updated 2/13/2009 10:59:00 AM ET 2009-02-13T15:59:00

Guest: Ron Brownstein, Todd Harris, Steve McMahon, David Sanger, Margaret Carlson, Nancy Pelosi, John Harwood

CHRIS MATTHEWS, HOST:  Live free or die.  New Hampshire‘s Judd Gregg jumps from the cabinet.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight: First it was Bill Richardson, then Tom Daschle, now it‘s Judd Gregg.  Tonight, Washington is shaken by the abrupt jumping from the cabinet of the New Hampshire Republican Senator Judd Gregg, President Obama‘s pick to be commerce secretary.  Gregg, counted on to sell bipartisanship in the new Obama administration, said he can‘t abide by the administration‘s positions on the giant economic recovery bill.  The man who would have been the new commerce secretary doesn‘t like President Obama‘s policies.  He doesn‘t want to be part of a team where he‘s seen as a token Republican.  He cited what he called “irresolvable differences,” as if he were explaining a divorce rather than a political move.

Plus, Nancy Pelosi plays HARDBALL with us.  She‘s on the show tonight and making it very clear she‘s ready to play hardball with the Republican, who have targeted her for attack.


REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  I think it just shows the poverty of their ideas.  They really cannot prevail.  The election told them we want to take the country in a new direction.  They‘re still wedded to their old ideas.


MATTHEWS:  And we‘ve got everything she said coming up tonight.

And what kind of a world is it that an entire political party, one that controls the presidency, the U.S. Senate, the U.S. House of Representatives, has to take dictation from three Republican senators from a part of the country increasingly dead ground for Republicans?  Good question, right?  We‘re going to hear from both the left and the right on that conundrum.

Also, 6 out of 10 Republicans—actually, 6 out of 10 Americans in a new Gallup poll said the government should investigate whether the Bush administration tortured terrorism suspects and its questions about its use of wiretapping.  How‘s that for a message to the politicians?  They want a probe.  And why won‘t President Obama go along with it?  The risks and rewards of investigating the Bush administration—that‘s in the “Politics Fix” tonight.

Also tonight, the birthday of President Abraham Lincoln, his 200th birthday, to be exact.  That‘s today.  I‘ve got some thoughts about him and President Obama, who went to Ford‘s Theatre last night.

But first, Judd Gregg skips town.  Ron Brownstein is with the Atlantic Media and CNBC chief Washington correspondent John Harwood also writes for “The New York Times.”

Ron, you know, just when you think it‘s safe to go in the water, the Republicans—well, one of the Republicans has just quit the cabinet.  Now, this adds to the loss of Bill Richardson, who was supposed to be commerce secretary.  Judd Gregg, he was supposed to be commerce secretary.  Of course, Tom Daschle, in that tragic case, had to quit from the cabinet last week.  What‘s up?

RON BROWNSTEIN, ATLANTIC MEDIA:  Well, two separate story lines.  One, as you suggest, may be haste in making this decision in the first place.  They...

MATTHEWS:  By whom?

BROWNSTEIN:  By—I think by both sides not recognizing some of the difficulties they would run into.  And the second story line is you talked about with Nancy Pelosi and perhaps bye-bye bipartisanship.  We‘re being reminded there are some fundamental differences between Republicans and Democrats and that outreach can take you...

MATTHEWS:  By the way...

BROWNSTEIN:  ... part of the way but not entirely the way.

MATTHEWS:  Everybody out there knows they‘re either a Republican or a Democrat.  There are some independents, but most people are used to thinking one way.  How could a guy like Judd Gregg, who grew up in a Republican family, a Yankee Republican, think that he could sit in a cabinet with a bunch of liberal Democrats, say we‘re going to have sort of this loosey-goosey Census approach, which the Democrats like because it counts more Democrats, and he‘s going to go along with a big-spending Democratic stimulus bill, when he‘s a conservative Republican?

BROWNSTEIN:  I think the question is not so much why they concluded it couldn‘t work as why they thought it could work in the first place.


BROWNSTEIN:  Gregg is a conservative Republican on fiscal issues, and I always wondered how he could go out and advocate some of the Obama policies, which are—you know, could he go to the U.S. Chamber of Commerce and say, I support mandating that all employers provide health insurance for their workers?  Could he go to the utilities and say, I support a mandate on every utility to reach renewal power, much less a card check legislation?  So it was always a question how this would work in practice.  And I guess we‘ll more, but it sounds like they decided, ultimately, the differences too large on some of these issues.

MATTHEWS:  Remember Ross Perot used to say, Measure twice, cut once? 

John Harwood, they should have measured twice before they cut.

JOHN HARWOOD, CNBC, “NEW YORK TIMES”:  Well, exactly.  And I agree with Ron‘s point.  And I want to make a distinction.  You know, some people talk about this as a sign of partisanship.  Fair enough, but I think it‘s more ideology.  Certainly, we see in our party system today a very, very powerful overlap between those two things, but it‘s not partisanship in the petty sense.  Nobody can accuse Barack Obama or Judd Gregg of being small-minded on a personal basis on this issue.

And I think that what happened is we see, as Ron said, how far apart they are.  I think this, by the way, makes all those Republicans who voted against the Obama stimulus package feel better about it and look better about it because it allows them to say, Look, we have fundamental differences of ideology and approach with this administration.  And I think this is a very, very bad sign for the prospects for achieving things like entitlement reform and health care reform, both of which everybody said for a long time you need two parties sort of underneath a solution to prop it up and make it long-lasting.

MATTHEWS:  OK.  It seemed to me...

HARWOOD:  Very, very difficult to achieve that.

MATTHEWS:  It seemed to me, John—I‘ll make your point well—the three Republican senators, Specter, Collins and Snowe, who went along with the package this week went along as a decision-making process.  They said, If you do this, we‘ll join you.  In other words, they negotiated their participation.

Was there a misapprehension on the part of Judd Gregg that he would be part of the administration and he would be able to broker at least a piece of their policies so that he could be comfortable endorsing them, and found out this week, when nobody was taking his calls, that he was just going to be a token, he was going to be like—well, like Norm Mineta was on transportation?  Not that there‘s anything wrong with what Norm did, but he didn‘t come on as someone to argue issues.  He went on in a ministerial role, to perform a cabinet function, not to be a coalition member.

