updated 3/20/2009 10:21:32 AM ET 2009-03-20T14:21:32

Guest: Rep. Steve Israel, Rep. Dan Lungren, Chris Cillizza, Todd Harris, Steve McMahon

CHRIS MATTHEWS, HOST:  If you can‘t beat ‘em, tax ‘em.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight: Tax them to death!  Like a mob of torch-wielding villagers from a Frankenstein movie, members of the U.S. Congress clamored (ph) in vengeance today.  Grabbing their most frightening weapon, the power to tax into submission, they slung it at the bonus boys of the American International Group, AIG.  With the Democrats scrambling in unison and the Republicans voting every man for himself, the House of Representatives today told the bail-out bonus takers, If you won‘t give the money back, we‘ll take it back.

The House passed a bill to tax the bonuses at 90 percent.  Why‘d they

stop at that?  Well, if it‘s constitutional to pass a law punishing someone

and let‘s admit that‘s what the Congress is doing here—for something they‘ve already done, why not hit them for all the money?

Well, that‘s the question.  Is it constitutional?  The Constitution says Congress can‘t pass a law that‘s ex post facto, can‘t pass a law nailing someone for something that‘s already been done.  Isn‘t that what the House just did?  Would the courts ever permit this to become law, what was passed today?  Would the U.S. Senate even agree to it?  And if the Republicans are right, this whole thing is a cover-up of the failure to stop those AIG bonuses from getting issued in the first place.


REP. JOHN BOEHNER (R-OH), MINORITY LEADER:  We can put this resolve clause in this phony resolution here, so all members can cover their rear ends that they‘ve come to the floor and they have voted to stop all of these—this money—these bonuses going to these AIG executives.  This is a joke, and we ought to treat it as such.  Vote no.


MATTHEWS:  This is a joke?  Let‘s hear from Congressmen both sides.

Also, what‘s the president doing in the midst of all this fire?  How do we explain his road show of town halls and radio interviews and the “Tonight” show tonight and “60 Minutes” on Sunday and the big primetime press conference set for next Tuesday?  Well, I have a theory.  I think he‘s got a big mission, something he learned from Ronald Reagan: Get out there with the people, sell your agenda, then get a big all-or-nothing vote from Congress as soon as you can while you‘re still hot.

Well, call it the selling of the budget, but it‘s really more than that.  Is Barack Obama out there in America selling the people, and thereby the Congress, on agreeing to a fast up-or-down vote on his whole program, on his whole program of health care, energy and education?  Is he preparing us for something called “reconciliation,” a big Senate vote that can‘t be filibustered, no matter what the Republicans would like?  We‘ll talk to two former members of Congress who will tell us if it just might work.

Also, back to AIG, turning lemons into lemonade.  Can either Democrats or Republicans make AIG a win for their side?  We‘ll talk to the HARDBALL strategists about that.

And we‘ve got a HARDBALL awardee tonight, a big one.  It goes to an all-around good guy with a generous heart who remembers where he came from and how he got here, in a car.

And we begin with those torch-wielding villagers streaming now down from Capitol Hill.  U.S. Congressmen Steve Israel is a Democrat from New York and Dan Lungren is a Republican from California.

Well, I‘m rather hyped up by this because I love constitutional law, gentlemen, and I love the courts sometimes telling the Congress they‘re off base.  Congressman Israel, do you believe it‘s legal, constitutional, proper for the U.S. Congress to tax somebody, to punish them into submission with a 90 percent tax cut—or tax rate on something they did before the law was passed?

REP. STEVE ISRAEL (D), NEW YORK:  We are not taxing people to punish them, we are taxing people to get the money back.  The only way that we‘re going to recover that money for the taxpayer is through the tax code.  Chris, you can‘t legislate it back.  You can‘t debate it back.  You can‘t wish it back.  The only way that we can get that money back is by using the tax code.  It is absolutely constitutional.  No court...

MATTHEWS:  You took an oath to the Constitution.

ISRAEL:  No court...

MATTHEWS:  Do you believe this is constitutional?

ISRAEL:  Absolutely.  I took an oath to the Constitution, and nothing...

MATTHEWS:  Constitutional...

ISRAEL:  ... is more important to me.

MATTHEWS:  ... to punish somebody for something they did before the law was passed?

ISRAEL:  Not only are we not punishing people...

MATTHEWS:  You‘re not?  A 90 percent tax...

ISRAEL:  What we are doing is we‘re using...

MATTHEWS:  ... is a punishment.

ISRAEL:  We‘re using the tax code to recover that money for the taxpayer, and we‘re doing it in the present year.  We‘re not doing this retroactively.  We‘re using this year‘s tax code to recover money that is being dispersed this year.


ISRAEL:  No retroactivity.

MATTHEWS:  Would you stay in office if this was declared unconstitutional?

ISRAEL:  Of course.

MATTHEWS:  Would you admit that you broke the Constitution?

ISRAEL:  I would—I‘m not breaking the Constitution.  No court...

MATTHEWS:  No, if the Supreme Court declared this unconstitutional...

ISRAEL:  No court...

MATTHEWS:  ... what would you say then?

ISRAEL:  No court has ever ruled...


ISRAEL:  ... that taxes are a taking.

MATTHEWS:  OK.  Even 90 percent?

ISRAEL:  Correct.

MATTHEWS:  OK.  Begun the campaign here.  Mr. Lungren, your witness.

REP. DAN LUNGREN ®, CALIFORNIA:  Well, Chris, look, I think it‘s outrageous, these bonuses and so forth.  There are legal ways for us to proceed.  We started to do that in Judiciary Committee yesterday by applying bankruptcy law to this circumstance, which we think could be done.  You can put conditions on any additional funds to be taken by AIG, and they do need additional funds.  There are legal ways of doing it.

What we did today was the precise definition of a bill of attainder that is prohibited by the Constitution.  You cannot punish an individual or an easily ascertainable group of people without a trial.  In other words, our Founding Fathers wanted to make sure that we couldn‘t have legislative punishment.

And that is a question of the balance of powers.  It‘s a protecting people from a Congress that made a mistake, that just a couple of weeks ago passed a provision that said they were protecting these bonuses, if people will recall, by looking at that in the stimulus.  And now when we hear—when those who voted for it hear about how folks back home don‘t like it, they‘re willing to shred the Constitution in order to look good.

