updated 2/19/2009 12:33:51 PM ET 2009-02-19T17:33:51

Guest: Rep. Gregory Meeks, Rep. Dan Lungren, Steve McMahon, Todd Harris,

Steve McMahon, Joan Walsh, Todd Harris, Michael Smerconish

High: President Obama announces measures to ease the home foreclosure crisis.  Who‘s leading the Republicans now?

CHRIS MATTHEWS, HOST:  Saving the house.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight: I‘m from the government and I‘m here to help you.  Today, President Obama told us he will solve the housing problem.  He will end the horror story that has scared the American economy stiff.  He‘ll do it two ways.  He‘ll subsidize the interest rates on people who can‘t make enough money to pay their mortgages, and he‘ll cut the size of the mortgage where it‘s more than the value of the house.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  This plan will not save every home, but it will give millions of families resigned to financial ruin a chance to rebuild.

(END VIDEO CLIP)

MATTHEWS:  Like everything else, it‘s going to cost a lot of money.  Right now, the price tag is $75 billion to help as many as nine million home owners deal with their mortgage problems.  Republicans, who knocked President Obama for not acting on housing just two weeks ago, are now knocking him for what he‘s doing.  Let‘s hear from both sides tonight, a congressman who backs the mortgage rescue plan announced today and a Republican who doesn‘t.

The president seems to be everywhere these days—Denver yesterday, Arizona today, Ottawa, Canada, tomorrow.  Barack Obama is dominating this scene, sort of like Franklin Roosevelt did back in the early 1930s.  So where are the Republicans?  Are they satisfied with being the “Just say no” party?  Again, let‘s hear from both sides.

Now to the war against the country‘s enemies.  Is the president doing what he promised to do with foreign prisoners?  Is he even thinking about that dirty practice called rendition, where he jets some prisoner off to a country where we know they‘re going to get tortured?  Take a look at this headline from today‘s “New York Times.”  “Obama‘s war on terror may resemble Bush‘s in some areas.”  Is that a fair headline?  I wonder.

But what‘s this about asking for additional authority for tough questioning in extreme cases?  Is President Obama going back on his word?  That‘s the hot debate tonight, and it‘s a hot one.

And speaking of hot debates, here‘s the cartoon that ran in the infamous page six of today‘s “New York Post.”  It shows two police officers, as you can see, who have just shot a chimpanzee dead—a chimpanzee.  One of the policemen now says, “They‘ll have to find someone else to write the next stimulus bill.”  What do you think of that?  I know what I think.  We‘ll talk about that in the “Politics Fix” tonight.

And finally, tonight, I declare the latest, most prominent winner of the HARDBALL award.  Wait until you hear who it is.

We begin with President Obama‘s housing plan, which would help nine million home owners who either bought more than they could afford or whose houses are now worth less than they owe.  With us now, Democratic congressman Gregory Meeks of New York and Republican congressman Dan Lungren of California.

I want to start with an advocate for this plan.  Congressman Meeks, give us the pluses.

REP. GREGORY MEEKS (D), NEW YORK:  Well, the pluses are that we‘re going to save Americans.  We‘re going to keep Americans in their homes.  We‘re going to stop the continuing falling of the value of property because it affects everyone when property value goes down.  We‘re going to regain confidence in the real estate industry.  And we‘re going to be able to make Americans whole again and we‘re going to be able to push ourselves out of this economy.

It‘s a combination of both the stimulus package, as well as now the mortgage mitigation package, that‘s going in to help at least four million home owners.  That is the way that we need to go.  And we‘re making sure that we‘re taking care of those individuals who have been doing the right thing, those who have been trying to pay their mortgages, but because now that the value of their homes have fallen below what they, in fact...

MATTHEWS:  Right.

MEEKS:  ... were, we‘re going to try to make them whole again.

MATTHEWS:  Well, that is the problem we keep hearing about, Congressman Lungren.  The big problem is that people in California and elsewhere bought homes for, say, $500,000 and the house is now worth $300,000, but they‘re stuck with a $500,000 mortgage.  This deals with that problem.  What‘s your thinking?

REP. DAN LUNGREN ®, CALIFORNIA:  Well, I think that the president has presented a package for us to consider.  There are some parts of it that I think we can work on.  One area I disagree with is to allow bankruptcy judges to cram down or push down the principal, basically changing the contract.  And I don‘t think that makes good sense because that‘s going to affect the future mortgages because that‘s going to put an additional risk premium on all mortgages.  If someone who‘s going to lend knows that at some point in time, on your own home, a bankruptcy judge can say, well, We don‘t like what the principal is, we are going to unilaterally pull that down.

On the other hand, it seems to me, if there is a place for government intervention, it may be very well in the circumstances outlined in part of the president‘s plan with respect to those who are...

MATTHEWS:  OK...

LUNGREN:  ... upside-down through no fault of their own, did not cheat or make fraudulent statements when they came forward.  And the one thing I would say—I might add there is if we help these people out, is there a way for the government to recoup that help later on, if they then sell the house after it has retained its value...

MATTHEWS:  OK...

LUNGREN:  ... or resumed its value?

MATTHEWS:  Let‘s talk cases here.  Suppose you buy a house for $500,000, California, somewhere else in the country.  The house value‘s gone down to $300,000.  It‘s an extreme case, but it happens.  In fact, it‘s not so extreme.  It‘s fairly normal right now.  You owe a mortgage of $500,000.  The government wants to come in and help you subsidize that by bringing the real value of that mortgage down to about $300,000, which is the value of the house.  You‘re against that, Congressman.  You don‘t like that plan.  You call that going after the bankruptcy judge and forcing them to do something they don‘t want to do.

LUNGREN:  Well, in that part, I do disagree because that is called the cramdown authority.  And I think that so distorts the market that it‘s going to make it more difficult for mortgages in the future.  However...

MATTHEWS:  Yes, but what‘s going to happen...

(CROSSTALK)

MATTHEWS:  Nobody is—nobody‘s going to pay off a mortgage of $500,000 if the house is only worth $300,000.  They‘re going to walk and leave the banker with a piece of property that‘s been let go.  They‘re going to have to try to sell it, fix it up again.  They‘re going to be worse off than they would be if you gave this guy a break, wouldn‘t they?

