updated 3/18/2009 9:38:25 AM ET 2009-03-18T13:38:25

Guest: Sen. Robert Menendez, Sen. Kay Bailey Hutchison, Andrew Ross Sorkin, Pat Buchanan, Rep. Peter King, Ron Christie, Karen Finney High: Outrage at AIG bonuses convulses Washington.

Spec: Politics; Economy; AIG

MIKA BRZEZINSKI, GUEST HOST:  Bail-out bonus backlash, AIG in the hot seat for handing out $165 million in bonuses.  Now Washington is angry?  Now Congress is outraged?  Since when was this news?  Or is the company just a convenient political punching bag?

Let‘s play HARDBALL.

Good evening.  I‘m Mika Brzezinski, filling in for Chris Matthews, who is off tonight on this St. Patrick‘s Day, addressing two Irish-American groups.  He‘ll be back again tomorrow night, of course.

Leading off tonight: AIG in the crosshairs.  If you want to get an idea of just how outraged the public is over the AIG bonuses, take a look at this headline in today‘s “New York Daily News.”  Every once in a while, an issue manages to unite Democrats and Republicans, liberals and conservatives, red states and blue states, and the AIG executive bonuses are it.  It‘s even come to this, members of Congress essentially saying, Give the money back or we‘re going to take it back.  We‘ll just tax the bonuses 100 percent.

And AIG may not be the only victim of the bail-out bonus backlash.  President Obama may have looked a little bit like he was playing catch-up yesterday when he tried to tap into the public anger, but it‘s not as though the president just learned about these bonuses.  They‘ve been in the works.  They‘ve been in black and white.  The administration has known for them for some time now.  So could the backlash wind up hurting President Obama and his agenda?  We‘ll talk about that.

Also, consider this.  There are smart people like Andrew Ross Sorkin of “The New York Times,” who we‘re going to talk to, who are saying that if we don‘t hold our noses and pay to keep AIG executives who created this mess, things may only get worse.  We‘re going to look at that later in the show in the “Politics Fix.”

And see if you can put these pieces together.  First former Bush aides go public defending their former president, then Vice President Cheney goes on TV and bashes President Obama, and then today George Bush himself gives his first speech since leaving the White House.  Are we seeing the early stages of a coordinated effort to help defend and perhaps redefine the Bush presidency?  We‘ll ask that question.

And finally, on this St. Patrick‘s Day, Chris Matthews shares some thoughts and insights on the recent violence in Northern Ireland and what it means for the future of peace there.

But we begin with members of the Senate Banking Committee, Senator Robert Menendez, Democrat of New Jersey, and we‘re hoping to be joined by Senator Kay Bailey Hutchison, Republican from Texas.  We‘re going to talk about the AIG bonus debacle that everybody seems to be capitalizing on.

Senator Menendez, I‘ll start with you.  And let me play a sound bite from your colleague, Chuck Schumer, what he said earlier today.  Take a listen.


SEN. CHUCK SCHUMER (D), NEW YORK:  This is disgraceful.  This is unacceptable.  And it is an offense to millions of hard-working Americans whose tax dollars are the only reason AIG continues to exist.  If Mr. Liddy does nothing, we will act and we will take this money back and return it to its rightful owners, the American taxpayers.  We will take this money back by taxing virtually all of it.  So let the recipients of these large and unseemly bonuses be warned.  If you don‘t return it on your own, we‘ll do it for you.


BRZEZINSKI:  Senator Menendez, are you with Senator Schumer?  Will do you that, follow through and tax them 100 percent, if that‘s the only way to get the money back?

SEN. ROBERT MENENDEZ (D-NJ) BANKING COMMITTEE:  Absolutely.  As a matter of fact, I sat in a meeting of the Senate Finance Committee today, and the chairman of the committee, Senator Baucus, has clearly outlined that.  And we had the IRS commissioner before us on another matter, and he was asked—we need to make sure that we have the highest excise tax possible that can be legally withstood to recoup all of this money.

The message to these AIG employees, which happen to be the employees that drove the company into the position they‘re in, is that either you give it back or we will tax it in a way that all of the money will come back to the taxpayers.

BRZEZINSKI:  OK, that‘s great.  Senator, is it fair to say you‘re surprised by these bonuses?


BRZEZINSKI:  Outraged?  Are you outraged?

MENENDEZ:  Outraged?


MENENDEZ:  Absolutely.

BRZEZINSKI:  Are you angry about them.

MENENDEZ:  Absolutely.

BRZEZINSKI:  OK, but here‘s the thing.  They have been on the contracts for AIG for a year now.  They were part of the deal when—before the company was bailed out the first time.  Why is this a surprise?  Because I‘m wondering if perhaps this is just a political opportunity.

BRZEZINSKI:  Well, I‘m happy to answer that question for you, Mika.  The reality is, is that when we had the emergency that President Bush‘s administration and former Secretary Paulson brought to us, they said, If you don‘t act, we‘re going to have a global financial meltdown.  So they were given these powers.

AIG got its first tranche of moneys last November under the previous administration.  That was the time to look at all of the documentation by the Treasury Department and figure out what conditionality needed to be done.  And they had a second tranche in December, and again, there was no action.  So when it finally comes to light last week, I think you saw the Treasury secretary beginning to respond in a way, say, Hey, this cannot stand.  And I think that‘s the message moving forward.


MENENDEZ:  It‘s not going to stand.