I did not take my oath of office to shred the Constitution, I took my oath of office to protect the Constitution.  And all you had to do was listen to the rhetoric on the floor.  This is supposed to punish.  That is exactly what they were talking about.  We can‘t do it.

Why not spend a couple of weeks figuring out how we can get the money back?  And there are at least a couple of way that will not violate the Constitution.  It ought to be worth that much of our time.  We didn‘t need to leave here today.  We could have stayed today, tomorrow...

MATTHEWS:  OK.  Why did half your party vote...

LUNGREN:  ... over the weekend.

MATTHEWS:  Why did half your party vote for what your leader called a joke?  Half of your party, 85 members of the House who are Republicans, voted for what John Boehner, your leader, called just on TV here a second ago a joke.  I think he also called it a circus.  Why did half your people vote for either a joke or a circus?

LUNGREN:  You got to ask...

MATTHEWS:  Or for what you say is unconstitutional, which is worse.

LUNGREN:  You got to ask them why they did it, Chris.  All I can tell you...


LUNGREN:  ... is in my heart, I believe it is unconstitutional and...

MATTHEWS:  OK, let‘s take a look...


MATTHEWS:  OK.  I want Congressman Israel, who‘s sitting right in front of me...

ISRAEL:  I—I—I got...

MATTHEWS:  He‘s done me the courtesy of coming here.  I want you to respond to these.  Just pick up on what these Republicans have to say right now.


MATTHEWS:  Go at it when they come back.  Here they are.


REP. DAN BURTON ®, INDIANA:  And now you‘re saying if we don‘t vote for this cover-up that you‘re coming up with, we‘re the bad guys.  We‘re not.  The American people won‘t be fooled by this.

REP. MIKE PENCE ®, INDIANA:  It‘s a transparent attempt to divert attention away from the fact that Democrats in Congress and this administration made these bonus payments possible.

REP. STEVE LATOURETTE ®, OHIO:  ... Title 7, section 111, sub-paragraph iii—three little “I‘s.”  And somehow, when the bill left the Senate, it had the Wyden-Snowe language that said no executive compensation and it taxed it.  When the bill comes out of the conference committee, it has this paragraph in it that makes possible the bonuses that people are so shocked about today.


MATTHEWS:  Congressman, your party has the majority and you passed the stimulus bill, which basically protected these bonuses.  How do you explain that?

ISRAEL:  Well...

MATTHEWS:  Now you‘re going after them and taxing them in this circus here.

ISRAEL:  Let me tell you what.  If people in politics and government are going to take credit for when things go right, we ought to take responsibly for when things went wrong.  Something went wrong here.  I‘m happy to take some responsibility for it...

MATTHEWS:  You‘re a member of Congress.  Can you find out...

ISRAEL:  But I don‘t want to...

MATTHEWS:  ... what happened in the conference?

ISRAEL:  But I don‘t want to...

MATTHEWS:  Do you know who did it?

ISRAEL:  Absolutely.  We always...

MATTHEWS:  Chris Dodd said he was pressured by the Justice Department to do it.

ISRAEL:  I don‘t know why Chris Dodd did it.  He was wrong for doing it.  I‘ll be the first person to say it.  But look, when something breaks and you bring it back to the store to get your money back, you don‘t stand there saying, I want an investigation of why this broke.  You say, I want my money back.  That‘s what we‘ve done.

Now, let me just say one other thing because I‘ve—I take umbrage when people who spent eight years defying our Constitution, saying it was OK to torture, OK to spy on innocent Americans, OK to surrender all of our freedoms, suddenly say that they‘re now in contention to become the president of the Capitol Hill chapter of the ACLU, that‘s fundamentally wrong and absolutely hypocritical.

LUNGREN:  Hey, Chris, wait a second.  I—I...

MATTHEWS:  So two wrongs make a right.

LUNGREN:  I don‘t appreciate someone calling...

ISRAEL:  No, no.  I‘m just saying these people are suddenly saying...

LUNGREN:  ... me hypocritical!


LUNGREN:  Wait a minute.  I was the attorney general of California.  No one suggested I tried to tear up the Constitution.  So don‘t get off on that.  I wasn‘t here for eight years.  I‘ll gladly defend my vote.  Don‘t try and divert attention on what we‘ve talking about.  You have supported something which specifically is prohibited by the Constitution.  It‘s called a bill of attainder.

You may not like what they did.  You may want to punish them.  I want to punish them.  We‘re not allowed to do that under the Constitution.  We can get this money back in other ways that are legal and Constitutional.  If it‘s such a big deal, why did we have to pass it with just an hour of debate...


MATTHEWS:  Focus on one thing at a time.  Are you willing to bet this Constitutional?  Because Congressman Lungren says it‘s not.  I believe it‘s not constitutional because I remember my high school civics book.  I wasn‘t an attorney general of California.  I‘m not an attorney.  But I remember we all learned in civics you can‘t have a bill of attainder.  You can‘t have an ex post facto bill.  The purpose of your legislation is not to find somebody you don‘t like and passing some confiscatory tax against them and say that‘s not punishment!  A 90 percent tax bill...

ISRAEL:  It is not punishment.

MATTHEWS:  A 90 percent tax bill is a punishment.

LUNGREN:  We passed an alternative—we passed an alternative out of the Judiciary Committee yesterday with Republican and Democratic support.  There is an alternative there.  There‘s also a separate Republican alternative, which conditions all future payments to AIG on the fact that they get the money back from the employees and return that to the government.

ISRAEL:  Dan, you...

LUNGREN:  There are two ways to deal with this...

ISRAEL:  The Judiciary Committee passed a bankruptcy measure.  And we‘ll look at that bankruptcy measure.  But the fact of the matter is that there...

LUNGREN:  I‘m glad you acknowledge we passed it.

ISRAEL:  ... are firms that took taxpayer—that took taxpayer money and converted that money into big bonuses for people who took that money and ran.  You cannot...

LUNGREN:  We all agree on that!

ISRAEL:  ... legislate the bonuses back.

LUNGREN:  We all agree on that!

