democrats and the Speaker of the House says as her excuse, We won, we write the bill.

I would like a different way of doing business.  This is the old way of doing business, and the public sees through it.  I‘m very disappointed.  We can do better.

MATTHEWS:  If you had a chance to speak for the Republican Party, could you have compromised and developed a plan to stimulate the economy with President Obama?

GRAHAM:  I think so.  I think we can have tax cuts and we can have spending.  I‘m not going to get every Republican.  I think you know me pretty well, Chris.  There‘s a middle ground here.  There‘s some Republicans that want to only cut taxes and spend no money.  I‘m not in that camp.  There‘s some Democrats want to spend more than $850 billion.  I think there‘s a middle ground here.

But the process is broken here.  This process is terrible.  We‘re making a major decision, and once we spend this money and the public doesn‘t like what we‘re doing, how do we go back to them and get money for housing and banking yet to be addressed?  We‘ve done very little, almost nothing in this bill for the housing problems.  And it doesn‘t create jobs the way it should.  It spends a lot more money on things that are unrelated to creating a job.  It‘s a mess, and people are disappointed.  And I think we‘re making a mistake.  The new administration‘s making a mistake.

MATTHEWS:  Why do you think the Democrats were so deficient, as you see it, in not putting a housing piece in this, when everybody knows that this whole fiscal or financial crisis...

GRAHAM:  Right.

MATTHEWS:  ... is a result of people buying houses they can‘t afford?

GRAHAM:  I think...

MATTHEWS:  Not being able to pay the mortgage.

GRAHAM:  When you see the way the bill was structured in the House, there‘s a lot of spending unrelated to creating a job.  A lot of pet projects have gotten this bill.  $75 billion goes to the states to be spent any way they would like.  That doesn‘t create a job.

Why we don‘t take a timeout and try to get a housing piece in this bill, I‘ll never know, because if you don‘t address housing, you‘ve just thrown good money after bad.  And that‘s the point I‘m trying to make.  The stimulus package is just one leg of a three-legged stool.  And we‘re blowing it.  We‘re blowing it with the public.

MATTHEWS:  Well, it seems like there‘s three legs to this stool. 

There‘s tax cuts you both sides agree on.

GRAHAM:  Right.

MATTHEWS:  There‘s something to do with real job construction...

GRAHAM:  Absolutely.  Absolutely.

MATTHEWS:  ... building bridges...

GRAHAM:  Absolutely.

MATTHEWS:  ... fixing roads, real jobs with the smell of construction.

GRAHAM:  Right.  Helping people.

MATTHEWS:  And then there‘s the housing piece.  And then there‘s the housing piece.

GRAHAM:  Well, there‘s the banking piece.  Remember the TARP bill?  We didn‘t buy one toxic asset.  That was a bust, so we got to now clean up the banking mess.

MATTHEWS:  Yes.

GRAHAM:  That‘s the third part.  But I believe in extending unemployment benefits and food stamps.  I know people—I come from a state where the unemployment is 9.5 percent.  We‘re losing a lot of jobs.  The president is rightfully concerned about urgency.

But here‘s my message to the president.  If we get this wrong, if we jam through an $850 billion, $880 billion bill that doesn‘t stimulate the economy, we‘re going to lose the ability to go back to the public and do housing and banking because the public is bail-out weary.

MATTHEWS:  Do you think—can you stay with us for a second?  Because I want you to tell us whether you think it‘s a mistake, Senator—Senator Graham, if we have a vote tonight in the Senate.  Is this pushing it too fast?

We‘ll be back with Senator Lindsey Graham.  He‘s staying with us.

Up next, much more of this debate over the president‘s stimulus plan.  Will President Obama get what he wants?  Should he get it tonight?  That‘s the issue.  We‘ll be right back.

(BEGIN VIDEO CLIP)

OBAMA:  The American people have rendered their judgment, and now‘s the time to move forward, not back.  Now‘s the time for action.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

We are back with Senator Lindsey Graham, Republican of South Carolina. 