LUNGREN:  I understand what you‘re saying, Chris.  And those are tough circumstances.  If you look at what the president‘s other part of his plan is, it will allow you to renegotiate your loan at a lower percentage as long as that difference is not more than 5 percent—in other words, as long as the principal is not more than 105 percent of the true value of the house at the present time.  That, I think, we can justify.

In those other circumstances, not only are you going to upset the market so much that in taking that enormous loss, those banks in the future are going to be very reluctant...

MATTHEWS:  OK...

LUNGREN:  ... to lend to you and to me and to anybody else or even those people who are in trouble now, or we are going to pay such a significantly higher premium that it‘s going to cost across the board.

MATTHEWS:  OK.  But are you being realistic?  You know the housing market in California.  Nobody‘s house has only depreciated 5 percent.

LUNGREN:  Well, what I said is...

MATTHEWS:  Come on!  Name a person whose house has only—my house has gone down a lot more than 5 percent.  Everybody I know has gone down more than 5 percent.  Who in the world has their house value only gone down 5 percent?

LUNGREN:  Well, then you better ask the president why he has that proposal brought forth.  In most cases, people have not had a mortgage that‘s 100 percent of the purchase price of the house.

MATTHEWS:  Right.  OK.

LUNGREN:  In many of those circumstances...

MEEKS:  I think it‘s clear, Chris...

LUNGREN:  ... we‘re talking about are people...

MATTHEWS:  OK, Congressman...

LUNGREN:  ... that actually had a down payment of some significance. 

But that‘s what the outlines of the president‘s plan are.

MEEKS:  I think it‘s clear in the president‘s...

MATTHEWS:  OK.  Congressman Meeks, get in here.  Go ahead.

MEEKS:  I think the president said he realizes that everybody‘s not going to be saved.  It‘s March 4th, we‘re going to find out what the guidelines are to find out who‘s eligible to get in this program.  However, we know that there are certain people, through no fault of their own, now are on the verge of losing their homes.  And we‘re going to check to make sure that they have the economic capacity to continue with the reduced rates.

MATTHEWS:  OK.

MEEKS:  I‘m doing that right now in my district every day with individuals who are coming in and working with banks.  And I think that there‘s an incentive for the banks, and that‘s what the reversing the bankruptcy code will do.  It gives them further incentive to say, We‘re going to renegotiate this mortgage because we don‘t want to push it—have it pushed down.  But sometimes, there‘s carrots and there‘s sticks, and that‘s what‘s in the president‘s plan.  (INAUDIBLE) both carrots and sticks to try to get everybody at the table together to work out something meaningful...

MATTHEWS:  Right.

MEEKS:  ... so that the American public can also have a hand up.

MATTHEWS:  Well, the point is, a lot of Republicans, Congressman Lungren, were right in saying that—I think were right in saying that the president‘s initial stimulus package didn‘t have anything for housing.  Now he‘s moved expeditiously to do something on housing.  Does he get any points for that or not?

LUNGREN:  Oh, absolutely.  I think you‘ll see the statement from John Boehner, our leader, who congratulated the president on taking the first step, but indicated that we wanted to be a part of the solution.

MATTHEWS:  Yes, I think you should be.

LUNGREN:  And that is, we want to be brought into it to discuss exactly what the circumstances are.  And my suggestion that if we‘re going to benefit people who find themselves in difficult circumstances now by putting the American taxpayer at risk...

MATTHEWS:  Right.

LUNGREN:  ... and paying something, is there a way that we can recover when the economy recovers and the value of the property goes up and that individual sells in the future?  That seems to be kind of a fair thing...

MATTHEWS:  OK...

(CROSSTALK)

MATTHEWS:  Let me—gentlemen, I have to go on.  I have to ask you about this “New York Post” page six cartoon that ran today in “The New York Post,” one of the biggest papers in New York, certainly.  Two policemen just shot a chimpanzee dead, and one of them says to the other—this is a police officer—“They‘ll have to find someone else to write the next stimulus bill.”  Congressman Meeks, what do you make of that cartoon?

MEEKS:  I find it very offensive and horrific to utilize that cartoon.  I have no idea what at least the editors of “The New York Post” and others who should review those cartoons before they are publicated—published—what they possibly could have been thinking about, to try to equate the killing of a chimpanzee, which we know took place, but then to add the fact that now we‘re going to have another stimulus—someone else to do the stimulus—and historically here in America, they have always tried to equate chimpanzees with African-Americans.

MATTHEWS:  Yes.

MEEKS:  I think it‘s absolutely offensive.  And I think that the editor of “The New York Post” and the cartoon artist have a lot of explaining to do.

MATTHEWS:  Do you think, Congressman Lungren, that “The New York Post” is calling the president of the United States a chimp?

LUNGREN:  Well, if that‘s the intent of that particular editorial cartoon, it is more than offensive.  If...

MATTHEWS:  What do you think it was?

LUNGREN:  If they‘re aiming it at the Congress, I would accept that.  I think we did a bad job with it.  But if they are aiming it at the president, it is offensive and should not have seen the light of day.

MATTHEWS:  OK.  Well, that was carefully answered.  Thank you very much, Congressman Lungren, Congressman Meeks.  I‘m with you, Congressman Meeks.

Here‘s part of the reaction of Barbara Ciara, the president of the National Association of Black Journalists.  “To compare the nation‘s first African-American commander-in-chief to a dead chimpanzee is nothing short of racist drivel.”

Thank you, Congressman Meeks.  Thank you, Congressman Lungren.  It‘s great having you on the show.

MEEKS:  Thank you.

MATTHEWS:  It was a great debate.

Coming up: With Obama on the road and on the move, is he overshadowing Republicans?  And by the way, who‘s the leader of the Republicans?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Sean Hannity had a great line about the press conference.  He said, This is change we can believe in?  Not if you ask me.

(LAUGHTER)

UNIDENTIFIED FEMALE:  That‘s hilarious!

UNIDENTIFIED MALE:  That‘s a great line.

UNIDENTIFIED MALE:  Hannity‘s brilliant.

UNIDENTIFIED MALE:  Yes.