ISRAEL:  You can‘t debate the bonuses back.  You can‘t even have a constitutional argument on this...

MATTHEWS:  If it‘s constitutional, Mr. Israel...

ISRAEL:  ... on the bonuses, you can only tax it back.

MATTHEWS:  ... why didn‘t you tax 100 percent and just admit what you‘re doing?  Why 90 percent.

ISRAEL:  Well, we‘re trying to—the Senate had numbers at 90 percent and we‘re trying to come to some agreement and consensus with the Senate.

MATTHEWS:  Do you think the Senate will go along with this?

ISRAEL:  I sure hope they will.

MATTHEWS:  Do you think they will?

ISRAEL:  Well, we made an offer and we put it at numbers that they had suggested.  There‘s no reason for them not to.

MATTHEWS:  Mr. Lungren, Congressman, do you think the Senate, which has six years to deliberate these things, would agree to you believe is unconstitutional?  Will they do this in the same rush of sentiment we saw on the House floor today?

LUNGREN:  I hope not, and I hope they will not be stamping their feet

the dirt on their feet on the Constitution as they run away from this issue.  We ought to face this issue fairly.  This Congress on the Democratic side bringing us this bill did the wrong thing protecting these bonuses just a few weeks ago.

MATTHEWS:  All right.

ISRAEL:  We protected the taxpayer.

LUNGREN:  Let‘s face up to the fact that—let‘s just face up to the fact that we made a huge mistake, the Congress did.  The administration has not been as vigilant as it should be.  Let‘s all of us agree on that...


LUNGREN:  ... and then try and at least follow the Constitution.

MATTHEWS:  OK.  I‘m going back to my thought, which is pre-intellectual.  I keep thinking of those villagers in the original Frankenstein movie, all with their torches coming down from the town, all with the torches looking for the bad guy, and the bad guy‘s at AIG.  And they‘re just saying, Tax them at 90 percent!  That is a bill of attainder.

But thank you, Congressman Israel...

ISRAEL:  Thank you.

MATTHEWS:  ... for coming here, which is always a sign of great respect for HARDBALL.  And we usually root for the guy that shows up here, but this time, I‘m with Dan Lungren.  Mr. Attorney General, you‘re right.

Coming up: President Obama‘s back in campaign mode.  He‘s out doing a media blitz that includes Jay Leno tonight, “60 Minutes” on Sunday, a big press conference on Tuesday.  What‘s he up to?  I have a theory.  He‘s not showing—he‘s not doing a road show just to become popular.  I think he wants a big up-or-down vote on his budget, a reconciliation fight, and he only wants 50 Democrats in the Senate to pass it and he‘s and going for broke.  Big casino coming from Barack Obama.  We‘ll test that theory in tonight‘s HARDBALL.  Back in a minute.


MATTHEWS:  We‘re back on HARDBALL.  President Obama‘s taking a few more questions at that town meeting out in Los Angeles.  Here it is.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  ... weeks, maybe even next week, we are going to be in a position to sign a national service bill coming from the House and the Senate.  And as part of this, what we‘re going to be doing is expanding programs like the Peace Corps and Teach for America and other mechanisms, other avenues where you can make a decision as a young person to teach for three years or to serve in the Peace Corps or to serve in the foreign service, or you know, volunteer in some fashion in your communities and help finance your education in the process.

And I think that there are young people all across California, all across America who are interested in that opportunity, and I want to give that opportunity to you.


OBAMA:  All right.  OK.  This is the last—last question.  You know, I‘m going to—hold on.  You know, on the last question, I think—hold on a second.  I think I want to call on—I want to call on a young person, a student.  But it‘s got to be a guy.  It‘s a guy.  No, no, you‘re not that young.  You sit down.


OBAMA:  That guy right there, that young guy in the T-shirt, in the T-shirt or in the tie—in the tie.  This young man right here.  That guy right there.  All right, you got to stand up, though.  You look good in that tie.


UNIDENTIFIED MALE:  Hi, my name is Ethan (ph).  President Obama, our school is in big trouble because of budget cuts.  Our whole -- 25 of our teachers already have been fired to get pink slips.  And the whole school, my class, we made this.

OBAMA:  Oh, you made—you made—are those letters for me?


OBAMA:  What‘s your name?

UNIDENTIFIED MALE:  Ethan Lopez (ph).

OBAMA:  Ethan Lopez?  How old are you, Ethan?


OBAMA:  Eight?  So what grade are you in?


OBAMA:  Third grade.  Do you like school?


OBAMA:  Yes, you do?  Is that your mom next to you?


OBAMA:  Yes?  She looks very nice.


OBAMA:  The—well, let me—as I said before, Ethan, we‘re going to do everything we can to protect our teachers.  We already passed a law in Washington that‘s going to give more money to the state to help keep teachers in their jobs.  And one of the things that we didn‘t talk about earlier, we‘re also going to be putting more money into school construction because there are a lot of overcrowded schools and overcrowded classrooms that aren‘t wired for the Internet effectively.  And we are going to make sure that we invest in that, as well, because I want you to get a first class education.

What do you want to be when you grow up?  Have you decided yet?


OBAMA:  What would you like to be?


OBAMA:  A cop?  That‘s what I‘m talking about!


OBAMA:  All right.  Well—well, I can tell that you will be an outstanding police officer.  Your mom‘s proud of you.  We‘re all proud of you.  Give Ethan a big round of applause.  Thank you, everybody.  God bless you.


MATTHEWS:  Well, that‘s President Obama, of course, finishing up his town meeting out in Los Angeles this evening.  Moments ago, he addressed the AIG bonuses issue.  Let‘s take a listen to what he said.


OBAMA:  I understand how mad everybody is about this AIG bonus business.  I understand that.  As I said before, I‘m mad.  And even though I didn‘t draw up these AIG contracts, my White House didn‘t, it‘s my responsibility to fix the system.  But fixing the system requires us understanding that if banks are not solvent, if they are not lending, then businesses are not going to be able to invest, we are not going to be able to create jobs.

And we can be as mad as we want, but the fact of the matter is, we have got to work through this huge mess that was made in the financial system.  It‘s going to cost some money.  It‘s not going to be pretty.  People are going to be frustrated.  And we are going to get it done. 