Senator, thank you so much for watching—I mean for staying here. 

SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  Thank you. 

MATTHEWS:  I‘m sorry.  You always watch. 

(LAUGHTER)

MATTHEWS:  Here is—I hope. 

GRAHAM:  I do. 

MATTHEWS:  Here‘s the—here‘s the president of the United—here‘s the president of the United States taking a shot at your party‘s record.  I want you to respond to what the president said. 

GRAHAM:  OK. 

(BEGIN VIDEO CLIP)

OBAMA:  So, let me be clear. 

Those ideas have been tested, and they have failed.  They have taken us from surpluses to an annual deficit of over a trillion dollars.  And they have brought our economy to a halt. 

And that‘s precisely what the election we just had was all about.  The American people have rendered their judgment.  And now‘s the time to move forward, not back.  Now‘s the time for action. 

(END VIDEO CLIP)

MATTHEWS:  Senator Graham? 

GRAHAM:  Oh, let me be clear. 

I‘m not talking about a bill with just tax cuts.  I‘m talking about meeting with the president in the middle, where we spend money to jump-start economy, that we help people who have lost their jobs, that we have tax cuts that make sense to create jobs, that we sit down, as Republicans and Democrats, and create jobs. 

I‘m not talking about an ideological “have it my way or no way.”

I‘m not going to be intimidated by this president.  I think what I‘m suggesting is that we work smart and we work together.  We are about to spend a trillion dollars some time tonight maybe, and we have been on the bill for four days in the Senate.  It‘s been the—if this is change that we can believe in, count me out. 

This is the worst of politics, not the best of politic.

MATTHEWS:  There‘s—there‘s a move afoot some time in the next hour or so to have an amendment on the floor sponsored by, I think, some Republicans...

GRAHAM:  Yes. 

MATTHEWS:  ... among them, Susan Collins, of a $100 billion cut from package.

GRAHAM:  Yes.  Yes.  Right. 

MATTHEWS:  Would that make it acceptable, or is still not the way you want it done? 

GRAHAM:  Just slow down and see what you just said. 

There‘s an amendment coming, maybe in an hour, to cut $100 billion that I haven‘t seen.  And we would have final passage a few hours thereafter.  Does that make sense? 

The public wants us to be smart and work well together.  There are people meeting in the Capitol today trying to fix this bill, because the public hates it so much.  I don‘t think it‘s smart to have final passage tonight. 

I don‘t think it‘s smart just to have one amendment from five people.  I think it would be smart to get a bunch of people in the room and try to figure out some middle ground.  And if the—if I‘m unreasonable, it will show. 

I don‘t think I‘m being unreasonable, Chris.  I have been in this business quite a while.  I have been on your show a lot.  I have taken political heat from my party.  I‘m willing to meet in the middle.  We need a stimulus package.  We need more than tax cuts.  But this process is broken.  The substance of the bill will not pass public scrutiny. 

And I am disappointed. 

MATTHEWS:  OK. 

Thank you very much for coming back.  It is great of you to stick around for that second segment. 

GRAHAM:  Yes, I have got to be on more. 

(LAUGHTER)

MATTHEWS:  OK. 

Well, you are welcome back, sir. 

GRAHAM:  Thanks. 

MATTHEWS:  Senator Lindsey Graham.

GRAHAM:  Thank you. 

MATTHEWS:  Up next:  A day after Dick Cheney blasted the Obama administration for not doing things his way, former Bush Chief of Staff Andrew Card has some sartorial advice for President Obama.  He doesn‘t like those shirt sleeves over in the Oval Office.  He says the new president needs to respect the place and dress the part. 

We are going to get into the that, where else but in the “Sideshow.” 

We will be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Time for the “Sideshow.”

We just had Lindsey Graham, the senator from South Carolina.  And I do like it when the U.S. Senate gets lively.  Here‘s Senator Graham and Democratic Senator Barbara Boxer, both pals of HARDBALL, duking it out over the stimulus bill today. 