BRZEZINSKI:  I want to bring in your colleague, Senator Kay Bailey Hutchison of Texas.  And Senator, thank you very much for joining us.  Let‘s try the other side of this.  We have been talking a lot today on this network to “The New York Times‘s” Andrew Ross Sorkin, who‘s going to be joining us later in the show.  He writes in today‘s “New York Times,” “It doesn‘t seem fair.  So here is a sobering thought.  Maybe we have to swallow hard and pay up partly for our own good.  But what about the commitment to taxpayers?  Here‘s the second, perhaps more sobering thought.  AIG built this bomb and it may be the only outfit that really knows how to defuse it.”

And I would add to that, Senator Hutchison, aren‘t we all a part of this?  Isn‘t some of this outrage a little disingenuous?

SEN. KAY BAILEY HUTCHISON (R-TX), BANKING COMMITTEE:  Well, I think that, you know, many of us were not privy to the contracts.  I do think there should have been much more due diligence at the first time and then at the second opportunity, and then most recently.

And I don‘t buy that we just can‘t do anything about it.  I agree with the people who say, first of all, they should voluntarily not take these bonuses.  Remember, even Hank Greenberg didn‘t take his bonus after 9/11 because we were in financial straits and our economy had been hit very hard.  At AIG, he refused about a $5 million bonus.  You know, that‘s the kind of spirit I‘d like to see here.  I‘d like to see them voluntarily step up and say, I understand that this is something the American people didn‘t intend to fund.

And they‘re lucky to have a salary.  They‘re lucky to have a job, and they ought to be working to get AIG back in the black.

BRZEZINSKI:  Senator, are you with your colleague, Senator Menendez there, as well as Chuck Schumer, that if they don‘t give the money back, Congress will move forward to tax them 100 percent so the money gets back some way, somehow?

HUTCHISON:  Yes.  I do think that we should take action.  I think they should know that we will take this action.  And I think it should apply to others who are taking federal stimulus money, as well.  When money is misspent, I think if our only lever is taxes, or maybe it is you return the money or you‘re out of a job, that‘s another piece of leverage that could be used.  But I think this is something we can‘t just sit back and say, Well, we can‘t do anything about it.  I think there are some things we can do.

BRZEZINSKI:  A couple more questions.  I want to play what CNBC‘s Rick Santelli said this morning on CNBC, and then I have a question for Senator Menendez on the other side.  Take a listen.


RICK SANTELLI, CNBC:  Maybe I‘m missing something, but the outrage seems to be about “M‘s,” millions of dollars, right, $165 million, OK?  But I would think that it should be looked at as a pretty big positive because when you go from the M, maybe you should try to go to the B‘s, which is the billions of dollars.  And maybe that‘s going to even enlighten for the T, trillions of dollars.  You know, $165 million is like worrying about 16.5 cents while 165 maybe necessitates a little more outrage!


BRZEZINSKI:  All right, the outrage factor.  I just—I want to come clean on this.  You‘re both politicians and we cover them, but we‘ve got Senator Grassley going off on this issue, very outraged, saying ridiculous things.  We‘ve got Senator Schumer and a lot of you folks there pushing for the money to be paid back.  I‘m wondering, is this political opportunism to feign outrage at something that we knew was happening for a year now?  Do you, Senators Menendez, do you, Senator Hutchison, do—perhaps—perhaps Chuck Schumer—do you get the Rick Santelli award?

MENENDEZ:  Well, you know, I‘ve seen a lot of outrage in your show and the shows of others on MSNBC and other channels.  I think it‘s just a genuine outrage that is shared collectively across the landscape of the country by people who are tightening the belts, facing sacrifices every day.

And it may have existed a year ago, but no one knew, other than maybe the specific people at AIG and the then Treasury secretary who gave them the first tranche of money should have brought it to the Congress‘s light (ph) and say, By the way, there‘s some contracts here and these contracts are going to be a problem.  No one said that to the Congress.

BRZEZINSKI:  You know, taxpayers—and Senator Hutchison, would love to hear from you, too, as well.  So we‘ll start with Menendez and then pan out.  But taxpayers, what, own about 80 percent, at this point, of this company.  Why not we just take the whole thing over at this point, or should it be allowed to fail?  Where do you guys stand on the long-term future of AIG?  Senator Menendez, you first.

MENENDEZ:  Well, actually, one of the things that I know that Treasury Secretary Geithner is looking at on the restructuring of AIG, how does that restructuring—if we don‘t get the money paid back, we have the taxing opportunity.  And secondly, the restructuring opportunity to take it all back.

Finally, the question is, I‘d rather see the private sector run a company like AIG with the government oversight.  And if we can do that successfully, it‘s always preferable.  But at the end of the day, we have systemic risks here, and that‘s why we got involved in this in the first place.

BRZEZINSKI:  All right, Senator Hutchison, what do you think should happen to AIG?  What especially in light of these bonuses and the outrage that seems to go all the way up to the top to the president of the United States?

HUTCHISON:  I just think there need to be clearer rules, Mika.  I don‘t want to bring down the entire insurance industry.  I think there are large global ramifications to that.  So you do want to have an insurance component here.  But I do think we need to have much clearer rules when we‘re in this government bail-out.

I mean, you know, Rick Santelli talking about millions, why not talk about billions and trillions?  I think we are losing sight of the picture here that we can‘t just be talking about billions and trillions of dollars as if it were $1,000 or 20 cents.  This is real money that eventually we are going to have to pay back, or at least bring the debt in line.  And I think we‘ve got to step back here and have rules that apply to all of the financial institutions and to AIG and similar organizations.