MATTHEWS:  Well, there you have it. 

We‘re going to have more on President Obama and his attempt to score a first-round knockout against the Republicans coming up in the show. 

Up next:  It‘s time for the HARDBALL Award tonight.  And, this time, it goes to someone who‘s lending a hand and a heart and a whole lot of laughs to some people who could really use it. 

You‘re watching HARDBALL, only on MSNBC.  


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

President Barack Obama‘s on “The Tonight Show” tonight.  This is the first time a president has done so while in office.

But catch John F. Kennedy, still a candidate, Richard Nixon before his comeback in ‘68, and candidate Ronald Reagan when he was still California governor all doing their time on “The Tonight Show” couch. 


JOHN F. KENNEDY, PRESIDENTIAL CANDIDATE:  The United States is really the only guardian at the gate against the communist advance. 



RICHARD NIXON, PRESIDENTIAL CANDIDATE:  Let me tell you your assets, if you‘re young, 42, right? 


NIXON:  You come over on television like gangbusters.  And, boy, I‘m the expert on how important that is. 


CARSON:  You‘re not going to lend me your makeup man, are you? 


NIXON:  No.  I‘m going to lend him to Lyndon Johnson. 





CARSON:  Yes, we have just finished 10 years.  We are starting our 11th


MATTHEWS:  Wow, which brings us to the newest HARDBALL Awardee. 

He‘s a guy where he came from and how he got where he got, in a car.  What Henry Ford was to the beginning of the 20th century, Jay Leno is to this early 21st century, the man we think of when we think of the American automobile.

Here he is putting his to work for the people now having a very tough time. 


JAY LENO, HOST, “THE TONIGHT SHOW WITH JAY LENO”:  One of my favorite places is Detroit.


LENO:  And there are so many out-of-work autoworkers, people who work hard their whole lives.  They‘re saving their money.  And I thought, why don‘t we go to Detroit and do some shows, do a free show? 

And, like I say, if you‘re an autoworker and you have been laid off

and you haven‘t just gotten out of the house, because there‘s nothing to do

not that I‘m the greatest comic in the world, but it‘s free.  If you don‘t like it, get your money back, OK?


LENO:  So...


MATTHEWS:  Well, that was Jay Leno last week announcing his free show coming up in the Motor City.  He‘s since announced he‘s doing a second show, all to benefit and bring attention to the unemployed men and women who have lost their jobs in that part of the country. 

Jay is a guy who not only loves cars—just look at the collection he has—but cares about the people who have spent their lives making those cars.  Talk about traditional American values.

And an auto executive once famously said, what‘s good for General Motors is good for America.  Jay Leno has reminded us that what‘s good for the men and women who build those cars is good for America.

And, for that, we humbly declare Jay Leno, host of “The Tonight Show,” host tonight of President Barack Obama, a HARDBALL Award winner. 

Up next: President Obama‘s media blitz.  Why is he pushing his new budget so hard?  Is he trying to wrap it all up, all his ambitious proposals, into one big take-it-or-leave-it vote in the Congress?  Is he trying to force the Republicans hands?  I think so.

You‘re watching HARDBALL.  And we‘re going to talk about it in just a minute on MSNBC.  


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

Stocks fell for just the second time in eight sessions.  The Dow Jones industrials lost 85 points.  The S&P 500 was down 10, and the Nasdaq shed seven points -- 646,000 newly laid off workers filed first-time jobless claims last week.  That‘s fewer than the week before, but the number of people continuing to receive unemployment benefits rose to another record high of nearly 5.5 million. 

Seeking to stabilize the auto industry, the Treasury Department announced it will provide up to $5 billion in financing to troubled auto parts suppliers.  Parts-makers employ about 600,000 people nationwide.  And that‘s many more than the Big Three U.S. automakers employ. 

Mortgage rates fell to near record lows a day after the Federal Reserve announced it would buy an additional $750 billion in mortgage-backed securities.  Thirty-year fixed rate mortgages dropped nearly a half-point to about 4.75 percent. 

And oil surged $3.47, closing at $51.61 a barrel. 

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


MATTHEWS:  Welcome back to HARDBALL. 

President Obama‘s trying to ride the wave of public outrage over AIG‘s bonuses by launching a campaign-style media blitz.  It‘s under way right now.  He held a town meeting again today in California.  He just wrapped up that second one, as I said.

And, tonight, he‘s going to be the first sitting president in office to go on “The Tonight Show,” hosted by Jay Leno.  So, is the president risking overexposure, or is he smart to use the bully pulpit to harness public anger over AIG and push this economic program of his? 

Let‘s bring in NBC‘s White House correspondent, Chuck Todd—he‘s also our political director—and Chris Cillizza of TheWashingtonPost.com. 

First you, Chuck. 

What‘s the bonanza about?  Why the traveling road show at this point in time? 

CHUCK TODD, NBC NEWS POLITICAL DIRECTOR:  Well, the whole push, when you put the media thing together—and I think that‘s smart that you put in together as a package—these town halls—it‘s very similar, actually, to what they did with the stimulus.  We have the town halls.  We have got “Jay Leno,” “60 Minutes” interview Sunday, prime-time press conference on Tuesday. 

So, this is a five-day blitz of sorts—actually, a six-day blitz, if you start back from last night in the town halls.  And it is all about pushing.  On one hand, yes, he is having to deal with the AIG stuff at the top.  But the message inside is all about the budget. 

He wants to push this budget, start a campaign.  One other event, actually, I forgot to include in this bonanza, and that is the Democratic National Committee, which is now a fully functioning arm of the White House, the political arm of the White House, on Saturday is doing an event around the budget, trying to get that powerful 13 million-strong e-mail list of Obama‘s from the campaign to get involved in this campaign to pass the budget. 

Now, you sit there and say, geez, the budget, who cares about that as

far as making it a campaign?  Well, this is why he cares, because health

care and energy, two of his biggest proposals that he‘s making—and some

of them are very controversial, going to be very tough fights on the Hill -

he wants to make part of the budget fight.

So, this is about getting lots of his agenda passed in a very short period of time, Chris. 