(BEGIN VIDEO CLIP)

GRAHAM:  Look at this bill.  This bill has got to be done by tonight. 

And we are figuring out as we go what‘s in it. 

SEN. BARBARA BOXER (D), CALIFORNIA:  Would the senator yield for a question? 

GRAHAM:  Yes. 

BOXER:  I find it really rather amazing that the senator is holding up a bill, holding up a bill, theatrical. 

Did you ever do that when George Bush was president, and he sent down a bill twice as big as that?  Did he ever do that?  Did he ever—because you can do that.  That‘s the theatrics.  You could do that. 

GRAHAM:  I will put my ability to speak my mind to my party up against anybody, including you.  I don‘t question your motives as to why what—why you‘re doing what you‘re doing. 

BOXER:  Let me go on and ask another question.

GRAHAM:  I‘m here today—no.  It is my time. 

(END VIDEO CLIP)

MATTHEWS:  I don‘t know.  That might have been out of order in the House.  Who knows? 

Anyway, speaking of HARDBALL, I love it when headline writers speak of HARDBALL.  Today‘s “Washington Post” headline of an E.J. Dionne column, “Time to Play Hardball.” 

On the cover of today‘s “Wall Street Journal,” “In Merrill Deal, U.S.

Played Hardball.”

How‘s that for show promotion? 

Next up: dressing down the dressed—I‘m sorry—dressing down the dressed-down. 

Isn‘t former Bush Chief of Staff Andy Card getting a bit dainty?  Check these out.  See these photos of President Obama work?  It‘s something of a departure, certainly, in dress code from President Bush, who required a coat and tie in the Oval Office at all times. 

Well, it seems that precious Andrew doesn‘t like what he sees.  He said—quote—“I do expect him”—that‘s President Obama he‘s talking about—“to send a message that people who are going to be in the Oval Office should treat the office with the respect it has earned over history.” 

The office has earned respect. 

Anyway, well, let‘s think of a couple of smart decisions that were made while the Bush administration was smartly dressed, you know, in full suit and tie.  Let‘s see: starting a war over a baseless argument; bringing a government in surplus into adding more national debt than all the previous presidents put together; oh, yes, letting an economic boom under Clinton become an economic catastrophe. 

If that‘s dressing for success, I would prefer shirt sleeves. 

Anyway, now for the “Big Number.” 

Who would have thought, just a couple weeks into office, President Obama is having trouble connecting with the American people on this stimulus package?  Catch this nasty little number.  According to statistician—statistician Nate Silver of fivethirtyeight.com—he‘s the guy who picked the popular vote spread right last November, by the way, right on the nose—the word “pork” appears in current articles in the newspapers about the stimulus four times more than it did a couple of weeks ago—four times more. 

Talk about losing the message.  Pork is now being used to describe the stimulus four times more than it was a couple weeks ago.  And that‘s bad news for the sales job here—tonight‘s “Big Number.”

Up next:  President Obama gets tough with the critics and finds his voice, as he pushes for the stimulus plan.  It‘s coming up for a vote tonight, it looks like.  Will it help? 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

Stocks rising, led by strength in the financials and the tech sector, the Dow Jones industrial average climbing 106 points, the S&P 500 picking up 13, while the Nasdaq packed on 31 points. 

First-time unemployment claims jumped far more than expected last week

626,000 people filed for first-time jobless claims.  That‘s at the highest level in 26 years. 

Meantime, Wall Street bracing for tomorrow‘s unemployment report for January.  The numbers are expected to be grim—President Obama calling them expected to be dismal. 

Retail sales falling in January, most retailers reporting sharp declines, a notable exception, though, Wal-Mart.  Its sales rose just over 2 percent.  Factory sales fell in December for a record fifth straight month, that decline larger than most economists expected. 

And oil rising 85 cents a barrel today, closing at $41.17. 