BRZEZINSKI:  Well, you talk about similar organizations.  I couldn‘t agree with you more.  I‘m just—in the grand scheme of things, I‘m looking at these AIG bonuses, and as Rick Santelli pointed out, I mean, they‘re a small portion of the bigger problem.  There are companies out there where you have executives who, it appears, snuck bonuses through right before the company went down and was bailed out by the government.

It seems to me I would be more outraged by that behavior than a bunch of bonuses given out to several thousand employees that add up from $1,000 to $19,000.

HUTCHISON:  You know, I think there has not been enough oversight here and not enough rules to start with.  And if we have learned anything—I mean, and I will start back from September of last year.  Mistakes were made.  But I think not learning from those mistakes is a huge mistake.  And we‘ve got to step back and say, There will be rules for this.  Here are the rules.  It‘s not business as usual anymore until we get over this crisis and we‘re back into a system that we know has regulatory reform that makes it work.  And I think we‘re going to have to do special things.

BRZEZINSKI:  All right.  Let‘s pan back.  Bottom line.  Yes or no from you both.  Senator Bob Menendez and Kay Bailey Hutchison, will that money from AIG—will those bonuses be recovered?

MENENDEZ:  They‘re going to be recovered, 100 percent.

BRZEZINSKI:  All right.  Senator Hutchison?

HUTCHISON:  I believe so, but I never want to predict fully anything that happens in Congress.  But I do believe that the sentiment is there.  We‘ve just got to find the legal way to do it, if they don‘t come up with a volunteer program, which would be my first choice.

BRZEZINSKI:  OK, thank you, Senators Bob Menendez and Kay Bailey Hutchison.  We appreciate it.

Coming up on HARDBALL: How much political damage does the AIG story hold for President Obama?  With Republicans now saying they won‘t go along with future bail-outs, has the outrage over AIG depleted the president‘s political capital?  That‘s next.

You‘re watching HARDBALL, only on MSNBC.




BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  What this situation also underscores is the need for overall financial regulatory reform, so we don‘t find ourselves in this position again, and for some form of resolution mechanism in dealing with troubled financial institutions so that we‘ve got greater authority to protect American taxpayers and our financial system in cases such as this.  Now, we already have resolution authority—excuse me—I‘m choked up with anger here.



BRZEZINSKI:  All right.  Welcome back to HARDBALL.  I‘m Mika Brzezinski, sitting in for Chris Matthews.  Are you now playing the president, Harold Ford, Jr.?



(INAUDIBLE) we all get choked up.

BRZEZINSKI:  You‘re not choked with anger, are you?  All right.  That was President Obama yesterday.  With anger growing over the AIG bonuses, could the president be the one who takes a hit politically.  We‘re going to ask that question.  Here take a look now at Missouri senator Kit Bond this morning fanning those flames.


SEN. KIT BOND ®, MISSOURI:  I‘m quite frankly a little surprised to see the president and his Treasury secretary so outraged by these bonuses when they had the opportunity to prevent them before they gave AIG the latest installment of taxpayer dollars.


BRZEZINSKI:  OK, with us now, New York congressman Peter King, a member of the Financial Services Committee, and former Tennessee congressman Harold Ford, Jr., a MSNBC political analyst and public policy professor at Vanderbilt University.

You heard Kit Bond.  Kind of have to say, Harold—and Peter King, follow up—it seems like he‘s capitalizing on a political opportunity here.  There‘s not a big surprise with the bonuses, and they certainly are not the first to come along.

FORD:  I think two things.  First of all, I think you‘re right.  This has been not a great day and not a great answer for the White House.  In fairness to them, though, they appointed someone that they thought would handle this matter, and he didn‘t, in Mr. Liddy.  If I were advising the White House, I‘d advise them to relieve Mr. Liddy of his duties, to consider putting in an elder statesman there at AIG...

BRZEZINSKI:  You know the government put Liddy in there.

FORD:  I know, but I would remove him from his duties.  But he‘s government-appointed.  I would appoint someone else, allow them to begin the orderly unwinding of some of these positions that AIG‘s involved in.

And then I would consider, Mika, appointing sort of a TARP institution compensation committee, three people of unimpeachable integrity—a Colin Powell, a Jim Baker, an Alice Rivlin, people of that nature, of that stature—who would not have to give consent for bonuses that these institutions to provide but would certainly bring about the transparency that so many in Congress want and the country wants in terms of bonuses that these institutions provide or payment they provide their top executives.  And two, they would be able to recommend if performance was the driving factor here and not just contractual duties, which we see with AIG.

BRZEZINSKI:  Peter King, where do you stand on these?  Because I got to tell you, everyone‘s outraged.  Everyone wants the money back.  But these were bonuses that were promised by contract, I believe, over a year ago, before the first bail-out.

REP. PETER KING ®, NEW YORK:  Yes.  Well, first, let me wish my good friend, Harold Ford, a happy St. Patrick‘s Day.

FORD:  Same to you, brother.


BRZEZINSKI:  ... with the green ties.  OK.

KING:  OK.  And going from there, there‘s always going to be a certain amount of politics involved.  Should people have known?  Yes, I‘m sure they should have.  For instance, Tim Geithner was there back in September.  He‘s had a six months head start on this.  Fact is, a lot was thrown at Congress, a lot was thrown at the administration, both the last administration and this one, and there are going to big mistakes made in any start-up operation.

I think the Obama administration, being on the spot now, is going to take a certain amount of hits for this.  Having said that, we have to be careful not to overdo the politics because all of us have to be in this together.  I think what Harold is saying could well, you know, be the right procedure to get people in there who are going to manage it from here on in because if Democrats are going to keep saying that Paulson and Bush were the ones responsible back from September, and we‘re going to say it‘s Geithner and—you know, the Democrats—we‘re going to end up losing all the faith of the American people.