Was Judd Gregg wrong to think he would have a voice at the cabinet in selling—not just selling but making economic policy?  Was he wrong to think that?

HARWOOD:  Well, obviously, he had a wrong impression coming into this.  And I think we need more reporting.  This was a tricky one because while it‘s an economically-related post, it‘s also a bit off to the side.  You know, one of the Obama people, in exchanging messages with me about this just since I learned this news, said, Come on, how many commerce secretaries in history can you name, as if it was sort of a marginal post.

On the other hand, by reaching so far ideologically to a conservative, Obama was guaranteeing that there was going to be a difference of view in some of the economic discussions that took place, and I think nobody, as Ron indicated a moment ago, appreciated just how difficult it was to have those discussions, in particular, entitlement reform.  That‘s something that Gregg had a lot of credibility, it was a real cause of his in the Senate.

People thought that, you know, at a time when the administration is spending $800 billion to stimulate the economy, but saying, We‘re going to very quickly get to the issue of entitlement reform, Judd Gregg gave conservatives and moderates at least a reason to feel decent about that, that maybe they would have someone who spoke their language in those discussions.


HARWOOD:  Not going to happen.

MATTHEWS:  Well, apparently, here‘s a break in the news.  Here‘s a statement just out from the White House, White House press secretary Robert Gibbs.  Quote, “Senator Gregg reached out to the president and offered his name for secretary of commerce.  He was very clear throughout the interviewing process that despite past disagreements about policies, he would support, embrace and move forward with the president‘s agenda.  Once it became clear after his nomination that Senator Gregg was not going to be supporting some of President Obama‘s key economic priorities, it became necessary for Senator Gregg and the Obama administration to part ways.  We regret he has had a change of heart.”

In other words, they‘re blaming him, saying he was going to climb aboard and support Obama.  Now they‘re saying he changed his mind and said, I can‘t go along with the stimulus package and everything else.

BROWNSTEIN:  I think—I think we know two things...

MATTHEWS:  They‘re nailing him.

BROWNSTEIN:  Yes.  I think we know two things from the first month of the way this president operates.  First, I do not think he would have been a token.  I think that Obama would have listened to him and would have had his—he would have had input.  But it‘s also clear that Obama was not going to change his fundamental direction, and that‘s what we see in the way that he‘s dealt with Senate Republicans and House Republicans.  It‘s not that he is just going through the motions of trying to listen, but it is more at the margins.  He has a clear direction in which he wants to direct policy.

And I think that, as you saw in that statement, the White House is saying, I think pretty clearly, that they do not think that Gregg could and Gregg felt that he could not go along.  The flip side of this, Chris, though (INAUDIBLE) talking about the flip side is that even as you‘re seeing these divisions and Republicans kind of unifying, you‘re also seeing remarkable levels of Democratic unity in the early days of the—every Senate Democrat voted for this.

MATTHEWS:  Including Joe Lieberman?

BROWNSTEIN:  Yes.  And you know...

MATTHEWS:  (INAUDIBLE) Lieberman with no complaint or no discussion?

BROWNSTEIN:  Go back and look at Bill Clinton in ‘93.  Six Senate Democrats, forty-one House Democrats voted against the final passage of his economic plan.  Only 11 House Democrats and no Senate Democrats this time...

MATTHEWS:  That‘s the untold story.

BROWNSTEIN:  That is the untold story.  It‘s the other—it‘s really the flip side of the phenomenon you‘re seeing today with Judd Gregg.


BROWNSTEIN:  Both parties are unifying but moving apart.

MATTHEWS:  So John, here we have once again a division across party lines.  And I, for one, certainly believe that most people who vote for either political parties have strong principles for doing it.  It‘s not just that they grew up in a family that was one way or it‘s an ethnic thing or a historic thing.  They do think it through.

Republicans tend to be much more pro-free enterprise, much more pro-business, much more questioning of big labor, for example, much more questioning, certainly, of big government, certainly anti-tax.  Democrats believe in the social role of government.

HARWOOD:  Exactly.

MATTHEWS:  They believe in a bit of income redistribution.  Let‘s be honest about it.  They believe in helping people who don‘t pay a lot of income taxes by giving them refundal (ph), if you will—that‘s the term they use—tax breaks, in fact, tax dollars they hadn‘t paid themselves in income tax.  There‘s a very different approach here.

What do you think it was about the census?  I just thought we‘d get that—we‘d cover that one.  He pointed out today, Judd Gregg, the one thing he disagrees with about the administration is the census.  Is it that Republicans believe in a hard heat count—if you don‘t show up at the doorway when the census taker comes around, you don‘t exist?  Democrats say, Well, you must exist because there are a lot of poor people living in the back rooms of those row houses.  They must be counted.

HARWOOD:  It‘s sort of the governance equivalent of the argument we have about voting participation.  Republicans take a sterner line toward who exactly is qualified to vote.  How do you prove it?  And Democrats tend to be somewhat more expansive.

And in the census, when you‘re talking about counting large numbers of people, there are statistical methods that are used that some Republicans feel very deeply distort the nature of who we can confirm as a United States citizen.

I got to tell you, though, I do not think that Judd Gregg quit this cabinet because of the census.  I think it‘s a larger philosophic thing.  I think the stimulus is likely much, much more important than the counting methods in the U.S. census.

MATTHEWS:  Was it significant to you that he didn‘t vote, John?

HARWOOD:  Well, I thought that was a very interesting sign because when he was—when they were counting votes for this package and people were trying to figure out how much Republican support are they going to get, they wondered, Well, are they going to get Johnny Isakson because they gave him a big amendment on auto sales, or are they going to get Chuck Grassley because they gave him the AMT?

Well, surely, they‘re going to get Judd Gregg because he‘s been appointed to their administration, and Gregg said, No, I‘m not going to vote.  That told you something right there.  He simply could not find it within himself, even as he was getting ready to join this president‘s administration, to vote for his plan.  There was no ethical reason why he couldn‘t do that.

MATTHEWS:  But was—but go back to what you said initially, that this is about belief.  Could it be he‘s a principled Yankee Republican?