That‘s it from CNBC, first in business worldwide—now back to

HARDBALL. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  For the last few years, I have talked about these issues with Americans from one end of this country to another.  And Washington may not be ready to get serious about energy independence, but I am, and so are you, and so are the American people. 

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

President Obama kicked it up a notch today in a speech at the—on the Department of Energy.  Is this the energy he needs to get his economic plan through the Congress? 

We‘re back with MSNBC political analyst Lawrence O‘Donnell and the “Politico”‘s Jeanne Cummings. 

I want you to both from different perspectives. 

Lawrence, you are one of the best, if not the best at this, psyching out what people ought to be doing as political operatives and as political strategists, the real kind, by the way, not the kind that use that title sometimes on television, but the real strategists, who actually have to think through legislative strategy, like you have done. 

It seems to me that the president came in here with the idea that all he had to do was say:  This is it.  This is the one I promised you.  This is the stimulus package.  We have got a lousy economy out there.  I have got to pass this thing.  Don‘t ask me what it is.  We just need it. 

He didn‘t do the job of pre-marketing and developing a product that would sell. 

LAWRENCE O‘DONNELL, MSNBC SENIOR POLITICAL ANALYST:  Yes, I think that‘s right, Chris. 

And you will remember there was a lot of consensus among economists during the transition period about how big this stimulus package needed to be.  What you weren‘t hearing was from Republican senators or Republican congressmen about how big it needed to be.

And, so, there was this sensation out there in the press that we were dealing with basically a consensus environment of a really, really huge stimulus package.  And when numbers like $800 billion started to get thrown around, there were no specific Republican voices standing up in early January saying:  I‘m opposed to that. 

That didn‘t mean they weren‘t waiting to see how this was going to float, and to see how the House was going to handle it, and to see if they were being given something that their Republican voters in their districts back home and in their states would actually want them to vote against. 

And, so, I think Obama and the Obama administration has learned that lesson now.  Just because Republicans are quiet at the outset of a legislative exercise does not mean they aren‘t going to be in staunch opposition. 

There‘s a real lesson here for health care reform.  Republicans will be quiet at first. 

MATTHEWS:  Yes. 

O‘DONNELL:  But who knows what they will do. 

MATTHEWS:  Yes, well, they have got some of their blood thirst here when they learned that they could score when John Boehner, Jeanne, went after the condoms in the—condoms in the—in the House version. 

Now, that may seem like a smart part of the bill, but it was a lot of fun for the Republicans to say contraception shouldn‘t be one of the pieces of this stimulus package.  Then Nancy Pelosi, the speaker, went on one of the Sunday shows and defended it because it reduces the number of kids and therefore somehow saves the government money.  That argument is a little bit off the point here if you‘re trying to build a consensus, it seems.

Is the issue here size or composition?  Lawrence says that they agreed to the size in concept, but, the minute we get to the composition, they started blowing the whistle.

O‘DONNELL:  Yes. 

JEANNE CUMMINGS, LOBBYING AND MONEY CORRESPONDENT, POLITICO.COM: 

That‘s absolutely it.  As they say, devil—devil in the details. 

And I—you know, that—the contraception plank that was put in here was a gift.  That was just a downright gift...

(LAUGHTER)

CUMMINGS:  ... to give to the Republicans, because they had not figured out how to go up against this very popular president, and they had been hearing from economists, saying, we need something big.  You have got to pass something big.  Most economists were saying that, both on the left and the right. 

And, so, it was a—it was a conundrum for them.  How do they position themselves?  And that was a gift.  I mean, they—they—they couldn‘t have asked for anything sweeter than to have, you know, contraceptions in the middle of a job stimulus bill. 

MATTHEWS:  Well, you know, Lawrence, that seems to be the oldest trick

I forgot it, by the way—the oldest trick in beating a popular figure, whether it‘s beating Millicent Fenwick in New Jersey or Bob Taft in Ohio, don‘t go after them personally. 