So, yes, we, as Republicans, are entitled to take a few shots, but let‘s get beyond that as quickly as we can and try get it rectified. 

BRZEZINSKI:  Well, there‘s a lot of outrage going around, a lot of demands going around:  Get the money back.  We will tax them.  Maybe we can get them to give it back in the next bailout, the president chiming in about that. 

Here‘s what Larry Summers said today to CNBC‘s Steve Liesman on that issue. 



are not going to abrogate the law.  We‘re not going to abrogate contracts. 

We‘re not going to do things that would put the whole economy at risk.

But we are going to be as creative and as energetic at addressing this situation as we can. 


BRZEZINSKI:  OK.  So, if I‘m defining abrogate perfectly, Harold, it doesn‘t sound like they‘re on the same page. 

HAROLD FORD, MSNBC POLITICAL CONTRIBUTOR:  Well, here‘s the challenge the White House has.

They‘re trying to gain buy-in from the private sector for a number of different things they want, from the—the TALF, which would cause the private sector to play a role, along the public sector, in buying up some of these assets and providing credit to the system. 

If you‘re breaking contracts, if you‘re a private sector player, why would you engage in an agreement with the government to invest alongside or to be willing to—to put private capital at stake, if the government‘s not going to fulfill their contractual duties? 

I trust Congress will get this done and the president will get this done.  The question is, where do you go from here?


FORD:  And how does the president maintain enough credibility to go back to Congress to ask for more resources to help the financial system recover as a whole?

BRZEZINSKI:  You‘re darn right.  Those are good questions. 

Peter King, should they, should the—should Congress, should the White House be getting those contracts to be broken? 

KING:  Congress should find a way to do it, or the administration should lean on them in a way to get it—to have it done, but it should be done in a way that does not, as Harold said, scare off the business community, because we have to be partners with the business community into the foreseeable future. 

And, for instance, as far as the tax issue, I‘m not certain we can do it by 100 percent taxation.  I don‘t know if that has the addition of a bill of attainder retainer or ex post facto law.  I know it‘s civil.

But, still, it raises issues, when we have had six months.  As you said, the government‘s known for six months.  And now, after the fact, we‘re going after them tax-wise.  I would hope that AIG would realize that this should be done in a voluntary way and it can be worked out in way that gets the job done, but also does not scare off the private sector...


KING:  ... because if the government is at war with the private sector, you know, we can win the battle today, but lose the big war. 

BRZEZINSKI:  And, Harold, the private sector has the right to make decisions like this, just not in retrospect, which I certainly have a problem with. 

I think now forcing these people to give the money back, especially, if you look at exactly how they have been handed out, some of them are very small bonuses that certain insurance company employees are depending on and were promised.

Having said that, in tough times, a lot of companies are saying, you know what?  We promised you a bonus.  Sorry.  We can‘t do it.  And, by the way, we need you to take a week off without pay.  And you know what?  We need you to do this, because we need to stay afloat.  Otherwise, we shut down.  Your choice. 

That‘s what‘s happening out there.  Why couldn‘t that have happened at


FORD:  Those are great questions.  And I think Peter says it well. 

A lot was thrown as President Bush and Secretary Paulson.  A lot of has been thrown at President Obama and Secretary Geithner.  I hope saner heads—I hope Peter is one of the leaders, Congressman King is one of the leaders in this reconciliation effort there in the Congress.

But, going forward, there are going to be many more battles.  My concern is, how do you put in place the infrastructure and architecture to ensure we don‘t face these problems going forward? 


Well, Harold Ford talks about a reconciliation effort here.  With AIG, looking ahead, Peter King, it sounds to me like these people have bullseyes on their backs and the money is going to be taken away from them, because everyone is—quote—“outraged.”

It doesn‘t seem fair. 


KING:  Well, it is probably what will happen, is going to happen ultimately, unless we can arrive at a—a negotiated settlement in the meantime.

And that‘s why I would hope that AIG can find a way to resolve this, not that I‘m that concerned about AIG, per se, but it is the business community, and we don‘t want to be at war with them over the next several months.

And what happened, I think, with these bonuses—and, yes, there is outrage—this was the tipping point.  You know, it always comes.  When you‘re talking about billions and trillions of dollars, there had to be a moment when where the tipping point came.  And it came with these bonuses.  It could have come two weeks.  It could have come a month ago, but it‘s come now. 

BRZEZINSKI:  Gosh.  I had a tipping point when I saw bonuses getting slipped through before a company went under. 

KING:  Yes. 


BRZEZINSKI:  I thought that was kind of outrageous.  But I don‘t know. 


KING:   I think you‘re right.  Actually, that was more outrageous. 

BRZEZINSKI:  Much more.

FORD:  Eighty percent of the company -- 80 percent of this company is owned by the taxpayers.  This should have been handled differently and better. 


FORD:  But, as Peter said, there‘s so many big issues this Congress is going to have to confront, mainly with a financial recovery package, which will probably include the TALF facility that Secretary Geithner is talking about. 

You have got to get on the same page here.  And, again, I hope Peter‘s a leading voice in all of this. 

BRZEZINSKI:  Well, he may be. 

And, Congressman Peter King, thank you very much. 

KING:  Thank you, Mika.

BLITZER:  Harold Ford Jr., as well, thank you...

KING:  Thank you, Harold.


FORD:  ... Saint Pat‘s Day, Pete.

BRZEZINSKI:  ... for joining us. 

Yes, happy Saint Patrick‘s Day. 