MATTHEWS:  He goes back to that very strong, flinty view of politics. 

It has to be about principle always.

HARWOOD:  I absolutely believe that.  And it‘s one of the reasons, frankly, Chris, why it so surprised me that Judd Gregg joined the administration in the first place, or set out to join it...


HARWOOD:  ... because he‘s not—he‘s not a political guy, he‘s a policy guy, very, very...


HARWOOD:  ... in a very serious way.

MATTHEWS:  Well, we‘ll see that tonight.  By the way, it looks to me like the White House is putting out the word that he threw themselves at them.  It wasn‘t their fault that this didn‘t work out.  If there was a quick, messy divorce here, it‘s because he threw himself at the Obama people.  They‘re...

HARWOOD:  Hey, Chris?

MATTHEWS:  This is getting a little nasty.  This is not an amicable divorce.

HARWOOD:  Hey, Chris...

BROWNSTEIN:  It‘ll be interesting what this means for Gregg in 2010 because it reaffirms his partisanship in a state that is moving in the other direction.


MATTHEWS:  He‘s not going to run.

HARWOOD:  Hey, Chris?

MATTHEWS:  Ron Brownstein—yes, John?

HARWOOD:  I got to make one point, which is I think there‘s an analog here to what happened with Jim Jeffords in 2001.  You remember, George Bush came to office in that very disputed election, pushed through very strongly that big tax cut, even though there wasn‘t a tremendous amount of popular demand nationally for it, and in the wake of that, you had Jim Jeffords of Vermont say, I‘m out of here, and he became an independent.  That shifted control of the Senate to the Democrats.  This has the feel of a Jim Jeffords moment to me.



MATTHEWS:  He also didn‘t get attention to his milk supports.  Anyway, thank you, Ron Brownstein.

HARWOOD:  That‘s true.

MATTHEWS:  And thank you—all politics is local.  Thank you, Ron Brownstein.  Thank you, John Harwood.

Much more on Judd Gregg‘s jumping ship from President Obama‘s Commerce Department.  He‘s gone.  The guy‘s gone.  It‘s over.  He‘s not going to be commerce secretary.  Out of nowhere late this afternoon.  What‘s it mean for the president?  He can‘t keep his cabinet together.  We‘ll be talking about that in a minute.

This is HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  In a spirit of bipartisanship, President Obama accepted the possibility, at least, of having Judd Gregg as his secretary of commerce.  Today, Judd Gregg withdrew his nomination in a very brutal divorce, saying he had irresolvable differences with the administration.  He hasn‘t really even taken office yet.  We‘ve got Steve McMahon here, who‘s a Democratic strategist, and Todd Harris, who‘s a Republican strategist .

Well, Todd, you first.  Was this just a bad marriage, a Republican who believes in this, he‘s not some operator who does what works politically.  Judd Gregg‘s a Yankee Republican who‘s a conservative.


MATTHEWS:  It makes sense that he‘d split.

TODD HARRIS:  Well, no, I don‘t think...

MATTHEWS:  Well, why‘d he ever come in?

TODD HARRIS:  I don‘t think this had to be a bad marriage.  I think that there‘s a veneer of bipartisanship that is only about an inch deep in...

MATTHEWS:  What‘s the bipartisanship about?  It‘s a liberal bill.

TODD HARRIS:  No, no.  But that‘s not the only reason why he‘s saying that he doesn‘t want to be there.  He‘s also talking about the census issue, which is a huge issue that people haven‘t really given a lot of consideration to.  This is the Obama administration saying that they want the census director for the upcoming census to report directly to the White House, as opposed to how it‘s always happened in the past.

MATTHEWS:  So what?

TODD HARRIS:  So Chris, the census...

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  Everybody reports directly...

TODD HARRIS:  The census is...

MCMAHON:  ... to the White House.  Every cabinet officer reports...

TODD HARRIS:  Putting political pressure...


TODD HARRIS:  ... on the guy who‘s in charge of...

MATTHEWS:  You know what‘s going on here.  You know the difference between Republicans on the census...

TODD HARRIS:  That‘s a political power grab.

MATTHEWS:  Democrats would like to make sure that every possible person out there who might be in this country gets counted in the census.  Republicans would like to make it a little stricter...

TODD HARRIS:  No.  Come on.

MATTHEWS:  ... like, unless you answer the door when somebody comes there, you don‘t exist.


MATTHEWS:  That‘s your approach, right?


MATTHEWS:  Which is a reasonable approach.

TODD HARRIS:  Bill Clinton never did this, you know, George W. Bush, you know, Ronald Reagan.  All of—every president going back forever has always had the census director report to the secretary...


MATTHEWS:  You‘re getting into the boxes and everything.  I‘m talking about the question of whether we have a census or not that counts everybody lives in this country or only people that show up at the door when the person knocks.  You have a different view than Democrats.

TODD HARRIS:  Would you have wanted Karl Rove to be in charge of the census?

MATTHEWS:  OK.  OK.  I don‘t want—let‘s get off the census.  You‘re just driving me crazy with this census talk.  It‘s boring as death, OK?  It‘s not...


MATTHEWS:  The issue he raised right up front was the stimulus package.  Judd Gregg said, I can‘t go out there and sell it.  He can‘t go to a Chamber of Commerce meeting and say, I just love this president‘s economic approach.  So he‘s out of there.

MCMAHON:  Here‘s what I don‘t understand.  This is a man who apparently volunteered himself to the Obama administration...


MCMAHON:  ... to become commerce secretary after having previously voted against—or to abolish the Department of Commerce.  And now he acts surprised that Barack Obama put forward a stimulus package that gives tax cuts to 95 percent of working families, that invests in infrastructures and shovel-ready jobs.  This is exactly what the Obama campaign said they were going to do.

MATTHEWS:  And he wouldn‘t vote for it.

MCMAHON:  It‘s what they said they were going to do during the transition.

MATTHEWS:  We‘re about to...

MCMAHON:  It‘s what they brought forward as legislation.

MATTHEWS:  We‘re getting a press conference here at any minute to break the news.  He‘s going to tell us why.  But I‘ll tell you one thing.  It‘s really about philosophy.