Don‘t attack Barack Obama, if you‘re a Republican.  Go after contraceptives in the bill.  Go after the Hollywood money.  Go after the details and the policy.  And it makes it sound like, hey, I like Barack Obama, too. 

O‘DONNELL:  Right. 

And Republicans are great at this, Chris.  Let‘s just remember what we‘re watching here.  Republicans, strategically and cohesively, as a congressional party, are at their very best in the minority.  Republicans could really teach Democrats how to be a more effective minority, when they have to suffer that status in there.

MATTHEWS:  Yes. 

O‘DONNELL:  And they are coalescing again in their minority status with a perfect discipline in the House.  We are probably going to see a peel-off—and, by the way, I read what Lindsey Graham said to you, Chris.  He mentioned five possible, maybe five people drifting over to the Democratic side. 

That looks like we‘re talking about maybe this thing passing with 61, 62 votes, not some, you know, closer to 70 number that you can really call bipartisan. 

MATTHEWS:  Well, is that a victory, or what, or a narrow escape?

(CROSSTALK)

O‘DONNELL:  Right now, a win is a win, Chris. 

(CROSSTALK)

(LAUGHTER)

CUMMINGS:  Yes. 

MATTHEWS:  Jeanne, would you—would you score—as a political observer and a scorekeeper, would you say a win of early—low 60s is a victory for Barack? 

CUMMINGS:  Yes, I do.  I think he just has to win this one.  He‘s got to get it through. 

And when—you know, when you were talking about the strategic moves by the Republicans, the other thing that I think is—you know, the gamesmanship is—is interesting, and it‘s fun for us to watch.  But they were getting traction, because the public polls were starting to go down on the stimulus itself.

O‘DONNELL:  Right. 

MATTHEWS:  Yes. 

CUMMINGS:  And that was really, really dangerous to President Obama, because what we‘re saying is, a win is a win.  He‘s got to get this through.

And if the public had gone really south, then some of those moderate Democrats might have been harder to keep. 

MATTHEWS:  Well, you are right.  Right now, the Gallup number has it 52 percent of the country supporting this stimulus package, 38 percent. 

It seems to me, Lawrence and then Jeanne, that they want to have the vote tonight, because it‘s Thursday night.  They do not want to go through a weekend with the media—and the media‘s not on the president‘s side in this regard with the details—they don‘t want to go through a wicked weekend, come back on Monday and Tuesday, right? 

O‘DONNELL:  That is exactly it, Chris. 

When you‘re running legislation through the Senate, especially, nothing scares you more than a recess or a weekend or letting—basically, letting senators go home.  You are afraid of what they are going to hear.  And right now, for example, with Mel Martinez, think about it.  You have the Florida governor who‘s saying I need this bill.  You‘ve got a Republican Florida senator who hasn‘t made up his mind yet. 

Right now, it seems to me that the pressure‘s on Martinez to vote for this bill, to be one of three, four, five Republicans who vote for it.  But what if he goes home over a weekend and starts to hear a lot of dissension about it?  That‘s what they don‘t want to let him do.  They really want to get this done now because of that. 

MATTHEWS:  And you usually hear from your business men pals when you go home, Jeanne, the guy who is able to get you with a letterhead letter or grab you at the office, the big shots that meet you at the country club or wherever, tend to be Republicans, and they say, there‘s nothing in here for housing.  How can you vote for this, Mel?  Doesn‘t make any sense.  Right?  That‘s who gets to you.  It‘s not the union guy who get to you. 

CUMMINGS:  Well, that‘s true.  But, you know, if you look at the business community, they‘re behind this thing.  And if they—if he happens to run into the country club and sits down next to a home builder, that guy is going to say, you have to pass this, because we have to get some money moving through the system. 

MATTHEWS:  All right. 

CUMMINGS:  And so the business community, in this case, is not entirely in sync with their normally—their Republican allies.  There‘s some air there between them. 

MATTHEWS:  I wonder.  Let‘s take a look, here‘s the president, more of him today.  He‘s been all over the place today, trying to push this baby over the top by midnight, it looks like. 