MATTHEWS:  OK.  I like the fact that you picked out something.  I noticed it, too, at the time he referred to going out to California yesterday in that stakeout on the South Lawn.

TODD:  Yes. 

MATTHEWS:  I‘m going to California to talk to?

TODD:  Voters. 

MATTHEWS:  Voters. 

TODD:  How about that?  They‘re not people...


MATTHEWS:  He‘s still—isn‘t that—he is not talking to people.

TODD:  He‘s still in campaign mode.

MATTHEWS:  He‘s talking to voters.  Here he is. 

TODD:  That‘s right. 

MATTHEWS:  Check out something President Obama did say before he left for California.  Let‘s watch. 


OBAMA:  We‘re going to have a town hall meeting there in which we‘re going to be answering questions from voters about a whole host of issues. 


MATTHEWS:  Chris, he hesitated far a nanosecond there, and then he said what the name of the game is.  He‘s not talking to citizens.  He‘s not talking to Californians.  He‘s talking to voters, which raises the question, what is the mission? 

CHRIS CILLIZZA, “THE WASHINGTON POST”:  Well, the mission is, I think, persuasion, Chris. 

And, you know, Chuck mentioned this huge organizing campaign that the arm of the Democratic National Committee is undertaking.  You‘re talking about a huge canvass over the weekend.  You‘re talking about urging phone calls to specific members of Congress to advocate for the budget. 

This is all going back to the lessons learned during the campaign.  Remember, Barack Obama has a relatively short shelf life on the national stage, so the lessons he‘s learned are largely the lessons he learned in that two-year campaign for president.

One of them was, go on as many fronts as possible, radio, television, Internet, e-mail.  Push on all of those fronts all at once, and bring that big grassroots army that he put together during the campaign behind him.  So, I think you are just seeing it recreate—excuse me—recreated on a policy front, exactly what we saw on a political front six months ago. 

MATTHEWS:  Well, here‘s President Obama today talking about the criticism he‘s taken, the heat he‘s taken, for going on “Jay Leno” tonight. 


OBAMA:  Somebody was saying the other—today, I think, that I shouldn‘t be on “Leno.”


OBAMA:  ... I can‘t—I can‘t handle that and the economy at the same time.



OBAMA:  They...


OBAMA:  Listen, here‘s what I say.

I say our challenges are too big to ignore. 


OBAMA:  The cost of our health care is too high to ignore. 


OBAMA:  Our dependence on oil is too dangerous to ignore.


OBAMA:  Our education deficit is too wide to ignore.



MATTHEWS:  Well there you have it.

Chuck and Chris, here‘s my theory.  It‘s perhaps more than a theory, having talked to some people today.  Here‘s what I believe. 

I believe this president has learned from Ronald Reagan. 

You talked about his shelf life, Chris.  He knows it‘s short.  He is in the 60s right now.  He ain‘t going to be in the 60s come this fall.  He wants a tough up-or-down vote on reconciliation for all the health care, for all the climate change stuff and the education stuff, all packaged into one bill that goes up or down.  Under budget rules, he doesn‘t need 60 votes if he needs it.  He needs 50, plus the vice president‘s vote. 

If he wins that vote, no matter what else happens later, he is a successful legislative president. 

Your thoughts, Chuck? 

TODD:  Well, I‘m going to go with one more. 

You know, Chris brought up and talked about how the president is learning lessons from the campaign.  But there are people around the president that are drawing lessons from the first Clinton term.  And I was glad you brought up the Reagan model as far as that first term was concerned in ‘80.

And that is, the lesson that Rahm Emanuel, I think, learned—and he‘s the chief of staff—he‘s the guy that is—helping to orchestrate this strategy, getting this stuff passed in Congress—the lesson he learned from the Clinton years is, boy, you get about 70 percent of your agenda in that in that—in your first term done in that first year. 

That first year of the first term of your presidency is when you‘re going to get most of your—you have most of your political capital and be able to use it on Capitol Hill. 

That‘s part of the other thinking in this, is, get it done, get it done now, because there may not be a tomorrow.  I mean, you don‘t know when you‘re going to get dragged down, either because something distracts you.  I mean, who knows what sparks up.  You never know if this problem with Mexico becomes such a big deal that it takes away from what he‘s doing, from what he wants to get done.

So, if you don‘t concentrate and get everything you can get done in that first year, and, frankly, in that first nine months, it‘s going to be harder to get it done in the rest of those either three years or seven years. 



MATTHEWS:  Chris, is somebody going to talk him out of this?  Is somebody going to come along...


MATTHEWS:  ... and caution him and say, don‘t upset the apple cart; take it slow; you might get health care through next year or the year after; you might get energy, climate change done some time later; don‘t risk going up or down on a reconciliation vote?

Or will he have the stuff, the guts, the risk-taking potential to put it all on the line and say, if I don‘t get it passed this year, as Chuck said, I probably will never get it passed; so I might as well go for it; 50 votes should be enough; I will risk a filibuster, and I definitely can beat a filibuster if I use the budget process?

CILLIZZA:  Well, you know, Chris, I will just again draw back on the -

the last couple years of Barack Obama‘s life. 

It probably would have not been seen as a smart political move when he first started about running to challenge the first family of Democratic politics, you know, Hillary Clinton, this huge front-runner.

So, I think he‘s going to learn a lesson that, sometimes, the conventional wisdom can be wrong. 

The other thing is...


MATTHEWS:  So, when you‘re hitting three-pointers, keep shooting? 

CILLIZZA:  Exactly. 

And, in interviews with any number of media organizations, Obama has made clear—and I think he actually believes this—I don‘t think he‘s just paying lip service to it—he thinks he was elected president to do big things.

And to Chuck‘s point about Bill Clinton, you know, Bill Clinton got picked apart in some ways by smaller things.


CILLIZZA:  He never had the ability to do huge things.

I think Barack Obama sees that this is a mandate.  These 365 electoral votes he got is mandate to do big things.  And he‘s going big or go home, in some ways, which is...

MATTHEWS:  Yes, well, let‘s...

CILLIZZA:  ... he‘s going to—he‘s going to stand or fall based on trying to do major, major things.

And, so, I think he probably pushes it. 