When we return on this Saint Patrick‘s Day, Chris Matthews will have a special commentary on the situation in Northern Ireland, where recent violence threatens to war the peace that—threatens to mar the peace that has been holding for over a decade. 

You‘re watching HARDBALL, only on MSNBC.  


BRZEZINSKI:  On this Saint Patrick‘s Day, Chris Matthews, like many Irish-Americans, is keeping a close eye on the recent attacks in Belfast, Northern Ireland.  After years of conflict, Belfast has enjoyed a decade of peace.  And everyone hopes that this new violence doesn‘t mark a return to the ways of old. 

Here‘s Chris. 


CHRIS MATTHEWS, MSNBC ANCHOR:  The headlines from Northern Ireland, two British soldiers and a policeman killed, were just like the bad old days.  The story we‘re getting is far different. 

The soldiers weren‘t part of some army of occupation riding through the streets of Belfast or Derry.  The two killed were engineers with their bags already packed for Afghanistan.  They were shot as they came from their barracks to receive a pizza order from Domino‘s. 

The reaction was also different.  The top Republican leader in Northern Ireland, Deputy Minister Martin McGuinness, said those who did the shooting, all 60 bullets fired on those soldiers, were traitors, gunmen who the people of the North, including those who dream of a united Ireland, should, without thinking too hard about it, turn over to the police. 

The police officer who was killed was driving through a tough Catholic neighborhood in a regular place car, not some armored Land Rover.  It is all part of the North‘s demilitarization.

And Stephen Carroll, the policeman murdered, was himself a Catholic.  His wife, Kate, got paid a visit afterwards by McGuinness, a fellow Catholic, who, as I said, shares power with the Loyalist Peter Robinson in running Northern Ireland. 

So, you see, a lot has changed because of the Good Friday agreement in 1998.  Northern Ireland has a shared government of Loyalist and Republican, Protestant and Catholic.  The Northern Ireland police force is increasingly integrated, Catholic, as well as Protestant.

And the people of Northern Ireland united in wanting peace and no return to the days and nights of locked doors and killing in the night, no return. 

If you want progress in the North, there are real ways to go about it.  Tell any relative you have got over there that we‘re hoping for peace over here, better yet, that you respect any effort to bring reconciliation between the two sides. 

Right now, 95 percent of the kids of Northern Ireland go to separate schools.  Almost two-thirds have never had a conversation across the religious line, between Catholic and Protestant.  But those who do go to school together are inclined to describe themselves not as British or Irish, but as Northern Irish, a term that unites, rather than divides, that breeds hope for a future Ireland, where the whole isle can live in peace, and, yes, for all practical purposes, unity, without the watchtowers, and the concertina wire, the checkpoints, the 40-foot-high walls that still separate Catholic from Protestant. 

It‘s hard for us in America to understand what the fight is all about.  You have got guys named Jackie Gallagher and Danny Kennedy, who are unionists, who see things different from the guys with names that sound just the same on the nationalist side.  They look alike and share a common Christianity. 

I just hope and pray this peace holds and grows to something better, especially in these very tough economic times.  I have my heart in this fight, obviously.  My grandmom Shields (ph) and grandpop Shields (ph) were Irish Catholic to the core. 

Their families came over during the famine and didn‘t change much from when they did.  My grandmom in Chestnut Hill, as we called her, my dad‘s mom, was a Presbyterian with a brogue to match Mrs. Doubtfire.

As a grandson to both, my brothers and I know from birth that peace is possible, even love. 


BRZEZINSKI:  Chris, thank you. 

Up next:  Former President George W. Bush gives his first speech since leaving office. 

His vice president‘s been talking, too, as have his top aides.  Hmm. 

Is this all part of a concerted effort to defend the Bush record? 

You‘re watching HARDBALL, only on MSNBC.  


REBECCA JARVIS, CNBC CORRESPONDENT:  I‘m Rebecca Jarvis with your CNBC “Market Wrap.”

Stocks rallying—the Dow surged 178 points, the S&P 500 up 24, the Nasdaq gaining 58 points. 

The rally was fueled by news wholesale prices edged up a slight one-tenth-of-a-percent in February, also by word construction of new homes jumped 22 percent in February from the previous month.  But housing construction is still 47 percent below where it was only a year ago. 

Oil prices, meantime, continue to crime.  Crude rose another $1.81,

closing at $49.16 a barrel.  That‘s the highest level in three months

Meantime, the Federal Reserve is expected to hold interest rates steady after a two-day meeting that began today. 

And prosecutors now say they plan to seek $30 million Bernard Madoff and his wife lent to their two sons.  They also plan to seek jewelry and watches belonging to Madoff and his wife valued at more than $2.5 million. 

That‘s it from CNBC.  We‘re first in business worldwide—now back to


BRZEZINSKI:  Welcome back to HARDBALL.  I‘m Mika Brzezinski, in for Chris Matthews tonight. 

We‘re going to have Pat Buchanan and Andrew Ross Sorkin coming up.

But, first, a group of former Bush aides began defending the former president on TV and in the papers.  Then, former Vice President Cheney went on TV earlier this week and criticized President Obama. 

And, today, former President George Bush gives of his post-presidency. 

Is this the start of an orchestrated effort to defend the Bush legacy? 

Ron Christie served as an aide to former Vice President Cheney.  And Karen Finney is a Democratic strategist and former communications director for the Democratic National Committee. 

Thanks for coming on the show to you both. 


BRZEZINSKI:  Politico recently reporting that: “An informal network of former Bush aides is keeping his views in the political bloodstream, defending his legacy in TV appearances and backgrounding reporters about his record.”