(BEGIN VIDEO CLIP)

OBAMA:  The time for talk is over.  The time for action is now, because we know that if we do not act, a bad situation will become dramatically worse.  Crisis could turn into catastrophe for families and businesses across the country.  And I refuse to let that happen. 

(END VIDEO CLIP)

MATTHEWS:  Lawrence, why does he need a teleprompter to do a good speech? 

O‘DONNELL:  This one—

MATTHEWS:  I‘m dead serious.  He‘s no good on give and take.  He‘s just average.  He‘s no good on stump.  He‘s only good when he‘s got that teleprompter up there giving the grand oratory.  It seems like that‘s what works for him and nothing else does.  I may be wrong. 

O‘DONNELL:  That is definitely when he can be his most forceful, Chris, because he doesn‘t have those built-in pauses.  When he‘s going extemporaneous, he slows down a little bit.  He does a little Ah and pauses.  What he needed to do in this kind of speech is be going straight ahead, full force, full speed and the prompter seems to be the best way for him to do that. 

And, you know, I think it was pretty effective at a closing moment here.  And, you know, Chris, the other thing about holding them here before the weekend is you know how eager—it‘s very hard to describe to civilians how eager senators are to get out of the capital and get home for the weekend, to get back in their states. 

MATTHEWS:  I know. 

O‘DONNELL:  Or going home for the weekend.  And you put that pressure on them at midnight, you know, get this done now and we‘ll let you go.  And it is amazing how that pressure does actually turn votes. 

MATTHEWS:  OK.  Lawrence, I have to pay tribute to you, my Irish-American friend, for your wonderful, courageous support of Caroline Kennedy the last couple of weeks.  No one else was out there.  Her father would be proud of you from on high.  Thank you for that for the people, the Irish people.  Anyway, Jeanne Cummings, the same to you, great writing today.  Thank you for that piece in “Politico” that got us started tonight, which questioned the whole ability of this new administration to win the big fight.  They don‘t have the act together yet. 

Up next, will Republicans be the party of opposition this time, or the party of obstruction?  Will they get in the way or simply bark at the caravan as it passes?  The politics fix is next.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now for the politics fix.  I‘m here with Peter Beinart of “Time Magazine” and Ed Gordon, who hosts “Our World” with Black Enterprise. 

Ed, I want you to start.  You had an interview with Michael Steele, the new RNC chair.  What did he tell you about the strategy?  Is it to obstruct, to oppose, to criticize, to bark at the caravan, let it pass or stop the caravan?  What‘s their goal with regard to Barack Obama? 

ED GORDON, BLACK ENTERPRISE:  I think it is all of the above.  You saw with Lindsey Graham, he said clearly that he was not going to be intimidated by this president.  And essentially Michael Steele said the same thing.  I think what you‘re finding, Chris, is Republicans are trying to find how to combat an immensely popular president, with keeping the game to some degree in the same way we have always known it.  This sense of bipartisanship will be interesting to see what happens after this vote and whether the kind of kumbaya spirit that was pre-inauguration will carry its way through. 

Michael Steele said, hey, I was born in Washington.  I‘ve seen many come to change it.  I haven‘t seen it yet.  And I don‘t think they suspect it will happen with this president either. 

MATTHEWS:  Well, that‘s an uplifting observation from Michael Steele.  But what do you think, Peter?  I mean, I think—I believe politics is phenomenal.  I believe it‘s unpredictable.  I think Barack Obama was unpredictable.  I don‘t believe everything‘s the same and always will be the same.  These times all—let Peter in here. 

I think extremely bad times call for extremely surprising choices.  We just saw that in the election.  And extremely surprising choices, like the election of Franklin Roosevelt or Ronald Reagan or this president, yield new directions and they just do.  They always have.  You don‘t stay stuck in the mud when the world is coming apart.  Peter? 