MATTHEWS:  Well, let‘s take a middle case here.  Chris, let‘s take a middle case.

Chuck, and you start here.

TODD:  Yes. 

MATTHEWS:  George W. Bush won without winning.  He never got a majority of the popular vote. 

TODD:  That‘s right. 

MATTHEWS:  He didn‘t even—he didn‘t even win, really, in the Electoral College without the help of the Supreme Court.  Yet, he marched in there and demanded an up-or-down vote on a huge tax cut which was ill-timed, it wasn‘t appropriate, but he wanted it, and he was president, so he did it. 

It doesn‘t seem to be such a—a stretch for this new president, who won with a majority of the vote...

TODD:  Right. 

MATTHEWS:  ... and a huge electoral win...


MATTHEWS:  ... to come in here and say, wait a minute.  I won this vote.  John Boehner didn‘t win this election. 

TODD:  Right. 

MATTHEWS:  I‘m taking him on.  I‘m taking on Mitch McConnell. 

TODD:  But, you see, you brought—you brought up a great example.

Bush, he never could have gotten that tax cut through if he didn‘t do it in that first year. 

MATTHEWS:  Right. 

TODD:  He never—none of the other seven years would he have had the political capital and being able to—to strong-arm Congress. 

Remember, he went on that big campaign.  I remember, the first year, he went around and selectively did town halls in the states of key conservative Democratic senators, trying to win over their votes. 

I mean, that‘s what you do in your first year.  That‘s when you have your mandate, whether it‘s 49 percent...


TODD:  ... of the vote or 53. 

CILLIZZA:  And, just Chris, real quickly, remember, rhetorically, from Obama and his senior aides, what did they do?  They did this in the economic stimulus fight, and they‘re starting to do it now.

When it gets contentious, they just subtly remind everyone, hey, we won, so we sort of get to make the choices here.  The minority doesn‘t get to make the choices, 365 Electoral Votes means we call the shots. 

I think you‘re going to see more and more of that as the budget fight heats up.

MATTHEWS:  Well, let‘s look at schedule.  In a couple of weeks, the Senate and the House will pass a budget resolution which is nonbinding, but which will agree, I‘m told, with basically all of the objectives of this president. 

TODD:  Sure. 

MATTHEWS:  . including health care, energy, and education, laying out the budget, including that big $600 billion to be set aside for health care. 

Then he asked for reconciliation, he gets Congress to enact the legislation to implement all of that.  He gets that vote, he only gets 57 votes, he doesn‘t get 60, but he jams them and says, damn it, up or down, I want reconciliation, you‘ve got to do this under the budget act. 

He has a big fight with the Republicans and he moves on.  Is this credible?  Is this a credible prospect for this new president, Chuck? 

TODD:  I think it absolutely is.  I think that‘s where they‘re going.  You know, in understanding the thinking of this White House, and, frankly, the thinking of how a lot of the Democrats who are working for the president, who all have experience—recent experience in the Senate, you know, it is really only a phenomenon in the last decade that we went to this you need 60 votes in the Senate. 

MATTHEWS:  Yes.  I hate it. 

TODD:  It didn‘t used to be this way, and a lot of these guys—remember who is around the president, a lot of former Senate staffers, a lot of guys who work for—worked for the Senate there and have—really just don‘t like the filibuster rule that has just turned everything into this magic 60-vote push. 

MATTHEWS:  Right. 

TODD:  And I think there is going to be a lot of will and probably by the president himself to say, hey, if you‘ve got 56 or 57 votes on your side, why is it that you can‘t get stuff passed? 

MATTHEWS:  Good question. 

TODD:  It is not as if you ask for a 60 percent majority to win the presidency. 

MATTHEWS:  Thank you very much, Chuck Todd.  Thank you, Chris Cillizza. 

CILLIZZA:  Thank you.

MATTHEWS:  Gentlemen, thank you both for your smarts. 

Up next, how should Democrats and Republicans harness this populist rage?  We‘re going to talk to two strategists coming back here, Steve McMahon and Todd Harris.  They‘ll be back here.  This is HARDBALL, only on MSNBC.


MATTHEWS:  Coming up, “The Tonight Show,” “60 Minutes,” a couple of town halls, and a primetime press conference, what‘s really behind President Obama‘s media blitz, I think it‘s the budget, I think he‘s going for big casino, a first round knockout.  We‘ll see.

HARDBALL returns with “The Strategists,” after this.


MATTHEWS:  We‘re back with the “Politics Fix.” There‘s no doubt the AIG bonuses stoked up a lot of fire out there, a lot of populist rage and tonight the U.S. Congress was seen marching down from Capitol Hill with their torches going after the AIG bonus boys.

The question is, who is this going to work for and which political party is going to win after all of this is over?  “The Strategists” join us now.  Steve McMahon is a Democratic strategist, and Todd Harris is a Republican strategist. 

Todd Harris, you‘re first.  Your party raised the issue—the constitutional issue.  You said this idea of going after taxing these guys is malarkey, unconstitutional, it will be seen as such. 

TODD HARRIS, REPUBLICAN STRATEGIST:  Well, it is.  First of all, it is unconstitutional.  Second, it‘s dumb politically because all of this is just made to cover up for the fact that Democrats who voted for the stimulus bill, which by the way they never read... 


HARRIS:  . and this is a great.

MATTHEWS:  Well, you can say that about anything that is passed on Capitol Hill.  What a cheap shot.

HARRIS:  Try explaining that to your voters. 

MATTHEWS:  I know. 

HARRIS:  It‘s not my fault, I never read it. 

MATTHEWS:  But you know they don‘t.  They have these committee conferees, the experts in the Congress to tell the regular members what is in there, what is in there. 

HARRIS:  And I would be willing to say that this is the largest bill that has ever passed that was not read. 

MATTHEWS:  I know.  It‘s hopeless.  It is their job. 

HARRIS:  Yes.  And you know what?  When you don‘t read it, and you find out later that there are these little nuggets in there like this one that come back to bite you, all of those Republicans that got vilified for voting in unison against it, sure looking pretty smart right now. 

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  As usual, as usual, Todd is half right.  It‘s probably unconstitutional, but it is not political malarkey.  It is substantive.