Ron, why do you think this is going on?  Why are we seeing more Bush people coming out now? 

RON CHRISTIE, FORMER SPECIAL ASSISTANT TO PRESIDENT BUSH:  Well, Mika, I don‘t think this is any recent phenomena. 

Not only did I work for the vice president, but I was also a special assistant to President Bush.  And those of us who worked for this president have been on the airwaves for last several months, for the last several years, talking about politics.

And it seems to me that the media, all of a sudden, with all the focus on the first 100 days of the Obama administration, is now trying to drive a story, and saying, oh, my goodness, the Bush people out there trying to burnish his legacy or trying to draw distinctions.

This is something that Bush aides and friends of the former president and former vice president have been doing for months.  This is not anything out of the ordinary. 

BRZEZINSKI:  All right, I want to play the president using some keywords that might be annoying to the former Bush administration folks. 

Take a listen.  This might be what annoys them. 


BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Because of the massive deficit we inherited and the enormous costs of this financial crisis, we have made some tough choices that will cut our deficit in half by the end of my first term and reduce it by $2 trillion over the next decade. 

Now, would I prefer to tackle these challenges without having inherited a trillion-dollar deficit or a financial crisis?  Absolutely. 

At a time when we have inherited a trillion-dollar deficit, we will start by doing little housekeeping. 


BRZEZINSKI:  OK.  So, they use the word inherited a lot. 



BRZEZINSKI:  But, Karen Finney, didn‘t they inherit the crisis? 

FINNEY:  Well, they absolutely did.

And, look, it is not surprising that the people who told us there were weapons of mass destruction are now trying to rewrite history.  I mean, the legacy of a president is always something that your former staffers are going to want to try to manage. 

But it is a fair assessment to say that let‘s remember that President Bush did leave us with a $1.3 trillion deficit.  We have more people without health insurance.  He left his own Republican Party pretty much in tatters.  So, you know, and some would say he left as the least most popular president in the history of our country. 

So, sure, that‘s a record that you‘re going to want to push back on. 

I understand why they would want to do that. 

BRZEZINSKI:  And, Ron, isn‘t that fair enough; they inherited this crisis?  They have been in office, what, seven weeks.  I think they can say they inherited some of the things that may have spilled over from the past eight years. 

CHRISTIE:  You know, Mika, I find it remarkable that a lot of the folks on the Democratic side of the aisle seem to forget that we had 9/11, that this country was attacked, that we have been fighting two wars. 

There‘s no question that there‘s a deficit that had been passed on from one administration to another.  But I can tell you, as having been there in the first day in January 1 of 2001, the Bush administration inherited a recession from the Clinton administration. 

Rather than harp on what the former administration and what the former president had done, the Bush administration said, we were hired to do the people‘s business. 

I find it remarkable that Democrats continue and the president in the clip that you just played continues to say inherited a mess, the Bush mess. 

He should spend...


FINNEY:  But, Ron, it‘s a basic fact that he...


CHRISTIE:  Wait.  Hang on a second. 


FINNEY:  It‘s a basic fact that we—he inherited a $1.3 trillion deficit.  Do you dispute that fact? 


CHRISTIE:  Let me—let me finish my point. 

The fact of the matter is, given the size of the deficit, whether it‘s $1.3 trillion or whether it‘s $0.3 trillion, the fact of the matter is, the American people expect this White House to act responsibly.  The Treasury secretary is the only confirmed official in the Treasury Department.  The White House seems more intent on laying blame than acting responsibly to get us out of this. 

FINNEY:  That‘s ridiculous.  They‘re not trying to lay blame, but they‘re trying to be responsible about telling the American people the facts.  And you mentioned the wars.  Let‘s remember that for eight years we had a president who really wasn‘t telling us the truth about what was really going on with our budget and kept those wars off the books. 

And now you have got President Obama trying to be very honest and forthright with the American people about just what the situation is that we‘re dealing with.  And I think so far they have done a very good job of holding to their promise to be accountable, to be transparent and also to start to tackle these problems. 



BRZEZINSKI:  Let me just throw in Dick Cheney here, because, you know, I‘m not sure saying that they inherited something is actually Bush bashing.  Because they did.  They inherited—


BRZEZINSKI:  Whether you like it or not, they inherited—yes? 

CHRISTIE:  The manner in which the president and his spokesman continue to say, we inherited a mess from the Bush administration, continuing to use the president by name, saying we inherited something, I think the American people would rather hear what President Obama‘s going to do to rectify the situation.  And going to Karen‘s point for a few seconds ago, for saying how accountable and transparent the Obama administration is, that‘s ridiculous. 

FINNEY:  Well then how constructive—

But explain to the American people, Ron, how telling the truth and the facts about inheriting a 1.3 trillion dollar deficit is bashing.  It is the truth.  Telling the truth is bashing?  Really? 

CHRISTIE:  I think it‘s rather irresponsible at best. 

FINNEY:  Irresponsible to tell the truth? 

BRZEZINSKI:  Karen, hold on. 

CHRISTIE:  When you talk about transparency and accountable, I would point you to this: the president said he was going to have the most ethical administration and he said he was going to make sure that he didn‘t have lobbyists working in his administration.  Now you have a number of people who are receiving waivers.  The press spokesman was asked from the podium, we would like to see the waiver these people had to fill out since they‘re lobbyists.  We haven‘t seen that.

You talk about a president who said he‘s going to make tough choices. 

We haven‘t seen this president make one tough choice. 

FINNEY:  He‘s made a lot of tough choices, Ron. 