PETER BEINART, “TIME MAGAZINE”:  Ideologically, the Republican party‘s problem—half of them are anti-Keynesian, basically still believe what Herbert Hoover believed, that you don‘t stimulate the economy.  The other half believe the only kind of stimulus you can support is big tax cuts.  I think both of those ideas are no the longer the ideas that are current in America today and in Washington today. 

MATTHEWS:  What about the other half of the Republican party?  The Olympia Snowes, the Susan Collins, even Lindsay Graham? 

BEINART:  They‘ll get on board, because they‘re actually in swing states where they could lose their seats.  It is the hard core base of the Republican party, which it‘s been whittled down to now, which is still basically part of this captive ideology. 

(CROSS TALK) 

MATTHEWS:  Let me tell you something.  OK, the president endorsing the Steelers last weekend, Biden‘s endorsing—I‘m serious about this—was a statement that Arizona will always be red.  You can root against them.  It doesn‘t matter.  I‘ve never seen a president so—so dramatically say, I‘m on the blue side.  You‘re on the red side.  I‘m sorry. 

(CROSS TALK)

GORDON:  His point was simply that he didn‘t want anyone to be naive and assume because this president says there will be change or says that bipartisanship will, in fact, work, that you don‘t have to listen to the other side.  He‘s obviously optimistic about the opportunity.  But he‘s also a realist in terms of what Washington—you‘re right, politics is surprising.  Politics is ever changing.  But to a great degree, and you and I both know this having lived there for many years, too often, politics has stayed the same. 

MATTHEWS:  Let‘s take a look at the president.  Here he is staying on message that the American people are behind him.  He‘s claiming the mantle of popular rule right now.  Here he is. 

(BEGIN VIDEO CLIP)

OBAMA:  So let me be clear.  Those ideas have been tested and they have failed.  That‘s precisely what the election we just had was all about.  The American people have rendered their judgment.  And now is the time to move forward, not back. 

(END VIDEO CLIP)

MATTHEWS:  Well, 52 percent, a narrow majority, do support his stimulus package.  I‘m just asking you, Ed, do you think this weekend will lead it to be 48 or 56 by the end of the weekend?  Is it headed down or up? 

GORDON:  I think it‘s headed up.  I don‘t know what the number ultimately will be, Chris.  But you and I talked about this the day before the inauguration.  I told you that there‘s a little bit more of a gangster in Barack Obama than he‘s given credit for.  And I think we see it now.  He‘s really putting this front and center, suggesting to Republicans that, hey, if you don‘t come on board, I‘m taking this directly to the American people.  And as peter said, it‘s all about keeping your seat, to a great degree, for many of these Republicans who are on the fence. 

MATTHEWS:  Peter, that would be exciting.  Is he going to start nailing opponents and saying the following five Republicans in blue states stood in the way of my stimulus package?  I couldn‘t get what I needed because of them.  Nail them.

BEINART:  Yes.  It‘s what Ronald Reagan did effectively to Democrats who were in areas where he was popular.  You‘ve already seen the Democrats are going up on the air with radio ads.  I mean, if you‘re in a state that is moving strongly in a blue direction, like Maine for instance, you do not want to be on the opposite side of a very popular Democratic president, who people want to give a chance. 

MATTHEWS:  Gene Atkinson from western Pennsylvania was one of those guys.  We‘ll be right back with Peter Beinart and Ed Gordon for the politics fix.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Peter Beinart and Ed Gordon for more of the politics fix.  By the way, here‘s Marine One.  The president is boarding the plane.  He‘s going to take his first trip as president this evening, took it down this evening, down to Williamsburg to visit with the Democrats.  The House Democrats are having their—there he is getting off Marine One, the president‘s helicopter.  He‘s at Andrews.  He‘s going to head over to Air Force One.  This evening was his first trip ever as president of the United States on that incredible airplane called Air Force One, which I‘ve been on even in the back of it.  It‘s pretty impressive. 