TODD HARRIS:  It is about philosophy.  And I respect Judd Gregg, who is not an ideologue, who is not some conservative ideologue, that he looked at this administration and said, I thought we were going to be able to work together in a bipartisan manner.  Obviously, we can‘t.

MATTHEWS:  Is there an incompetence question here?  Is somebody to blame for the fact we‘ve had Richardson off, Daschle off, Killefer, who‘s deputy OMB director, all these problems, Geithner‘s tax problems, which are going to be a continuing embarrassment to the administration, besides the fact the guy can‘t talk, which is something of a problem...

TODD HARRIS:  As we learned the other day, yes.

MATTHEWS:  Yes.  Has this administration got a problem of personnel, just picking the wrong people, not vetting them right and having nothing but problems?

TODD HARRIS:  I think their larger problem is not competence, it‘s one of all these exceptions, all these waivers they keep giving to people like Lynn, to people like Geithner.  They made all these campaign promises, said, This is how things are going to be.  And as soon as they get into power, they start issuing waivers left and right to all their campaign promises.

MATTHEWS:  You want to attack the people that are still there, is what you want.  I know what you want.


MCMAHON:  He wants to take apart any veneer or take off any veneer of bipartisanship.  The fact of the matter is...

TODD HARRIS:  It‘s only a veneer.

MCMAHON:  ... the Obama administration, Barack Obama and Rahm Emanuel, have been up meeting with Republicans consistently over the past several weeks.

The Republicans chose not to take the olive branch.  And Barack Obama said—correctly, I think—I would...


MCMAHON:  ... rather pass it with you, but I will pass it without you, if that‘s what it takes.


MATTHEWS:  Is this just Barack Obama coming to grips with the reality of Washington and American political life, which is, most people grow up and believe in certain philosophies?  They don‘t all agree.  There‘s a real dividing line between Republicans and Democrats?

HARRIS:  It...

MATTHEWS:  Right now, there‘s a marginal advantage to the Democrats, but they haven‘t convinced the Republicans to change their minds.  It is real, this difference. 

HARRIS:  It is not just Republicans, Chris. 

I think, if Barack Obama rode into town as the—as the—the poster boy of change, then Nancy Pelosi is the poster woman for more of the same. 

Let‘s remember, it was Pelosi and Reid who wrote the original version of this bill behind closed doors.  Bipartisanship is not just inviting Republicans over for cocktails at the White House.  And it is also not, “You agree with everything that we want to do.”

Bipartisanship is really...

MATTHEWS:  You mean they‘re writing it the way Dick Cheney wrote his energy policy? 

HARRIS:  Look, I‘m not...

MATTHEWS:  You mean like that, behind closed doors?

HARRIS:  I never said Dick Cheney was bipartisan, nor—nor, I think, did Dick Cheney. 



MATTHEWS:  All right.  OK. 

Let‘s—we‘re waiting now for Judd Gregg to make a big statement.  This is going to be newsworthy as hell, because he‘s going to say why he quit, why he walked.

And I think it‘s going to have something to do with the fact they weren‘t ready to listen him and his thoughts.  He was just in there as a token.

We will see, though.

Todd Harris and Steve McMahon, they‘re staying with us.

We will be back with the presser from Judd Gregg, the Yankee Republican who is talking.  Live free or die. 

We will be right back.



SEN. JUDD GREGG ®, NEW HAMPSHIRE:  Well, I want to begin...

MATTHEWS:  There he is, Senator Judd Gregg, coming on to talk to the press. 

Here he is. 


GREGG:  ... position of secretary of commerce.  This was truly a great honor.  And I felt that I could bring some very positive, constructive things to this administration and was looking forward to that.

However, as we proceeded down the road here since the nomination was made, it‘s become clear to me that, you know, I have been my own person for 30 years.  I have been—I have been a governor, and I have been a congressman, and I have been a senator, made my own decisions, stood for what I believe. 

You know I‘m a fiscal conservative, as everybody knows, fairly strong one.  And it just became clear to me that it would be very difficult, day in and day out, to serve in this cabinet or any cabinet, for that matter, and be part of a team and not be able to be 100 percent with the team, 110 percent with the team.  You know, you can‘t have a blocking back who only pulls out for every second or third play.

And the president has been incredibly gracious.  And none of this decision is related at all and in any way to his willingness to include diversity of thought and initiative within his cabinet.  Just the opposite.  He has been a person who has reached out and aggressively reached out across the aisle, and I immensely respect that, and I immensely respect him.  And I know he‘s going to be a strong and effective and good president. 

But, for me, I just realized, as these issues started to come at us, that—and they started to crystallize, that it really wasn‘t a good fit, and that I wouldn‘t be comfortable doing this, and that it wouldn‘t be fair to him to be part of a team and not be able to be 100 percent on the team. 

So, with that in mind, I have said I‘m going to withdraw from this process. 

And I realize that to withdraw at this point is really unfair, in many ways, but to go forward and take this position and then find myself sitting there and not being able to do the job the way it should be done on behalf of the president 100 percent, that would have been an even bigger mistake.  So that is why I have made this decision. 

I do believe genuinely that I can be even more effective for this presidency in the Senate than maybe even in his cabinet.  I—I still think I have a fair amount of influence in getting things done around here, and I suspect, hopefully, that that will be retained.  In fact, from the comments that I have received from my colleagues, that—that seems to be even more the case. 

And there are going to be a lot of issues on which I‘m going to want to jump in on and carry his water here in the Senate and hopefully be successful, because there are a lot of things that have to get done, and I‘m willing to work to do that. 

I want to especially thank a few people.  My wife, Kathy, who‘s put up with me for all these years, an incredible amount of time, and during this last week has had an especially difficult task putting up with me, as we‘ve sought to work through this issue. 

Kathy and I want to thank the governor of New Hampshire, who has been gracious, fair, and very open with me and with us on this.  And he‘s gone the extra mile. 

I want to thank Bonnie Newman, who was going to succeed me in the Senate, a person of immense talent.  You folks here in Washington don‘t know her, but we in New Hampshire know her well.  She‘s—whenever she‘s been called on to do a job, she‘s done it extraordinarily well, her last job being the president of the University of New Hampshire.  Actually, the Senate probably loses not having her here. 