UNIDENTIFIED MALE:  Smartest man in America.

UNIDENTIFIED MALE:  No, wait a minute.  Sean Hannity‘s the smartest man in America?

UNIDENTIFIED MALE:  In my opinion, yes.

UNIDENTIFIED MALE:  Smarter than Rush?

UNIDENTIFIED MALE:  I think he‘s as smart as Rush.

UNIDENTIFIED MALE:  No, that‘s idiotic.  No!  No one is as smart as Rush Limbaugh.  No one!  You need to take that back.

UNIDENTIFIED MALE:  Hey, a man‘s entitled to his opinion.

UNIDENTIFIED MALE:  I‘m sorry, John.  No.  Some things are just beyond the pale.

(END VIDEO CLIP)

MATTHEWS:  “Saturday Night Live” at its absolute best.  Welcome back to HARDBALL.  As President Obama has been criss-crossing the country selling his plan for the economy, today with his big bill on housing, the other day signing the bill—yesterday, in fact—the big stimulus bill, where are the Republicans hiding?  And by the way, who‘s the boss—who‘s the boss of the party?

Let‘s go here—who is it?  Is it House minority leader John Boehner, Senate minority leader Mitch McConnell?  It‘s an exciting crowd here.  Is it GOP chairman Michael Steele?  Is it Sarah Palin?  She‘s getting some bad ink lately.  Is it Rush Limbaugh?  Is “SNL” right?

With me, the strategists Todd Harris—he‘s a Republican, I don‘t think he‘s a RINO, either—and Steve McMahon.

TODD HARRIS, REPUBLICAN STRATEGIST:  The real deal.

MATTHEWS:  That joke, which was that we wouldn‘t want to speak anything unfavorably...

HARRIS:  Thou shalt not speak ill of  Limbaugh.

MATTHEWS:  ... of our guy, the oracle of Thebes, you know, the great oracle of Delphi, rather—is he that big in your world?

HARRIS:  He...

MATTHEWS:  I mean, really, do you look up to him as the smartest person in America?

HARRIS:  I don‘t know.

MATTHEWS:  You personally, Todd Harris?

HARRIS:  No.  I don‘t think he‘s (INAUDIBLE)

MATTHEWS:  You don‘t?  Do your confreres?

HARRIS:  I‘m sorry?

MATTHEWS:  Do your confreres, your colleagues in the Republican Party look up to him as a great thought person?

HARRIS:  Yes, a lot of people do.  A lot of people...

MATTHEWS:  A deep thinker.

HARRIS:  Yes.  And...

MATTHEWS:  OK.

HARRIS:  Sure.  And he—look, he is the intellectual lightning bolt of a lot of people on the conservative side and a motivator.  And he directly can turn out people to the polls, and because of that, he‘s very powerful.

MATTHEWS:  Would you live in a country where he wrote the constitution?

HARRIS:  I don‘t know.

MATTHEWS:  Would you live in such a country?

HARRIS:  I‘m happy to live in this country.

MATTHEWS:  Would you live in a country where he wrote our rights, he listed our rights?

(CROSSTALK)

MATTHEWS:  ... would you live in that country?

HARRIS:  ... because I want to make this point.  He is no more powerful or influential in the Republican Party than the labor unions...

MATTHEWS:  Oh, here we go.  Oh!

HARRIS:  ... Moveon, SIEU is...

MATTHEWS:  This is...

HARRIS:  ... on the Democratic side.

MATTHEWS:  I expect more of you, Todd, than “So‘s your old man” kind of argument.  In other words, You guys have idiots, too...

(CROSSTALK)

(LAUGHTER)

MATTHEWS:  Who doesn‘t—Andy Stern and Rush Limbaugh, about the same?

HARRIS:  Andy Stern,

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  If anybody‘s wondering who “Saturday Night Live” is going to make fun of now that Sarah Palin‘s back in Alaska, I think they‘ve answered that question.

MATTHEWS:  Rush.

MCMAHON:  They‘re going to make fun of...

MATTHEWS:  Boehner.

MCMAHON:  ... the Republican leadership.  And the Republican leadership is caught in a position between the American people and what the American people want—they want less partnership, they want more cooperation, they want them to work with President Obama—and what Rush Limbaugh wants, which is for Barack Obama to fail.  And so they‘re sort of caught in between.  They‘re, like, What do we do...

MATTHEWS:  He said that, by the way.

MCMAHON:  ... do we—he did say that.

(CROSSTALK)

MATTHEWS:  Is he a sacred cow?

HARRIS:  Limbaugh?

MATTHEWS:  Yes.  In other words, do you dare not speak evil of him if you‘re a Republican?

HARRIS:  I think if you are an elected Republican, it makes your life very difficult if you speak ill of Rush Limbaugh.

(LAUGHTER)

HARRIS:  Yes, he—Limbaugh—he has a lot of support.

MCMAHON:  Or if you‘re a commentator on HARDBALL.

MATTHEWS:  But you‘re not afraid to take him on, are you?

HARRIS:  Oh, yes, no, I‘m going to go...

MATTHEWS:  Say something nasty about Rush Limbaugh.

HARRIS:  I could probably beat him at arm wrestling.

MATTHEWS:  OK.  You chicken!

(LAUGHTER)

(CROSSTALK)

HARRIS:  All right, bash the unions, Steve.

MATTHEWS:  OK, I want you to answer this question first, then you can take potshots in a minute.  Who, Todd Harris, should we look to for the intellectual leadership of the Republican Party?  In other words, if you can only get one guest to sit in that chair to tell us what‘s the Republican Party stand for in 2009.

HARRIS:  Well, there isn‘t one person.  It‘s going to depend on what the issue is.  That‘s one of the problems with not having the...

MATTHEWS:  The economy.

HARRIS:  ... bully pulpit.

MATTHEWS:  The economy.  That issue.  Give me...

HARRIS:  I would say over the last two weeks, you‘ve got to look at someone like Eric Cantor, who really—you know, as the Republican whip in the House was able to marshal zero, make sure that no Republicans...

MATTHEWS:  You‘re reaching back in that bench a little, aren‘t you?