MATTHEWS:  It‘s show business.

MCMAHON:  It‘s—well, it‘s not show business.  Symbolically it‘s very important.  It‘s important for the Congress to do what it can do because it might not be unconstitutional.  I happen to think it probably is.

MATTHEWS:  Well, the argument is that you can‘t pass a bill that targets something that was already done or a particular person. 

MCMAHON:  Right.

MATTHEWS:  In this case, I used the ex post facto thing, you can‘t do it because it says in the Constitution no bill of attainder or ex post facto laws shall be passed.  You can‘t pass a bill about something that was already done, and you can‘t target somebody with a bill. 

MCMAHON:  And it might actually also be an unconstitutional taking.  There are all kinds of constitutional grounds upon which to object.  On political grounds, however, it is interesting because.

MATTHEWS:  By the way, these guys took an oath to uphold the Constitution.  So you‘re telling me they passed something they knew it to be unconstitutional, just for a.


MCMAHON:  No, I‘m telling you it‘s arguably unconstitutional.  I think it is.  They can certainly say, we don‘t know for sure, that‘s why we have a court system.  And guess what, let‘s go. 

MATTHEWS:  No, no. 


MATTHEWS:  Congress is supposed to observe.

MCMAHON:  . would have been better off.

MATTHEWS:  . the Constitution.  The court is supposed to observe the Constitution.  The president is supposed to observe it.  And the courts are the final arbiter.  But nobody in Congress can say, I‘m going to pass this crap and see if it sticks to the wall or not. 

MCMAHON:  But hold on, Chris, hold on.

MATTHEWS:  You can‘t vote like that.

MCMAHON:  Hold on one second, because AIG had the opportunity.. 

MATTHEWS:  They did... 


MCMAHON:  . to say we‘re not going to give these bonuses, sue us.  Congress can pass this law and say, if you think it‘s unconstitutional, take us to court. 

MATTHEWS:  Who is going to win here?  I have a feeling the only winner is, in an isolated case, that‘s the attorney general of New York. 

HARRIS:  New York. 

MATTHEWS:  . because Andrew Cuomo, the son of the former governor, has been a trust-buster, a reformer for years now, and he has got something in his targets here. 

He today got a hold of the list of the names of the bonus guys here.  And he has got to decide whether he wants to release those names.  Would you do it?  Would you release those names to the public and some crazies out there? 


MATTHEWS:  Because the crazies are crazy. 

MCMAHON:  I would have—I have real concerns about releasing those names. 

MATTHEWS:  If somebody gets killed, if some house gets blown up, if something bad happens, besides the kids being humiliated at school, which we know will happen, whose fault is that? 

HARRIS:  Yes.  No, no, I would have real concerns about releasing those names.  I.

MATTHEWS:  Would you release the names? 

MCMAHON:  No, I would not.  But what Andrew Cuomo is going to do is be smart, he is going to threaten to release the names until they give the money back.  I mean, look, these are politicians.


HARRIS:  How can they give the money back, it has already been taxed?

MATTHEWS:  Bluff, you mean he threatens to expose them to violence if they don‘t give the money back?

MCMAHON:  No—I don‘t know what he‘ll do.  I don‘t know what he‘ll do, but there is some reason he and Barney Frank want the names.  And I can assure you it‘s not just to read the names, it‘s to do something with them to try to encourage these people or coerce these people to give the money back.  They want that money back.

MATTHEWS:  Well, isn‘t that terrorism? 

MCMAHON:  No, it is not terrorism.  The United States taxpayers provided this money and the Congress wants it back. 

HARRIS:  I‘ve been struck by—it has been interesting watching Congress today.  Nancy Pelosi completely throwing the White House and the Senate under the bus, saying, we had nothing to do with this, if you want answers on this, talk to them. 

Charlie Rangel today sparring with Norah O‘Donnell, saying, I don‘t

have answers to these questions, you‘ve got to talk to the Senate.  Every -

no one wants anything to do with this.  And it is—Chris Dodd is very lucky that he is not up for re-election this year and it‘s next year. 

MATTHEWS:  Well, let‘s look at the—he got some headlines at home after appearing here last night, The Hartford Courant headline “Dodd‘s Flip-Flop” with the sub-head, “admits role in stimulus bill changes that led to AIG bonuses.” 

The Norwalk Advocate headline is “Dodd Admits Bonuses Role.” And The Norwich Bulletin headline is “Dodd Admits Bonuses Role.”

So any time—that‘s just from coming on these programs last night—this program in particular, and admitting that he was pushed by Treasury officials to put in that language protecting these bonuses. 


MATTHEWS:  And he was told to do it by Treasury, told that legally he has to do it.

HARRIS:  You know, we‘re talking about.

MATTHEWS:  Or else his whole effort to try to stop these bonuses—unless he grandfathered in those bonuses, which were already agreed to before February 11th, he was told he wasn‘t going to be able to stop any of them.  That‘s his argument.

HARRIS:  The list of names that ought to be released is—it‘s less important to know the list of who got the bonuses, I want to know the names specifically of the people at Treasury who supposedly went to Dodd and said, you need to take this language out of the bill. 

MATTHEWS:  Yes, well, they‘re faceless bureaucrats and they might well be civil servants. 

MCMAHON:  I‘m sure they‘re Bush holdovers. 

MATTHEWS:  They could be. 


MCMAHON:  They‘ve got to be Bush holdovers. 


MCMAHON:  In defense of Senator Dodd, because people won‘t remember this, but Senator Dodd put executive pay compensation limits in that bill... 

MATTHEWS:  I know he did. 

MCMAHON:  . that were more stringent than what the White House wanted, what Treasury wanted, what anybody wanted.  So this is a guy who is walking the plank right now. 

MATTHEWS:  OK.  Because Geithner and his people—his people came to him and asked him to do it. 

MCMAHON:  But he doesn‘t deserve it.

MATTHEWS:  We‘ll be right back with “The Strategists” for more of the “Politics Fix” to talk about President Obama‘s road show, which is going to end up on “The Tonight Show” tonight and “60 Minutes,” the whole shebang.  I think he has got a mission here he wants to accomplish.  This isn‘t for ego.  You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  All right.  Back with “The Katzenjammer Kids,” McMahon and Todd Harris. 