CHRISTIE:  He hasn‘t made one tough choice.  You can‘t name a program he‘s cut.  All he‘s done is increased domestic spending.  He has spent more with the stimulus bill, with the omnibus bill and with his proposed budget.  When you talk about a deficit, he will have spent more money in a few months than the entire Bush administration spent over eight years. 

FINNEY:  Again, the Bush administration blew a surplus into a deficit and left us with the largest expansion of government in the history of our country.  And President Obama has actually had the courage to say, we‘re going to stop kicking these problems down the road and we‘re going to actually deal with the situation we have.  We can walk and chew gum at the same time. 

We can deal with the banking crisis.  We can deal with the credit crisis.  We have to deal with the health care crisis.  We have to have both a short term, a midterm and long term strategy. 

BRZEZINSKI:  Karen, I wish they would do that, instead of pretending to be outraged about one company‘s bonuses.  I‘ll tell you that.  That‘s the one thing that lately seems a little disingenuous.  Ron, talk about Bush bashing versus Obama bashing, and who‘s really being more irresponsible.  What do you make of Vice President Cheney going after President Obama, saying that he‘s making this country not as safe as it could be?  That it‘s not going to be safe under the Obama policies.  How‘s that helpful? 

CHRISTIE:  Actually, I watched the interview and I worked for the vice president.  And that‘s not exactly what he said.  He said that this administration has not taken steps to ensure the safety of this country.  If you take a couple of examples, one, the secretary of Homeland Security said in interview with “Der Spiegel,” that, in fact, we are not in a war on terrorism; we are fighting a man created disaster.  Is that how you want to call terrorism? 

The Obama administration said they want to close Guantanamo Bay.  They want to shut down CIA detention facilities.  They want to cut the Defense budget.  But yet, still, they haven‘t said concretely how they‘re going to take one step to provide for the safety of the country.  I just want to hear one example.

The Obama administration says that they want to draw a distinction with the Bush administration.  I can‘t think of one thing that they have done to make the country safer, not one. 

FINNEY:  Ron, I‘ll give you one example.  How about fighting the real war on terror in Afghanistan?  How about dealing with the threat that is happening in that region of the world, instead of ignoring it, as we had under the Bush administration? 

CHRISTIE:  That‘s a political commentary and neither you nor I served in the military and I—

FINNEY:  Are you denying the fact that al Qaeda is resurging in that part of the world? 

BRZEZINSKI:  Here we go. 


FINNEY:  I‘m saying if we want to go there, let‘s really go here. 

BRZEZINSKI:  Here‘s the thing.  Ron, we‘ll go there another time.  I would love to.  Trust me.  Ron Christie and Karen Finney, I would love to talk to you both again.  Thanks for coming on. 

Up next, the case in favor of giving out the bail outs to executives at AIG, 165 million dollars, I believe.  Plus, how should President Obama navigate the dicey politics of bail out rage?  That‘s next in the politics fix.  This is HARDBALL, only on MSNBC.


BRZEZINSKI:  We are back now with the politics fix.  Let‘s bring in MSNBC political analyst Pat Buchanan and Andrew Ross Sorkin of the “New York Times,” who‘s been getting mean e-mails all day long, just because he wrote a column saying, you know what, they may have to pay those bonuses. 

Andrew, we are going to try this one more time.  I hope you two get along.  Why, why do you think these bonuses are deserved? 

ANDREW ROSS SORKIN, “THE NEW YORK TIMES”:  Well, no.  Hold on.  Take a step back.  I‘m not claiming that they‘re deserved.  Let‘s stipulate these are outrageous.  They‘re disgusting.  They‘re offensive. 

BRZEZINSKI:  Oh good. 

SORKIN:  They‘re all of those things. 

BRZEZINSKI:  You‘re all good now. 

SORKIN:  I‘m suggesting something very different, which is I‘m suggesting that our job as the government in this case, or as taxpayers is we can‘t unilaterally rip up Willie Nilly contracts.  That is my big argument on this, which is to say, we can negotiate with these people.  We can go back to these employees and say, listen, the world has changed.  We shouldn‘t be paying you this, and hope that they voluntarily do it. 

But what gets me worried is the political rhetoric in Washington, where people are suggesting that really what we need to do is just cram down on these guys, and rip the contracts up.  And I think once you start that, it‘s a very slippery slope. 

BRZEZINSKI:  Pat Buchanan, as you know, Washington is outraged.  Everyone is angry and everyone is chiming in and making sure they put their rubber stamp of outrage on this issue.  Pat, I mean, is it going to come to the point where Congress has to somehow tax these bonuses 100 percent, so the money gets taken become that way? 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  It looks like Congress is going to do anything to get itself off the hook right now.  But to Andrew‘s point, when General Motors came in and asked for money, they said, go back out there and get rid of that jobs bank that the United Auto Workers have gotten.  They put the hammers on these guys, break all these contracts, do this or that.  Otherwise, you don‘t get a dime when you come back here. 

But there seems to be a solicitude, frankly, for these guys on Wall Street and AIG that there‘s not for people in the manufacturing industry, Andrew. 

SORKIN:  You know what, Pat, let me take on that issue.  We actually got—when I say thousands of e-mails, I mean thousands of e-mails on this specific issue about the auto unions.  The one distinction I would make is the following: in that case, and it may feel like a cram down, there still is at some level a negotiation going on.  That‘s all I‘m really arguing for.  If you want to negotiate with these employees at AIG and say, you know what, we can‘t really honor the contracts and would love to figure of a different way to make this work for you, I‘m all for that. 