Peter, let me ask you this tonight, how do we score this thing overnight?  If he gets the 60 some votes he needs to win the stimulus package in the Senate, his first big—is this his biggest win since November? 

BEINART:  Absolutely.  Out there in the country, people are not going to pay attention to how many votes.  It‘s going to pass.  And then if it works, it‘s a huge victory.  How many people remember how many votes Ronald Reagan got for his big tax cuts in 1981?  The point was he got them through and then they were perceived to work. 

MATTHEWS:  By the way, Ed, tomorrow we get the unemployment rate, as you know, the first Friday of the month.  And it could well be well above the 7.2 percent it was last month.  We could be in real trouble.  A timely win for the president might be helpful. 

GORDON:  A timely win and one could say historically, Chris, that this is the most seminal vote early on in anyone‘s presidency.  Usually we talk about a hundred days.  This is only a few weeks and he‘s—as he‘s already said this week, he understands another term, perhaps even his whole presidency hinges on this working. 

MATTHEWS:  Peter? 

BEINART:  That‘s right.  But I think people will give him some time for it to start to work.  But what working means is also for Barack Obama not only stimulating the economy.  Let‘s be honest.  Democrats are using this as a vehicle to try to change the American political economy.  That‘s what Republicans are afraid of.  But that‘s absolutely on the agenda here. 

MATTHEWS:  It seems to me if he can win tonight and also learn some lessons, he‘s way ahead.  One of the lessons, I think—check me on this, Ed.  One of the lesson he has learned is he needs to put a team together to get bills passed.  He had a team to get him elected him.  He needs a new team.  This is a different game.  You‘ve got to convince politicians you‘re right.  That is different than convincing regular people.  Politicians need to be taught with a hammer across their head sometimes. 

GORDON:  And that, to a great degree, is what Michael Steele is saying, that we‘re not going to just roll over and play dead because you were elected.  We‘re going to play politics.  He wasn‘t necessarily saying we‘re going to be stick in the muds.  But politics is politics.  You‘re right.  He‘s got to convince sometimes a margin of two or three people to come on board.  And as you know, Chris, sometimes that‘s harder than winning a couple million votes. 

MATTHEWS:  Peter, your thoughts here.  You‘re a brilliant guy.   

BEINART:  I wouldn‘t say that.  Look, Barack Obama is so popular that I think Americans want him to basically have his agenda early on, like they usually do with presidents who have a mandate.  I think the Republican party‘s problem is they don‘t want to be just a me too party, but they don‘t actually have an alternative agenda that really makes any sense and that can respond to a country that is in crisis. 

MATTHEWS:  Here‘s my belief: I think presidents have to be clear.  They have to make people understand exactly what they‘re doing, like when the guy comes to fix something in your house; he has to tell you what he‘s doing or she‘s doing.  It works that way.  You want to know what they‘re doing down in the basement.  You don‘t just want things just to work.  You want to know what they‘re doing in that car.  When they give you the bill, you want to know what they fixed in the car. 

Function; he has to explain how the stimulus package works.  If he doesn‘t do it tonight, he‘s got to do it Monday night on national television, that press conference.  He has to explain to us how spending almost a billion (sic) dollars is going to turn the economic engine of this country on, and how it‘s going to create millions of new jobs.  You better show us. 

GORDON:  He‘ll do that.  Whether it‘s true or not, whether it works or not, is a whole other matter.  As you said early on in the show, Chris, when the teleprompter is there and they‘ve had time to craft it, he‘ll deliver a masterful message. 

MATTHEWS:  How do you think he talks to his wife and the family?  Do you think he has a teleprompter?  Ha.  Just kidding. 

GORDON:  I would think not, Chris. 

MATTHEWS:  OK.  Thank you, Peter Beinart.  Thank you, Ed Gordon.  A big night in Washington.  Join us again tomorrow night to get the reviews of whether the president made it tonight or not.  At 5:00 and 7:00 Eastern tomorrow night, more HARDBALL.  Right now, it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.

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