I want to thank the people of New Hampshire who have allowed Kathy and I to represent them for all these years in all these very interesting times.  And hopefully we‘ve done a good job of carrying the New Hampshire message of common sense and fiscal responsibility here to Washington.  And we intend to continue to do that and do it aggressively. 

The bottom line is, this was simply a bridge too far for me.  The president asked me to do it.  I said yes.  That was my mistake, not his.  Well, maybe it was his.  Maybe (INAUDIBLE) as his.  But it was my mistake, obviously, to say yes, because it wasn‘t my personality.

And after 30 years of being myself, it would have been hard to assume another role that would have—where I couldn‘t have been 100 percent all the time the team player that he needed. 

Again, I want to express my admiration for this president.  I think he has started off very aggressively to address some very important issues.  And I admire the people he‘s been able to attract around him, and I‘m sure he‘ll find somebody who‘s strong and effective to take on this job. 


GREGG:  Why don‘t we just—I will get around to everybody. 

QUESTION:  What role does issues with the census play?  And will you run for reelection in 2010?

GREGG:  The census was only a slight catalyzing issue.  It was not a major issue.  Will I run?  Probably not. 

QUESTION:  Can you just elaborate on the census as being an issue? 

And do you know...

GREGG:  Well, I don‘t need to elaborate on it.  It was a slight issue. 

I mean...

QUESTION:  Well, what was the issue, from your perspective? 

GREGG:  It wasn‘t a big enough issue for me to even discuss what the issue was. 


QUESTION:  Senator? 

GREGG:  Yes? 

QUESTION:  Will you vote on the stimulus?  And what do you make of the administration‘s new plan (INAUDIBLE) financial crisis?

GREGG:  Well, I think the administration‘s doing an extraordinary job of trying to manage this financial crisis.  I think their decision to move quickly on the TARP and get the extra TARP money in place was very important. 

I believe that Secretary Geithner has put forward a very—the outlines of an extremely comprehensive plan that I think will work when it gets the detail behind it.  I think, as soon as the detail starts to flow in behind the plan that Secretary Geithner has laid out, people in the market are going to react to it positively, because what they have basically—what they basically outlined was what we need, a plan that first addresses real estate and stabilizing the price of real estate, and, secondly, addresses the issue of how you continue to stabilize and build the financial system. 

I think their commitment—the Fed‘s commitment in the area of TALF of over $1 trillion is just a huge commitment which hasn‘t really been absorbed yet as to its implications for the market.  I genuinely believe that, once the market takes a look at what they have proposed, as the specifics flow in behind the outline, the market‘s going to react very positively to it. 


QUESTION:  How are you going to vote on the stimulus? 

GREGG:  Well, can I save that for tomorrow when we vote on the stimulus bill?


QUESTION:  The White House put out a statement that said that you had approached them about the job and expressed a willingness or readiness to work with the administration (INAUDIBLE) How would you reconcile that with what your expression today is? 

GREGG:  Well, one of the nice things about this business is everybody has a different recollection of what happened.  There is no question but that, when they asked me if I would do the job, I said I would.  And that‘s the bottom line. 

And as a very practical matter, I made a mistake.  I should have focused sooner and more effectively on the implications of being in the cabinet versus myself as an individual doing my job.  That‘s something I will struggle with for a while as to why I wasn‘t more focused sooner. 

I think this—obviously, what happened was, as we moved forward over the week, I did focus.  This came very quickly, remember.  It didn‘t come over a period of months; it came over a period of a week- and-a-half, well, two weeks now.

So I guess the euphoria of the desire to do something and move—maybe do something else that was interesting and also my genuine belief that this administration—and specifically this president—is going to be a good presidency is what caused me to say yes without really thinking through the implications to me as—as an individual and the way I approach issues, and the fact that I have always been independent and had a fair amount of opinion and principle that would be hard for me to adjust or trim my sails on. 


MATTHEWS:  Well, you know, that‘s—his statements is one of the reasons I‘m—I‘m happy with my life in being concerned about politics, because that makes perfect sense to me, what he was saying there, Todd. 

He—he said it took a while to focus, to realize that it wasn‘t just taking a job for a president he liked.  It wasn‘t just the euphoria of taking the—getting asked to do it or being allowed to do it.

It was, he finally realized he had to join the mental team, the philosophical team, and he wasn‘t able to do it. 

I thought it was pretty honest.  I hope it‘s all true.  It sounds like it‘s a perfectly understandable recognition that you make a mistake. 

HARRIS:  No, I—I think he is, like, practically oozing sincerity, actually, in this—as he gives this press conference.  And it is clear that he has a great deal of admiration and respect for President Obama. 

But that doesn‘t mean that he‘s on the same ideological team.  I—I tip my hat.  I wish we had more people in this Washington like this, who are, A, willing to say when they make mistakes, but—but also, you know, willing—willing to stand up and do what they actually believe in. 

I think the Senate will be a better place for him.  I think he would have served well in the administration. 

MATTHEWS:  You know, it seems to me, Steve, the worst danger in politics is the euphoria which comes from position, the sense that, oh, my God, I‘m getting this great big job, and not thinking, what does it say about what I believe? 

And it took him a long time to face up to it.  It looks to me, by the way—I know this bothers us here on HARDBALL, because both sides agree. 


MATTHEWS:  This is really, roughly, what the administration is saying now.

They‘re saying, they got the impression from Senator Gregg he was going to be a team player; he was going to go along with Obama‘s philosophy.  He was going to, you know, buckle down and be a Democrat, in effect.  And—and he left the wrong impression, apparently, because he didn‘t think it through. 

MCMAHON:  Well, I think it‘s—I think it is interesting, because I got a slightly different take on it. 

I thought he was going to buckle down and do what he thought was best for the country.  And when his party abandoned the stimulus package in droves, and when they indicated that they have no interest in supporting what‘s best for the country, at least what President Obama believes what is best for the country, they chose a path that I think made it more difficult...


MATTHEWS:  You‘re incapable of thinking on this new, higher level. 


MATTHEWS:  ... Steve McMahon, you are incapable of thinking that this...


MATTHEWS:  ... trying to channel what we just heard. 


MATTHEWS:  This guy is saying, he is a Republican.  He believes in the philosophy of fiscal conservatism.  He doesn‘t see it manifested in this new team, so he‘s not going to join it. 