HARRIS:  No.  Look, I think anyone who underestimates Cantor‘s influence...

MATTHEWS:  Oh, no, I think it‘s growing, but I do think you‘re reaching back in the bench.

MCMAHON:  The smartest person in the Republican Party, without any argument, I think, from Todd or anybody, is Newt Gingrich.  And he‘s thoughtful.

MATTHEWS:  He‘s likable, too.

MCMAHON:  He‘s articulate.  Well, he may not be as likable as some of the other members of the Republican Party.  Eric Cantor...

HARRIS:  I think he says the same about you!

MCMAHON:  Let me tell you something.  You can disagree...

MATTHEWS:  What?  Are you being mean?

HARRIS:  No.

MATTHEWS:  I‘m as unlikable as—as—never mind.

MCMAHON:  You can disagree...

MATTHEWS:  I don‘t want to ask the question, I‘ll get the wrong answer!

(LAUGHTER)

MCMAHON:  You can disagree with everything that Newt Gingrich proposes for the country, and I disagree with much of it, but you cannot argue that the man isn‘t thoughtful and doesn‘t have a point of view that‘s based on principles that are immutable.

MATTHEWS:  But doesn‘t he want to blow up the world?

MCMAHON:  No, he doesn‘t want to blow up the world.  I mean, not anymore than George Bush or any of the Republicans that just left town.

MATTHEWS:  I meant politically, in the sense he likes Armageddon struggles.

MCMAHON:  Here‘s what he likes...

(CROSSTALK)

MCMAHON:  Here‘s what he likes.  He likes aggressive, rapid change. 

He likes transformational change.

MATTHEWS:  Yes.

MCMAHON:  And you know what?

HARRIS:  He liked being a revolutionary.

MCMAHON:  President Obama—President Obama, in his own way, is a Democratic version of Newt Gingrich.  His programs are very well thought out.  They‘re transformational.  But they‘re historic kinds of change.

MATTHEWS:  I‘m getting a little worried about Barack Obama, in this sense.  And I want you to respond to it.  I think people don‘t mind somebody they disagree with.  They fight with that person.  That‘s how politics works.  What troubles us is the sense of indecision.  Do you have a sense he has a firm hand on the tiller right now?  He knows what he‘s going to do about the banking situation, which scares the heck out of me, the fact that banks don‘t lend money—that can cripple the economic system of our country in the next several months.  Does he have a plan there?  Do you sense it?

TODD HARRIS, REPUBLICAN STRATEGIST:  I don‘t sense a plan, whether it‘s on the banking system, whether it‘s this new housing proposal, whether it‘s this announcement that 17,000 new troops are going to Afghanistan, but no one is really sure what they are going to be doing. 

MATTHEWS:  You sense indecision?

HARRIS:  Yes. 

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  I don‘t sense indecision. 

Here‘s what I sense.  I sense a president who really wants to work with the Republicans and would like the Republicans to come along, but a president who is aware that, if the Republicans don‘t come, he can pass his program without them.  You saw that on the stimulus bill. 

MATTHEWS:  OK. 

MCMAHON:  He would have preferred the Republicans come...

MATTHEWS:  If there weren‘t any Republicans on this planet right now, would Barack Obama know what to do with the banking crisis right now...

MCMAHON:  I think...

MATTHEWS:  ... the inability of people to borrow money for anything? 

MCMAHON:  I think that what Barack Obama has done...

MATTHEWS:  Could he answer the question?  Could he?  Could he?

MCMAHON:  Well, I think—I—I don‘t know that anyone could without...

MATTHEWS:  But he‘s our leader. 

MCMAHON:  No, hold on. 

He brings together experts in the field, and gets their advice, and seeks their opinion.  And, at some point, he has to make a decision.  I think he‘s as capable...

MATTHEWS:  So, he‘s undecided right now? 

MCMAHON:  No, I think he‘s as capable of doing that as anybody.  And I think he‘s as thoughtful...

MATTHEWS:  When will he make a decision about how to solve the banking crisis?  When you do you think that will come?

MCMAHON:  Well, I think that—I think that they have got a lot of

ideas that they are floating around.  And they have got a lot of smart

people

MATTHEWS:  It scares me.

MCMAHON:  It‘s scary. 

(CROSSTALK)

MATTHEWS:  You agree that he‘s undecided right now? 

HARRIS:  I think so.

MATTHEWS:  Fairly or not, he‘s undecided?

HARRIS:  And—and I want to disagree with one of the things that Steve said, not surprisingly.

If President Obama had really wanted to work with Republicans on this stimulus bill, he wouldn‘t have outsourced its writing to Nancy Pelosi and Harry Reid.  They would have sat down at the White House and pounded it out with Republicans and Democrats at the table, instead of trying to force this massive spending bill down the throats of congressional Republicans, and, then, when Republicans don‘t want to swallow it, say, oh, well, that‘s not bipartisan. 

(CROSSTALK)

MATTHEWS:  Can you speak with authority that they would have gone along with a deal? 

MCMAHON:  No.

HARRIS:  I think, if you had brought...

(CROSSTALK)

MATTHEWS:  No, I‘m talking about the top people.  Do you think they are open to being part of a—a big stimulus package with him, ever were? 

HARRIS:  Republicans were always open for it. 

In fact, Republicans put out our own stimulus package, which had half the price tag, but it was still $400 billion, $450 billion. 

MATTHEWS:  I‘m not sure your party has decided whether—whether to oppose down the line or try to get the best deal.  I‘m not sure you have decided.

MCMAHON:  They‘re going to oppose down the line.  They‘re going to

oppose down the line

Let‘s take a look at what Barack Obama did.  Sure, the bill was written initially by the Democratic leadership in the House and Senate.  But he went to—he went up to the Hill two or three times, sought the Republicans‘ advice.  They took out things, like school construction and unemployment benefits, the Republicans didn‘t want.

They put in a ton of business tax credits.  And then the Republicans said, thank you for doing that.  We‘re walking away. 

MATTHEWS:  How about Johnny Isakson, that senator from the South, who said, do all this stuff for cars and everything?  Remember the car deal, the $5,000 car credit?  And then he wouldn‘t vote for the bill after he got what he wanted.  What was he up to?