Steve, what‘s the road show about?  Barack Obama has—I‘ve never seen a guy do more road shows since, what, “My Fair Lady”?  I mean, this thing won‘t end. 

MCMAHON:  Elvis.


MCMAHON:  I think the road show is about two things.  Number one, it‘s about contextualizing his budget plan.  And it‘s about giving people an under.


MCMAHON:  It‘s helping people understand what the budget is all about.  What‘s in it, why it‘s important, how it matters, and why it will make a difference in their life. 

And the second thing I think is to give people a—some reassurance that he‘s a lot more concerned about what happens to them than what happens on Wall Street.  I mean, right now you‘ve got all of this bailout money that‘s going to Wall Street and people all across America are saying, what about me? 

He‘s out there to explain, this is what‘s about you—I didn‘t say that quite right.  But you knew what I meant. 

MATTHEWS:  No, I think it‘s Reagan.  This is Reagan stuff.  I‘m not from Washington.  I work with you guys.  That‘s Washington.  Rahm Emanuel is Washington. 

HARRIS:  Right. 

MATTHEWS:  Geithner is Washington.  I‘m with you guys out here. 

HARRIS:  It‘s very similar in 2003 when we did the Schwarzenegger recall in California.  We were on Leno.  We were on Oprah. 

MATTHEWS:  That‘s when I met you. 

HARRIS:  That‘s right.

MATTHEWS:  Good job. 

HARRIS:  That‘s right.  Thank you. 

This is taking a message beyond the typical crowd that maybe isn‘t watching the evening news, that is not watching “MEET THE PRESS”.

MCMAHON:  You can say it, HARDBALL.

HARRIS:  That is not watching.

MATTHEWS:  No, “American Idol,” “American Idol.”

HARRIS:  Right, right, right. 

MATTHEWS:  Regular people, yes, I get it. 

HARRIS:  Now it‘s a great tactic.

MATTHEWS:  That‘s not a knock. 

HARRIS:  No, no.  It‘s a great tactic.  My concern for Obama—well, it‘s not my concern, but I hope that his messaging is a lot better than Rahm‘s messaging and David Axelrod‘s.  I mean, Rahm just said that.

MCMAHON:  Oh, stop.

HARRIS:  . AIG is nothing but a big distraction.

MATTHEWS:  OK.  Go with my theory here.  And I want to ask you, do you think he‘s going for the big casino, basically saying, he calls it his budget, what he really means is the whole shebang, health care, education, and energy—cap and trade, that whole thing on climate change? 

I think he wants the Senate to take it up as a big vote, a big bill under the budget rules and pass it up or down.  I think he wants to do that.

HARRIS:  And I think what he‘s trying.

MATTHEWS:  Don‘t you?

HARRIS:  Yes.  What he‘s trying to get voters to believe in is this notion that the White House has been selling which is that you can‘t fix the economy without also fixing energy, without also fixing health care. 


HARRIS:  And I don‘t think that the average person sees all of those things as related together.  The White House is trying to sell it... 

MATTHEWS:  Well, they will if they‘re in one bill and he‘s asking for one vote.

HARRIS:  Right, right, right, up and down, right. 

MATTHEWS:  This is going to be the hottest vote in a long time since the civil rights bills.  If he forces the Senate to vote up or down with 50 votes being enough and says to hell with this 60-vote anti-filibuster requirement, just says no, this is under the budget act, I‘m allowed to pass this thing with 50 votes, and the Republicans raise hell about it, and Harry Reid holds firm, and Dick Durbin holds firm and says, damn it, we‘re going to vote this thing, that‘s why we had this election last November, boy, that is big time.  Don‘t you think? 

MCMAHON:  Yes—no, listen, I think the president.

MATTHEWS:  I love it. 


MCMAHON:  . says that it‘s the job of the president to lead, it‘s the job of the majority to be inclusive, and it‘s the job of the minority to be constructive.  And I think what the Obama administration hopes is that the Republicans will come forward and be constructive and engage in these important matters. 

But I think they‘re perfectly willing to shove it through if they have to.  And if that‘s a reconciliation bill that only requires 51 votes instead of a filibuster in the Senate that takes 60, they‘re willing to do that.  They‘d rather get 60 but they will take 50. 

MATTHEWS:  Do you notice the president never uses the names of the Republican leaders of Congress?  He talks about the big guy, Limbaugh.  He talks about everybody else.  His people, Gibbs, talk about that—members of the Republican cabal out there, like the former vice president, Cheney. 

They act like there is no Republican governing party, there is no Boehner, there is no—what‘s the other guy‘s name?  McConnell. 

HARRIS:  Cantor, McConnell. 

MATTHEWS:  He acts like they‘re not there.  Have you noticed that? 

Isn‘t that a way of diminishing the opposition? 

HARRIS:  He is as good at setting up strawmen as the Bush administration used to be. 

MATTHEWS:  But he ignores you guys that have power and goes after you guys that are just voices.

HARRIS:  Right.  And he sets up the artificial strawmen.  And then they pretty easily.


MATTHEWS:  Well, you‘re laughing because you know it works.

HARRIS:  Yes.  Pretty easily knock them.

MATTHEWS:  Why does he do it?

HARRIS:  Because it‘s far easier to set up Rush Limbaugh as the leader of the party and then knock him down than it is to actually have a substantive debate over, say, the merits of the stimulus package with the actual elected leaders of the Republican Party. 

MCMAHON:  But he‘s doing both.  The reason he‘s smart is because he‘s doing both.  He‘s setting up Rush Limbaugh.


MCMAHON:  . rhetorically, but he‘s up on the Hill—or his aides are up on the Hill all of the time trying to get the Republicans to be constructive, to work with them on health care, to work with them on energy, and the Republicans are saying, no, no, no, no, no.  And so the White House has no choice but to.


MATTHEWS:  You know, Al Franken called Rush Limbaugh “a big, fat idiot,” you know what that got him?  A Senate seat.  Anyway.


HARRIS:  Not yet. 

MATTHEWS:  . Steve—well.

HARRIS:  Not yet.

MATTHEWS:  Steve McMahon, Todd Harris, 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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