I would actually be against anybody doing just about anything else.  The issue on your auto unions is it‘s a negotiation.  What people in Washington are talking about something different. 

BUCHANAN:  Wait a minute.  General Motors has been told, in effect, you don‘t do it, you will go into bankruptcy.  Why don‘t we use the same hammer on AIG? 

SORKIN:  We should have.  We should have. 

BUCHANAN:  You‘re not getting the 30 billion dollars until or unless you deal with it, and then send them back to do it. 

SORKIN:  There‘s absolutely no question that on day one, when you go back and look at—what is it, September 16th, when they put 85 billion dollars in AIG, it should have come with all sorts of stipulations.  But, you know what, it didn‘t. 

BUCHANAN:  You‘re going—this is the old, we inherited this from the Bush administration.  You‘re right.  The first two trenches, but they just got 30 billion dollars from Obama‘s White House or Mr. Geithner, when they knew these bonuses were there.  And they had a whip hand and they did not use it the way they did on GM. 

SORKIN:  Again, I‘m not disagreeing with you.  What I‘m suggesting to you is that Tim Geithner should have said, we‘re giving you 30 billion dollars, if you rewrite all of your compensation programs.  Again, he didn‘t.  So it goes back to—we don‘t want to end up a banana republic.  That‘s the issue. 

BRZEZINSKI:  The shock should not be today, Pat.  The shock was a year ago, when they signed up for this, when we bailed them out. 

BUCHANAN:  We got Obama, Geithner, we got this new team that doesn‘t do those sort of things, not in bed with these folks, and you find out they gave them 30 billion dollars and they knew all about the contracts. 

BRZEZINSKI:  They did.  Andrew, I want to press you on one issue.  You talk about your concern about ripping up contracts.  On our radio show today, Karen from Boston called in.  Her husband works for a really good company.  Every year he gets a bonus.  He was guaranteed a bonus this year.  And guess what?  Company called and said, you‘re not going to get your bonus this year.  We are holding on for dear life.  There will be no bonuses.  There you go, contracted bonus canceled.

SORKIN:  Contracted bonus canceled.  I bet they said, sue me.  I think here‘s the distinction: we see businesses all the time try to wiggle out of renege on contracts.  I don‘t think anybody thinks it‘s a noble or honorable thing to do.  I‘m not saying that‘s a good thing.  But I‘m telling you the government—

BRZEZINSKI:  It happens. 

SORKIN:  It does happen.  But when you get the government doing that, it changes the whole game. 

BUCHANAN:  Andrew, you also made an argument that these were indispensable individuals to unwind this two trillion dollars worth of derivatives and credit default swaps.  How can they be that indispensable, be the only guys who know how to defuse a bomb?  What does that say about AIG and the regulators? 

SORKIN:  I‘m not an apologist for AIG and I‘m not an apologist executives.  What I‘m suggesting was at the time that they signed that contract, AIG clearly thought that they needed to keep these people in their chairs.  And there‘s probably a bigger argument to be made that even today, we need to keep some of these people in those chairs.  Frankly, nobody wants to work at AIG.  You need talented people to get in there to save our bacon. 

BUCHANAN:  You‘re going to give them three million dollar bonuses to work at AIG, when you got thousands of guys on Wall Street who have lost their jobs? 

BRZEZINSKI:  Listen, we bailed them out, too, Pat.  Hold on one second.  We‘ll be back with Pat Buchanan and Andrew Ross Sorkin for more of the politics fix.  You‘re watching HARDBALL, only on MSNBC.


BRZEZINSKI:  We‘re back with Pat Buchanan and Andrew Ross Sorkin of the “New York Times” for more of the politics fix.  One point, final point, from each of you.  Andrew, I‘ll start with you.  What would be the danger if Congress stepped in and taxed these bonuses?

SORKIN:  You know, maybe there is no danger.  But I do think that someone should stand up and say that, you know, if we start deciding we‘re going to tax this and tax that—again, it‘s the rule of law.  We don‘t live in a banana republic.  

I really do think that these bonuses are not deserved.  They shouldn‘t get these bonuses. But if it‘s by contract and we can‘t get around it, we probably should do the honorable thing.

BRZEZINSKI:  Pat Buchanan, isn‘t this feigned political outrage to pretend that they are shocked and angry about bonuses that were on the books for a year, a company that we bailed out. 

BUCHANAN:  Congress‘ rage is due to the fact that it was completely clueless.  It was in the dark. 

BRZEZINSKI:  They should be embarrassed they didn‘t know.

BUCHANAN:  They should be embarrassed and they‘re going to do all manner of things.  This is bad news for Obama.  He‘s been hitting the administration, we inherited this.  He didn‘t inherit this baby.  Worse than that, Mika, coming down the road, they‘re going to need more bailout money from the banks.  They may need more bailout money for AIG, because AIG is just a pass through to European banks, Goldman Sachs.  If that happens, this country will be in a firestorm.  And he may have a choice between doing that, which kills them, or letting the economy boom. 

BRZEZINSKI:  But they did inherit it.  The first bailout was with the previous administration.  The contract was signed to give them the bonuses before that. 

BUCHANAN:  They gave 30 billion dollars knowing these contracts were sitting there and they didn‘t make it public. 

BRZEZINSKI:  Pat Buchanan, Andrew Ross Sorkin, what a day you‘ve had.  We‘ll see you back soon.  Chris Matthews returns tomorrow night at 5:00 and 7:00 Eastern time me for more HARDBALL.  I‘ll see you tomorrow morning real early on “MORNING JOE.”  Right now it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.



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