(CROSSTALK)

HARRIS:  Well, just because there‘s one thing in the bill that you want and a billion that you don‘t want, makes it a tough pill to swallow. 

MCMAHON:  They should have pulled it out. 

MATTHEWS:  A trillion. 

MCMAHON:  They should have pulled it out. 

HARRIS:  A trillion—almost a trillion, yes.

MATTHEWS:  We will be right back.

MCMAHON:  They should have pulled it out. 

MATTHEWS:  But I think you‘re wrong.

(LAUGHTER)

MATTHEWS:  Anyway, Steve McMahon—but you‘re right about indecision. 

He‘s undecided on the banking bill. 

And you admitted it here.  We have got it on the tape. 

MCMAHON:  I didn‘t admit anything.

MATTHEWS:  You have got to—he‘s getting around to it.  We got on the tape Steve McMahon admits that Barack Obama has not come up with a brilliant banking solution.  And that‘s a big problem.  Todd Harris is right on this one. 

Up next, I have a new winner in the HARDBALL Award tonight, a big one, a heavyweight, after this break. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL. 

This is going to be great.  As you know, I have been giving out the HARDBALL Award.  And one candidate just leapt into stage—onto the stage this week.  And I mean the world stage. 

Secretary of State Hillary Clinton, she deserves and wins the award, our fifth, and the first to go to a woman, for displaying the arts and science of smart human behavior.  They are—to remind you—personal moxie, savvy, basic street smarts, knowing the world you are in, knowing what you have to do, and doing it. 

That‘s what makes a HARDBALL Award winner.  I said it at the time.  I loved Hillary Clinton‘s speech at the Democratic Convention last summer. 

Let‘s take a look back. 

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE:  Whether you voted for me or you voted for Barack...

(CHEERING AND APPLAUSE) 

CLINTON:  ... the time is now to unite as a single party with a single purpose. 

(CHEERING AND APPLAUSE) 

CLINTON:  We are on the same team.  And none of us can afford to sit on the sidelines. 

(END VIDEO CLIP)

MATTHEWS:  Well, let‘s face it.  Secretary of State Hillary Clinton has not been sitting on the bench.  She‘s been out there on the field, getting the Obama foreign policy into shape. 

Look at the team she‘s got, George Mitchell on the Middle East—he‘s the guy who brought peace to Northern Ireland—Richard Holbrooke on the Pakistan/Afghanistan border.  He‘s the guy who brought about the Dayton accords on Bosnia. 

No more letting the world drift toward chaos and no more division in the Democratic Party.  Strike up both those developments to our new secretary of state.

Today, in Indonesia, Hillary even took a line out of Obama‘s book, literally, to deliver on his promise to build bridges to the Muslim world. 

(BEGIN VIDEO CLIP)

CLINTON:  I bring greetings from President Obama who has, himself, said and written about the importance of his time here in Indonesia as a young boy. 

It gave him an insight into not only this diverse and vibrant culture, but the capacity for people of different backgrounds to live harmoniously together.  And it is no accident that, on my first trip as secretary of state, I come to this country. 

(END VIDEO CLIP)

MATTHEWS:  Well, part of this award today is long overdue.  I never gave Hillary Clinton credit for the guts it took for her to run for the U.S. Senate.  She faced possible humiliation at the hands of her critics, and she faced down that humiliation.  That—take my word for it—takes real savvy. 

So, to Secretary of State Hillary Clinton today, we‘re proud to present the HARDBALL Award for grace under fire, personal moxie, for courage, and for a bit of timely humility, for—most of all, for a willingness to serve our country, over self. 

We salute you.  I salute you. 

Up next:  Is President Obama embracing some anti-terror tactics left over from the Bush administration?  Couldn‘t be a hotter topic.  It‘s coming up here on HARDBALL. 

(COMMERCIAL BREAK)

JULIA BOORSTIN, CNBC CORRESPONDENT:  I‘m Julia Boorstin with your CNBC “Market Wrap.”

A late-afternoon rally capping a yo-yo session, with markets finishing flat overall.  The Dow gained just three points, the S&P 500 down less than a point, and the Nasdaq fell about three points. 

Hurt by a broad advertising downturn, CBS is slashing its dividend 81 percent, from 27 cents a share, to just 5 cents, after reporting its fourth-quarter profits plunged 52 percent from one year ago. 

The Commerce Department reported big declines in new housing starts in all parts of the country today—applications for building permits also falling to a record low.  That‘s bad news for homebuilders, but it could help thin a current backlog of unsold homes. 

And the Fed slashed its outlook for 2009, forecasting continuing instability in the housing market, and projecting, unemployment could rise to more than 8.5 percent. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

President Obama may be on the road to banning torture, closing Guantanamo, and shutting down secret CIA prisons overseas, but he‘s also apparently quietly supporting some Bush anti-terror policies. 

The president‘s CIA director, Leon Panetta, said the CIA will likely continue to transfer detainees to other countries through its—here‘s the horrible word—rendition program.  He also said, if approved interrogation techniques were not sufficient in extracting information from a terrorist suspect about an imminent attack, he would ask for additional authority, which means, perhaps, water-boarding. 

And President Obama‘s nominee for solicitor general said, terrorism suspects should be held indefinitely without a trial. 

So, is President Obama living up to his pledges when he ran for office? 

Michael Smerconish is an MSNBC political analyst and radio talk show host.  And Joan Walsh, of course, is editor in chief of Salon.

I want to talk with Michael Smerconish, because I‘m not sure where you stand. 

It sounds like he‘s going to close Gitmo.  He‘s going to get rid of water-boarding as a normal technique.  He‘s going to arrow the definition of what we accept as—as—as torture.  And he‘s going to get rid of a lot of bad things, like overseas CIA detention centers that we‘re not supposed to know about. 

But he‘s apparently—According to the testimony we have gotten from Leon Panetta and others, he is going to consider, as an option, rendition.  He is going to consider, as an option, additional authority when it comes to squeezing prisoners, using harsher techniques of interrogation. 

Is he slipping back into the dirty old ways?  Well, maybe they are the ways you like, Michael. 