MCMAHON:  His—he‘s—he‘s a stand-up guy.  He‘s well-regarded and well-respected in the Senate.  I think we could just see in this news conference why that is the case.

But it wasn‘t a surprise to anyone, including Judd Gregg, that the Obama administration was putting together a great big stimulus package.  It was not a surprise that it was going to be tax cuts, not for business, but for families, that it was going to be shovel-ready construction jobs. 

I just don‘t understand what happened in the last two weeks that was such a surprise to him...


MCMAHON:  ... in what they were offering the country.  Everyone knew what they were going to do.

MATTHEWS:  Not everybody is as perfect as that.

Maybe what he said was—I will quote him here—“I decided I can‘t be a blocking back, who is only—who only pulls it out for every third play.”

In other words, he thought he could be like a cafeteria Catholic.  He could say:  OK, I‘m going to go along with them on things I care about, maybe the right kind of trade policy, if we can agree on it.  But he wasn‘t thinking it through:  I‘m not going to agree with them on the census.  I‘m not going to agree with them on stimulus policy.  I‘m not going to agree with them on fiscal policy.  I‘m probably not going to agree with them on card check.

He probably started making a list with his wife, like you or I would do, and realized he can‘t join this team. 

MCMAHON:  He may have done that.  But the great big thing in front of him and the country was the stimulus package, and it couldn‘t have been a surprise what was in there.

MATTHEWS:  You won‘t give an inch, will you? 

MCMAHON:  Well, no, I—he is a stand-up guy.  He‘s a respectable, honor—honorable guy, but it wasn‘t a surprise that Barack Obama put the stimulus package forward. 


MATTHEWS:  He lacked...

MCMAHON:  And he voted against it. 

MATTHEWS:  He lacked your clear vision. 


MATTHEWS:  Steve McMahon, thank you, and Todd Harris.

Todd Harris has won this week.  He is smart. 


MATTHEWS:  Coming up: my interview with the speaker of the House, Nancy Pelosi. 

It‘s quite an interview.  She is tough as nails.  She lays it out.  She tells me why she thinks the economic recovery plan will work and she is willing to live by the consequence.  She says, if the economy doesn‘t turn around by next year, the Republicans ought to gain.

Wait until—well, let‘s hear it in her own words.

You‘re watching HARDBALL. 


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

Stocks rebounding from heavy losses earlier in the day, after Reuters reported the Obama administration is working on a plan to subsidize mortgage payments for troubled homeowners—the Dow Jones industrials losing just six points on the day, after having been down over 250, and the S&P 500 gaining about a point-and-a-half, while the Nasdaq picked up 11. 

Retail sales rose a better-than-expected 1 percent in January.  It was the largest gain in 14 months and the first gain in over six. 

Six hundred and twenty thousand people filed for first-time jobless claims last week.  That was slightly better than the week before.  But the number of laid-off workers continuing to receive unemployment benefits rose to a record 8.4 million. 

And oil prices continue to slide, crude falling $1.96, closing at $33.98 a barrel. 

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



Here‘s my interview today with Nancy Pelosi, late today in the Capitol. 


MATTHEWS:  Madam Speaker, thank you. 

I was watching yesterday from my office, and I saw Senator Harry Reid walk out with some Republican senators and announce there was an agreement on the giant economy recovery bill. 

Where were you?

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  Well, they had agreement among themselves.  And we were pretty much in agreement.  But they had just reached agreement, were eager to announce it. 

We wanted to see the language.  And it all worked out just fine.

MATTHEWS:  But Senator Reid said there was an agreement at that time. 

Was there, between the House and the Senate?

PELOSI:  Pretty much. 

But, again, you have to see the language.  In other words, words have power, and they make a difference.

And, so, we wanted to make sure we were stipulating to the same language, because the issue at the center of all of it was the issue of school construction.  School construction is a key priority for House Democrats and for President Obama, as we heard in his press conference and his State of the Union—his Inaugural Address. 

So we just wanted to see how it was treated.  In the bill, we wanted to see it as a separate line item, school construction, and more robustly funded.  When all the cuts came in to bring the bill down, school construction got cut.  OK?  So did lots of other things.  But then there was opposition to having this a separate line item.  It had to go into another part of the bill and that‘s—we wanted to see what that language was.  But it‘s all settled. 

MATTHEWS:  Why did three Republican senators get the right to toy around with a bill of this importance historically?  It seems like they get to decide what‘s in, what‘s out, and whether there is, in fact, a recovery bill.  I‘m talking about Senators Specter, Snowe and Collins.  They were treated yesterday by the Senate majority leader as if they were the profiles in courage, the key people in passing this bill. 

PELOSI:  Well, you have to talk to the Senate about profiles in courage over there, as well as the role they all played.  But what‘s important to note is that 90 percent of the bill is the bill that the House wrote and sent over there.  This is the legislative process.  We act.  They act.  We reconcile.  And in order to get their votes, they had to make certain changes in the legislation.  As long as it was not undermining the purpose of our interest in school construction, unemployed workers, those kinds of issues, we were able to find compatibility. 

But again, as far as the dynamic in the Senate is concerned, I have my hands filled as the speaker of the House juggling all of the interests here.   

MATTHEWS:  But you are the only Constitutional officer on Capital Hill. 

PELOSI:  That‘s right. 

MATTHEWS:  Let me ask you, why do Republican have this ideological problem with school construction as a federal line item? 

PELOSI:  You would have to ask them.  But one—I‘m glad you asked the question, because they don‘t want school construction as a line item.  Some of them say, and I think legitimately, they‘re concerned that it will become a permanent situation.  And what we‘re saying is, no, this is a temporary and transformational piece of legislation that will take us in a new direction.  We need to focus on school construction.  It creates jobs immediately, prepares our students in schools for the 21st century.  It does it all at once.

So I appreciate their concern that it not become permanent.  And I want that message to go out very clearly.  We are not raising the baseline.  We are just doing something that is, again, a stimulus to the economy for recovery, not raising the baseline for the budget, because we can‘t afford that. 