MICHAEL SMERCONISH, MSNBC POLITICAL ANALYST:  Well, yes, I‘m not prepared to concede that—that he‘s ending these, as you put them, unpleasant or bad practices. 

I—I think, Chris, that he‘s being practical.  You know, it was—it was Vice President Cheney who, upon leaving office—and I know you love it when I quote him—said that...

(LAUGHTER)

SMERCONISH:  ... his hope was that President Obama would come into office, would put aside all the campaign rhetoric, would assess the situation, be briefed, make determinations as to what had worked and why, and reevaluate—reevaluate the approach to the war on terror. 

And my hunch is that that‘s what‘s taking place.  This rendition program has existed for decades and exists for good reasons.  And the bottom line is that these terrorists don‘t fit neatly into the model of a conventional criminal defendant, nor of—of someone in a World War II or battlefield scenario. 

They aren‘t entitled to the Geneva Convention, and I don‘t think we want to Mirandize Khalid Sheikh Mohammed. 

MATTHEWS:  Do you think, if we water-boarded Scooter Libby, he would tell us the role that the vice president played in the outing of Joseph Wilson‘s wife...

(LAUGHTER)

MATTHEWS:  Do you think if...

(LAUGHTER)

MATTHEWS:  I‘m asking you a simple question, because you believe in this stuff.

Do you believe he would give us an honest answer if we water-boarded Scooter Libby as to the role his boss played in what he did and got in trouble for? 

SMERCONISH:  I believe that there must be some efficacy in water-boarding, or we would not continue to have this debate. 

MATTHEWS:  OK. 

SMERCONISH:  I don‘t—does that answer your question? 

MATTHEWS:  It does in a very abstract way.  I was hoping for something more applicable. 

Let me go to Joan Walsh. 

(LAUGHTER)

MATTHEWS:  Do you think water-boarding works in the case of—of recent political figures in this administration who are felons, disbarred, et cetera, but will not get pardons because the president will not play ball with his vice president? 

Do you think we would get...

JOAN WALSH, EDITOR IN CHIEF, SALON.COM:  I‘m very proud...

(LAUGHTER)

MATTHEWS:  ... the truth through water-boarding here at home? 

(LAUGHTER)

MATTHEWS:  Here at home, do you think it works?

WALSH:  This is—OK.  OK.  This is easy for me, Chris.  I don‘t believe in water-boarding, not even for Scooter. 

MATTHEWS:  OK. 

WALSH:  So, I‘m just...

MATTHEWS:  OK. 

WALSH:  I‘m not even going to go there.  So...

(LAUGHTER)

MATTHEWS:  OK.  Good. 

WALSH:  But, you know...

MATTHEWS:  Well, let‘s go where we have to go tonight. 

(LAUGHTER)

MATTHEWS:  In all seriousness, are you worried, as a supporter of Barack Obama, in a general sense—you like his values.

WALSH:  Yes. 

MATTHEWS:  Do you believe he may be slipping away from them, backsliding into the old ways of torture? 

WALSH:  I—I am worried.  I‘m a little bit worried. 

I would say that the Charlie Savage piece that we‘re talking about from “The New York”—“New York Times” today, awesome piece—he‘s a great reporter—there is some worrisome data in it. 

I would—I would add, though, that he is talking about possibilities.  Panetta said they may continue extraordinary rendition.  They may, at—at times, look for enhanced interrogation techniques.  Elena Kagan said they may want to continue this, what they consider battlefield law. 

If I‘m sitting in San Francisco, and I contributed, knowingly or unknowingly, to a terrorist fund, that they could...

MATTHEWS:  Yes. 

WALSH:  ... arrest me here and treat me as though they—you know, they caught me in Baghdad. 

These—these are crazy policies, in my opinion.  And they are saying they may.  So, I don‘t want to go down the road of saying they have done it and how dare they.  The two things that he did do, though, that really we should talk about and that are worrisome, he did—or the Department of Justice did jump out last week. And, in two different cases, they embraced the Bush-Cheney state secrets provision to try to block a couple of lawsuits, one having to do with wireless wiretap—warrantless wiretapping—excuse me and the other...            

MATTHEWS:  Yes. 

WALSH:  ... to block a suit by some CIA—people who were detained by the CIA. 

And, in both cases, they used the exact same Bush-Cheney provisions. 

And that is a real action.

MATTHEWS:  OK. 

WALSH:  And that‘s worrisome. 

MATTHEWS:  Michael, I worry about what we do with people who we can‘t make a criminal case against, even before a military court, but we know are dangerous. 

What do we do with those guys?  Do we rendition them?  What do we do with a person who we know has sworn to hurt us the second he gets out of our custody, but we don‘t have a military—even a military case against him, as a criminal? 

SMERCONISH:  I believe that...

MATTHEWS:  What do we do with them?

SMERCONISH:  ... everyone is entitled—I—I think everybody is entitled to a trial.  I—I‘m not comfortable, Chris, with this notion that we‘re seven years removed from September 11, and you still have 250 or so detainees at Guantanamo in a never-ending process. 

(CROSSTALK)

SMERCONISH:  They never had a plan as to how they would execute this criminal justice system.  So, I‘m not for that.

But I am for keeping more tools on the table as we approach the war on terror.  I mean, I‘m not for torture.  But if you have the ticking-time bomb case...

MATTHEWS:  OK. 

SMERCONISH:  I mean, put yourself in the position of September 10. 

What—what exactly would you like to limit us to on September 10? 

MATTHEWS:  OK.  I know.  That‘s the Dershowitz argument.  I have heard that argument.  You have got to use the thumbscrews.  And the whole question is whether it would work or not. 

I want to get back to my question, which I‘m confounded by.  I don‘t know the answer to it.  What do you do with people who are dangerous, but not criminal; they didn‘t do anything wrong, but you know they will?

Again to you, Michael, then to Joan.

What do you do with such a person?  Let him go? 

SMERCONISH:  You put them on—you put—no, you put them on trial. 

MATTHEWS:  But they haven‘t done anything wrong yet. 

SMERCONISH:  And I know the numbers are...

WALSH:  But...

SMERCONISH:  Well, but for terroristic threats. 

I think you could put them on trial for the—for the threat that you believe that they pose. 

(CROSSTALK)

MATTHEWS:  OK. 

SMERCONISH:  And if you can‘t hold them accountable, then they have got to be let go eventually. 

WALSH:  I agree with Michael. 

MATTHEWS:  OK.  OK.

Joan?

WALSH:  I mean, Michael agree—Michael and I agree on this. 

I think the other issue, you know, that we should be talking about is whether this makes us safer.  There‘s—there‘s—Michael and I disagree on this.  I look at the interrogation experts who say torture really doesn‘t work in the end. 

And then there‘s another question.  You know, I just finished Tom Ricks‘ great book “The Gamble.”  He talks about how David Petraeus and other people went into Iraq and changed the policy from being we want them to fear us to we‘re going to protect them, because they saw the way Abu Ghraib, extraordinary rendition, fathers disappearing from homes in the middle of the night was creating insurgents. 

So a lot of these Bush policies really helped create the insurgency in Iraq and around the world, because people are so horrified by the way our fabulous country is disrespecting human rights.  So I think the Obama administration is—I don‘t—I haven‘t lost hope.  I think they are looking at these things, and I hope they‘ll come back to the side of due process, finding ways to try these people.  And if they haven‘t done anything wrong, then we can‘t keep them.  We follow them around for a while. 

MATTHEWS:  Is he sliding backwards?  You don‘t know.  You are worried he might slide backwards.  And Michael, you think you might be happy if he slides back Bush land a little bit in terms of torture. 

SMERCONISH:  I think that he‘s being practical.  I think that he‘s the president now.  He‘s not a candidate.  Chris, I voted for him, too.  I voted for him because I like the smart approach to ridding the Pakistan tribal regions of al Qaeda, which I think is the most pressing issue today.  Look at what happened in the Swat Valley, the size of Delaware, an accord has been reached with the Taliban.  These are the real issues I think we need to focus on. 

MATTHEWS:  By the way, thanks for announcing your support for Barack Obama on HARDBALL, Michael Smerconish.  I enjoyed reading that part of your book.  Joan—you know what I‘m laughing about.  Joan, thank you as well.  It‘s great to have you on from “Salon.” 

Up next, calls—come on—calls for Roland Burris to resign intensify.  A couple of newspapers, the “Washington Post,” the “Chicago Tribune,” both want Burris to leave the Senate because he didn‘t give full information or accurate information in his public testimony.  This is HARDBALL and that‘s coming up next on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time for the fix.  The “Chicago Tribune‘s” front page today screamed “Burris Story Shift Gain.”  The paper‘s editors called on Senator Roland Burris to resign from the Senate.  So did the “Washington Post” call for him to resign today.  Burris‘ office put out a statement today saying—you‘ll love this.  This is his problem.  “The senator wishes to refrain from commenting any further during the current review.”  And with that, Senator Burris took the stage of the City Club in Chicago and said this. 

(BEGIN VIDEO CLIP)

SEN. ROLAND BURRIS (D), CHICAGO:  I am from Centralia.  You all know me, OK?  You all know Roland Burris.  But I have a history with you, a record that I have built over a lifetime.  Thirty years in public life and never a hint of a scandal.  And all that time in service to Illinois, I never asked for anything in return until today. 

I ask you today to stop the rush to judgment.  You know the real Roland.  I have done nothing wrong.  And I have absolutely nothing to hide. 

(END VIDEO CLIP)

MATTHEWS:  It‘s not going to stop here.  Here to make some sense of it is “New York Magazine‘s” John Heilemann and MSNBC contributor Jim Warren.  Jim, you are out there.  I have to give you the first opportunity.  He has a problem.  I now realize why criminal defense lawyers tell their clients to shut up. 

JIM WARREN, MSNBC CONTRIBUTOR:  Oh, my gosh.  Yes, we‘ve gone from, I have nothing to hide to I can‘t say anything about this, because there are pending investigations.  But let me tell you something, with the soft violin supposedly playing, I‘m reminded in looking at that performance today, and what a performance, that, Chris, this is not a bad guy.  This is not a crook, as declared last evening by a high-profile competitor of yours. 

But I was reminded, this is a goof who is in over his head.  And, yes, you know—yes, there‘s no history of corruption.  But there‘s no history of achievement either.  And now he is the lamest of ducks.  And every time I was also remembering—every time he‘s run for a really high-profile office—admittedly, first African-American to win statewide office in Illinois.  Every time he ran for a really high profile one, U.S. Senate, governor, mayor of city of Chicago, that porousness came through.  There‘s less there than meets the eye.  He can‘t handle real questioning.  Even today, he refers to a big county in Illinois as the boondocks.  I mean, oh, my god, a stupid gratuitous comment by him.  The boondocks of Will County, Illinois, just you‘ve got to shut up. 

MATTHEWS:  You are speaking with a silver tongue tonight.  Your words, they should be written down.  They are brilliant.  Your thoughts, Heilemann, because it seems to me I‘ve always been a fan of this guy‘s moxie.  He came here with an umbrella.  He stood up against the Senate leadership.  Now we find out we can‘t get a clear story as to what role he played in fund-raising for Rod Blagojevich, B-Rod, and what role that fund raising had to do—or attempted fund-raising, which we now know occurred, had to do with him getting the job.  He‘s never been straight about this. 

JOHN HEILEMANN:  It is unfortunate to have to follow Jim Warren, because he‘s like the Poet Laureate of outrage today.  I was going to use the word clown rather than what—

MATTHEWS:  Goofy.  Such a funny word, goof.

HEILEMANN:  But it‘s interesting. 

MATTHEWS:  It‘s kind of cuddly, actually, isn‘t it?  It‘s not nasty at all. 

HEILEMANN:  To the point you made, Chris, you know, it‘s like

politicians always make this mistake.  They fight the last war.  He got

into the Senate by being brazen.  He brazened it through.  Everyone thought

--

MATTHEWS:  I like that. 

HEILEMANN:  -- there‘s no possible way he‘s going to get in.  He came here and just said, I‘m taking this seat.  They threw him out in the rain.  He stormed right in there.  Now he‘s trying to brazen his way through this again.  There‘s a limit, I think, when perjury is in question how much brazenness you can get away with. 