MATTHEWS:  I wanted to look at this as an object lesson for people trying to understanding how the government works.  We have a Democratic president, who won with a real majority, a Democratic House with a strong majority, a Senate with 59 now senators who are Democrats, including Joe Lieberman—

PELOSI:  -- been decided? 

MATTHEWS:  Well, it‘s pretty close.  Joe Lieberman is voting with the party now. 

PELOSI:  Very strongly so. 

MATTHEWS:  And yet—and yet it seems like it is a coalition government that has been formed here, where you need three Republicans to get the—will you have to suffer through this ritual on health care, on energy, on every big bill this year?  Are you going to need those Republicans? 

PELOSI:  Well, first of all, issues that relate to transforming the health care insurance system and the rest, I think it‘s important for us to have bipartisanship.  And we can‘t really succeed without that legitimacy of the most support possible.  But I think that this is important that we move quickly, because it was urgent.  The president wanted swift, bold action now.  And one week and one day from his Inaugural Address, we passed the bill in the House, sent it to the Senate.  Just about three weeks later, the president will have a bill. 

But as we go forward, we have to go forward under the regular order in the House and in the Senate, with our regular committee work, as bipartisanship weighs in there.  And then the product will be something that I think will be more acceptable as we go along.  And part of this was this speed with which we needed to act because of the urgency among the American people and their uncertainty. 

This legislation, in our view, has a strategic design.  It is, again, transformational.  And the creation jobs and bringing stability to our economy and inspiring confidence among the American people, we think the House and Senate versions and now this reconciled legislation does just that. 

MATTHEWS:  How will we judge its success, if next year at this time the unemployment rate is higher than it is now?  Can you say this was a success? 

PELOSI:  Well, right now, 600,000 people a month are losing their jobs.  That means tens of thousands a day are losing their job.  So we have to stop that.  And we have to stop that soon.  And that‘s why this bill is as big as it is. 

MATTHEWS:  So if it works, it will stop that loss of jobs? 

PELOSI:  It will stop the loss of jobs.  And the president has said 3.5 -- whatever the number is now.  But up to four million jobs saved or created.  And we hope that the emphasis will be on created, that a large majority of those jobs will be created.  But it is about saving jobs, as well. 

But we‘ll be accountable.  You know?  We had put this—

MATTHEWS:  Right. 

PELOSI:  -- initiative forward with a focus on, again, rebuilding—a strategic plan to create jobs, stabilize the economy by building infrastructure for America in a green way, by investing in science and technology for health and for keeping us number one innovatively and competitively in the world, to invest in the education of our children, where innovation begins, and to reduce our dependence on foreign oil, while our investments in renewable energy are—

So it has an agenda about the future.  It‘s not some old fashioned public works bill, although it will hopefully have the impact in our era that that did then. 

MATTHEWS:  Let me—you were an expert on vote counting.  Looking down, having gone through this, you have almost all the Democrats with you, except for about 11 I think. 

PELOSI:  We‘re strong amongst the Democrats. 

MATTHEWS:  Senate side held all the Democrats.  Does that look—are you going to get a health bill?  Ted Kennedy is in ailing health, your friend, Ted Kennedy.  Are we going to get a health care bill this year, based upon the numbers you‘ve seen in this fight? 

PELOSI:  Well, I think we must begin.  I think we‘ll start on it.  Let me just say that part of the pride that we have in the first few weeks of this Congress and this new president is that we were able to send the Children‘s Health Bill to the president, insures 11 million children in America, right after we protected women in the workplace, with the Lily Ledbetter Bill, and now we‘ll do this bill.  But in the Children‘s Health Bill, 11 million children insured.  In this bill, investments in science and technology, the health IT, information Technology, that will make health care less expensive and safer for the American people. 

So we are taking steps in that direction.  There are other provisions in the bill that will be helpful as we go forward.  We‘re waiting to see the president‘s budget and how he handles health care in the budget.  But we must begin the process.  I don‘t know if it can be done this year.  It certainly should be done this term.  But we must begin as soon as possible.  We already have, as I say, with the children‘ health. 

MATTHEWS:  Joe Biden, the vice president, I guess we‘re all familiar with him as a senator, but he‘s vice president now.  He said that the House feels it was rolled in this process.  You‘re laughing. 

PELOSI:  May be some.  My members think that, from time to time, that they are.  The fact is when you have to move with—the president wants swift, bold action now, you have to move quickly and expeditiously.  And so some may have thought we like the regular order.  We could have taken much more time.  And we‘ll have that as we go forward. 

MATTHEWS:  Does it bother you as the speaker of the House, the chief Constitutional officer, the only one really in the Congress, that every time you have a bill of a historic importance, you have to woo, person to person, individually, a handful of Republican senators who then get more power than practically the entire House of Representatives in designing these bills?  They can say no to—this time around, three Republican senators said, well, this is in and that‘s out and we might not vote for this unless it goes our way in conference.  They actually said that the other day; if the conference doesn‘t go the way they wanted, they weren‘t going to vote for the final. 

PELOSI:  But you have to remember the fundamentals.  They are still in place.  Those fundamentals were written in the House of Representatives.  So we‘re talking about an eighth of the bill that was in play.  And you expect that in the House/Senate negotiations that there will be some differences of opinion.  But remember, the base of the bill was written in the House, with the president and with the senators.  We didn‘t write this on our own and send it to them.  We wrote it together, had a great deal of agreement along the way, and invited the Republican input.  And some of their suggestions were in the bill and some are not.

In the interest of bipartisanship, we wanted to invite them to have their time, whether it‘s in committee or on the floor, to make their suggestion.  But we are not going, in the spirit of bipartisanship, down the path that got us here in the first place, the failed Bush economic policy. 

So we‘ll work with the Democrats and Republicans, House and Senate, to get the biggest vote we can, but not the lowest common denominator and not taking us in the opposite direction of the new direction that we need to recover in our economy. 

MATTHEWS:  You must have noticed that you‘re in the target zone right now. 

PELOSI:  Yes, always. 

MATTHEWS:  The Republicans—well, the play callers, the political guys, decided they can‘t beat Barack Obama right now.  His numbers are too high.  So they have to go after you.  Have you noticed? 

PELOSI:  I‘m used to that.  I‘ve been through it now one, two, three elections, you know.  I‘ve noticed.  I noticed a bit.  But I think it just shows the poverty of their ideas.  They really cannot prevail.  The election told them we want to take the country in a new direction.  They‘re still wedded to their old ideas.  We hope that we can find common ground with them.  But I‘m in the arena.  I love it.  If I were not effective, they would not be coming after me.

MATTHEWS:  In that spirit, I want to give you a score card. 

PELOSI:  All right. 

MATTHEWS:  You tell me if it‘s fair.  You have turned the economy around by next November, the 2010 election for Congress, the next Congressional election.  You will have turned the economy around.  It will be clear that the Congressional action on this big recovery bill worked, that the unemployment rate has stopped going up, that things are turning around.  You will have by then a serious health bill for national health insurance.  You‘ll have energy legislation passed.  You‘ll have education passed.  Is that a fair score card by next Congressional election, that you as speaker can deliver on all those four issues?  Economic turn-around, energy, education, and health; can do you it all and come to the people and say, we did what we said we could do? 

PELOSI:  We will make very serious progress in all of those areas.  Whether the—I think that we will be able to do those things.  That‘s what we set out to do.  We‘ll work together to try to achieve that. 

MATTHEWS:  So that‘s a fair score card? 

PELOSI:  That‘s a fair score card.  And it‘s not just what has passed or this or that.  It‘s how far down the road are you on these issues?  In other words, we passed a very big, historic energy bill under President Bush.  It didn‘t do everything we wanted to do, but that didn‘t mean it wasn‘t great.  We‘ll pass another energy bill—and energy, health, economy—what was your fourth? 

MATTHEWS:  Education. 

PELOSI:  Education for sure. 


MATTHEWS:  That is Nancy Pelosi, the speaker of the House, agreed to that score card.  She has to make serious progress on the economy, energy, health, education.  And she charged the Republican party, her opposition, with having a poverty of ideas.  I think that‘s the news.  When we return, we‘re going to talk about what she had to say and how she impacted the Republican critics.  Plus the big bombshell here tonight, once again, the news gods have come through again with manna.  Look at this, Judd Gregg, out of nowhere, has said he is philosophically incompatible with this administration and has walked from the cabinet just a couple weeks into the administration.  This is HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  Time for the politics fix.  David Sanger is chief Washington correspondent for the “New York Times” and author of “The Inheritance,” a great new book on the “New York Times” best seller list about what Obama inherited from Bush, President Bush.  Margaret Carlson is a columnist for “Bloomberg.” 

Let me ask you both—we got to go to this before we go to Nancy Pelosi, Judd Gregg; could this be one of those nice moments almost out of a novel, like “Advise and Consent,” where the guy, in this case, says, you know, I just don‘t philosophically agree with this administration.  They‘re liberals.  I‘m a conservative.  I made a mistake.  I shouldn‘t be on this team. 

DAVID SANGER, “THE NEW YORK TIMES”:  He seemed sincere to me.  He seemed to be to me saying that he had gone out there, examined exactly what their economic positions were, and he couldn‘t vote for them.  In fact, he didn‘t vote for them. 

MATTHEWS:  And he couldn‘t sell them. 

SANGER:  And he couldn‘t sell them. 

MATTHEWS:  Ron Brownstein said, Margaret, he said he couldn‘t go into a Chamber of Commerce meeting and say, I just love this stimulus package.  I just love this weird way they have of counting people in the census, where they imagine people.  It looks crowded on this block, let‘s give them 10,000 people.  He wasn‘t going to do that. 

MARGARET CARLSON, “BLOOMBERG”:  Every once in a while, rarely, you get a moment of candor in public by a politician.  I think we just saw one. 

MATTHEWS:  Except for one point. 

CARLSON:  Which point? 

MATTHEWS:  I think he‘s running again.  I think when he said probably not—

CARLSON:  He left himself wiggle room. 

MATTHEWS:  Bonnie Newman has to get a job. 

CARLSON:  Yes.  She‘s the big loser.  That was her only chance and it‘s now gone. 

MATTHEWS:  So whose fault?  Is this a no fault divorce?  It doesn‘t seem like he wants to blame.  But the White House is putting out the word pretty tough.  Robert Gibbs putting out, sticking to this guy on his way out the door.  Don‘t let the door slam behind you.  Once it became clear, after his nomination, that Senator Gregg was not going to be supporting some of President Obama‘s key economic policies, it became necessary for Senator Gregg and the Obama administration to part ways, like they had a deal, like somebody said you better get out of here if you‘re not going to play ball? 

SANGER:  I thought this was an interesting take on team of rivals part two, because part one team of rivals was we want dissenting opinion.  Part two, out of this, was we want dissenting opinion as long as you don‘t dissent from our positions or can‘t live with them.  I think it tells you that there are limits to the bipartisanship they can have in the cabinet. 

MATTHEWS:  What did they expect?  I mean, Norm Mineta went in under the administration of George W. Bush and he had a ministerial role.  He had transportation.  You take a particular job and you do it really well and he did it really well, right?  But you don‘t get involved in the general sharing of philosophy.  Norm Mineta never had to go out and give a speech for Bush‘s economic policy. 

CARLSON:  There are very few philosophical issues at the Transportation Department, other than are you for cars or mass transportation? 

MATTHEWS:  Right.  Remember what John Lindsay said?  There‘s no Republican way to collect garbage.  I always liked that line. 

CARLSON:  Yes.  By the way, can I say that I also work for “The Week,” so I don‘t get in trouble with my other employer?  It turned out he was going to be a potted plant.  If he was going to do anything, he was not going to be able to do anything he truly believed in.  You said a divorce.  There was—like it‘s a breaking of an engagement words in that statement, which is, you know, as time went on and the marriage got closer, I saw that we had big differences. 

SANGER:  Chris, the comparative to think here is Bob Gates, the Defense Secretary.  Here‘s somebody who worked for George Bush, but philosophically was much more in line with Obama. 


SANGER:  And it became clear. 

MATTHEWS:  Clark Clifford, wherever you go, that‘s where you‘re going to be.  David Sanger, Margaret Carlson, we‘ll be right back at 7:00 Eastern for a live edition of HARDBALL.  Lots breaking tonight.  Right now, it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.



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