MATTHEWS:  Jim Warren, do you think there‘s a tape somewhere, wherein it looks like to the naked eye that this guy engaged in, dare I say it, pay to play? 

WARREN:  Yes, well, there‘s no doubt that the most recent affidavit, in which he comes clean about multiple conversations with folks in the Blagojevich administration, comes after being informed, I think, by FBI agents that he may well be on tape.  It certainly comes after an inquiry to his lawyer by the FBI.  I think, you know, he‘s trying to tell us a little more fearful of what may actually be on those tapes. 

You know from discussions we‘ve had before, Chris, I think that when these tapes come out, this is going to be a window onto a world that goes far beyond the state of Illinois and the caricature of a corrupt Chicago and Illinois politics.  I think it‘s going to be a fascinating primmer on the way American politics play out every single day in this country. 

Even if Roland Burris is not guilty—and I don‘t think he is of perjury.  If you look at the awful questioning of Illinois senators of him and the House members during their impeachment hearing, I don‘t think you‘ve got a perjury case.  So yes, they will look into it and I think there won‘t be anything there.  He will claim a victory. 

Boy, when these tapes come out, you will be in business, Chris Matthews, for months. 

MATTHEWS:  Thank you, sir.  Let me ask you, now that you‘ve ripped the scab off the question of the year, or of our life time in politics, you and I. What percentage of the dollars collected by candidates in campaign contributions are disinterested?  They don‘t want something from that candidate.  What percentage is disinterested?  Five percent, 10 percent? 

WARREN:  Yes.  I mean, five or 10.  Don‘t forget, we also have in this whole story, we‘ve got Roland Burris who hasn‘t gotten any attention, but somewhere in this mix is Roland Burris looking for a state job for his nephew.  In the first conversation he admitted to with the former chief of staff, with Blagojevich, that was about having the former chief of staff throw some lobbying business his way. 

I couldn‘t help but thinking, Chris, as I was looking at some of the campaign finance contributions today in the race, very quick primary setup, special election setup to replace Rahm Emanuel, the amount of money that‘s flown in from Emily‘s List for the one high-profile female candidate.  There‘s a candidate who I had never even heard of, some apparently surgeon at Northeastern University, who has 60 grand in independent expenditures from the ophthalmologist. 

So everybody wants a bite at the apple.  If you think they‘re doing it because they want to preserve democracy, no way. 

MATTHEWS:  OK, Warren, you‘re the best.  We‘ll be right back to talk about a big New York story.  Page six today and that chimp.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with John Heilemann and the ineffable, the untamable Jim Warren.  Let‘s take a look at the “New York Post.”  I don‘t know if you saw a fresh actual copy of it out there in the news stands out there.  But here it is.  This is today‘s “New York Post,” a major newspaper in New York.  Two policeman have just shot dead a chimpanzee.  One of them says, “they‘ll have to find someone else to write the next stimulus bill.” 

Jim Warren? 

WARREN:  You know, I‘m all for responsibly provocative cartoons, but there‘s a line between provocative and just being needlessly outrageous, insensitive, racist, sexist, you name it.  I just found this woefully unartful.  I heard what Al Sharpton said.  I head what the editor of the “New York Post” said.  I think they‘ve both sort of taking somewhat caricature dogmatic positions in arguing their view. 

I just found, as someone who for many years was a colleague of Jeff MacNelly, one of the great political cartoonist of all time, who won three Pulitzer Prizes, more than anybody except Eugene O‘Neill, the playwright—I found this kind of pedestrian.  I can understand— No, I was a colleague of MacNelly and I‘m just saying, he operated on a far different level.  I found this unartful and kind of pedestrian and find that Al Sharpton‘s got a couple good points to make. 

MATTHEWS:  John Heilemann? 

HEILEMANN:  I think, on a more simple level, it‘s just not funny.  Not funny is a big problem—

MATTHEWS:  What‘s funny about shooting a chimp dead? 

HEILEMANN:  I think the “New York Post” is the biggest selling newspaper in New York City.  It is also a newspaper that specializes in outrage. 

MATTHEWS:  What does that say about New York? 

HEILEMANN:  That‘s a longer, more complicated conversation than we have time for.  They like to try to tweak, particularly, liberal sensibilities. 

MATTHEWS:  Yes. 

HEILEMANN:  And they certainly—look, it is a—there‘s an open question.  There are two possible interpretations.  One is the stimulus bill was so bad that even a monkey could have written it.  And the other is the Sharpton interpretation, that the monkey is a symbol of Barack Obama. 

MATTHEWS:  That cartoon we‘re looking at right now—I wish we could see a better picture, but you want to see the full page there.  Imagine that runs in London tomorrow, it runs in Paris tomorrow, it runs in Nairobi tomorrow, it runs in Capetown tomorrow, it runs in Jakarta tomorrow, what‘s your hunch of how it will be received?  I thank they will have an attitude about it.  What do you think, Jim? 

WARREN:  Yes, I think you‘re right.  I also think, whether you‘re French or German or Scandinavian, you‘re just not going to find it particularly funny.  I sort of looked at it and wondered where was the editor here?  The editor who might have been wondering about possibly even unintended consequences and implications of his work, and might have sent it back to the guy and said, hey, have you thought of how some people might view this or that.  That seems to have been missed. 

MATTHEWS:  Will there be an editorial in the “New York Post” tomorrow apologizing for this cartoon today?  Jim Warren? 

WARREN:  No.  There will be, perhaps, a front-page box saying we stand by our guy, period. 

MATTHEWS:  Wow. 

HEILEMANN:  The “New York Post” is not big on apologies, Chris.  It‘s not their style.  Although my guess is that in the new era, where racial sensitivities are going to be raised, I do think they will be, perhaps, a little more careful next time around. 

MATTHEWS:  I don‘t care if this was 1932, 1952, I don‘t care if this was South Africa 30, 40 years ago, this cartoon is a problem. 

HEILEMANN:  I‘m with you. 

MATTHEWS:  It is a problem.  Thank you both.  Jim Warren, Thank you.  Thank you very much, John Heilemann.  It‘s been a great show,  Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now, it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.

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