updated 5/21/2009 12:59:59 PM ET 2009-05-21T16:59:59

Guests: Howard Fineman, Charlie Cook, Ben Nelson, Saxby Chambliss, Darrell Issa, Adam

Smith, Wayne Slater, Pat Buchanan

CHRIS MATTHEWS, HOST:  Republicans play “Pin the tail on the donkey.”

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews in Washington.  Leading off: Dirty names?  Did somebody forget to tell the Republican National Committee that nobody likes the bully in the schoolyard—you know, the bully who calls people names?  Right now, the RNC is meeting to do just that.  If the wacko wing has its way, the party of Lincoln will rechristen the party of Jefferson the, quote, “Democrat socialist party.”  If the moderates in the Republican Party win the argument today in the name-calling contest, the official resolution this afternoon will merely condemn the Democrats as, quote, being on a “march to socialism.”

Plus, Cheney in the AM.  That‘s right, tomorrow morning, Dick Cheney heads to his favorite haunt, the favorite haunt of neocons, the ludicrously named American Enterprise Institute, to give another jeremiad on the greatness of the Bush administration.  He‘s speaking, by the way, at the same time that President Obama addresses the country.  Will Cheney praise the Senate vote today against closing Guantanamo?

And are the Republicans keeping up their assault up on Speaker Pelosi for saying the CIA lied to her?  Here‘s former Speaker Newt Gingrich nailing her this morning.

(BEGIN VIDEO CLIP)

NEWT GINGRICH ®, FORMER SPEAKER OF THE HOUSE:  I think even Democrats have to be concerned that she clearly is not telling the truth and that she clearly did not tell the truth on Thursday.  And anybody who looks at that press conference, it‘s pretty obvious this is not a calm, confident witness sharing with you her best memories.

(END VIDEO CLIP)

MATTHEWS:  Well, now Republican congressman Darrell Issa wants a criminal investigation into whether the CIA lied to Pelosi.  Did the CIA briefer tell her in September of 2002 that it hadn‘t waterboarded anybody?  Did that CIA briefer know that it had?  Let‘s see how far the congressman wants to take this thing.

Plus: First, Texas governor Rick Perry talked up secession—from the union, that is.  Now his top strategist says the GOP should welcome new voters but not become, in his charming words, a “whorehouse.”  Was this some crude gender reference to Perry‘s primary opponent, Senator Kay Bailey Hutchison?  We‘ll have that and the reaction from the Bailey forces in the “Politics Fix” tonight.

And finally, Rush Limbaugh jocularly gives up his titular leadership of the Republican Party one day—in fact, one day after challenging this network, MSNBC, not to take his noble name in vain.  We‘ll have that in the HARDBALL “Sideshow.”

We begin tonight the Republican effort to rebrand the Democrats as socialists.  “Newsweek‘s” Howard Fineman‘s an MSNBC political analyst and Charles Cook—Charlie Cook—writes “The Cook Political Report.”  Howard, speaking...

CHARLES COOK, “COOK POLITICAL REPORT”:  You said Charles Cook.  I didn‘t know who you were talking about for a second.

MATTHEWS:  I know.  I know.

(LAUGHTER)

MATTHEWS:  Speaking of sports, what is Michael Steele, the Republican Party leader, meeting over at the National Harbour (ph) place a few miles from here, as we speak, trying to figure out what names to call the Democrats?  That‘s an official meeting.

HOWARD FINEMAN, “NEWSWEEK,” MSNBC POLITICAL ANALYST:  Well, in fairness to Michael Steele, he thinks...

MATTHEWS:  Why are you being fair?

FINEMAN:  Well, you know, I have to—I have to bend over backwards to try.  But in this case, this is something that he didn‘t want.  There are some other people who did want it.  But he doesn‘t have the swack (ph).  He doesn‘t have the clout within the party.  He doesn‘t have the respect even of those people in that room over there to just simply say no.  So they‘ve had to go through this whole rigmarole.  People like Haley Barbour of Mississippi, the former RNC chair...

MATTHEWS:  He‘s a heavyweight.

FINEMAN:  ... he‘s a heavyweight—thought this was a ridiculous idea.  He‘s tried to kill the whole thing, but—and if he were left to his own devices, he would have.  And if he‘d been running it, they wouldn‘t...

MATTHEWS:  And he‘s got a brother in the room, right?

FINEMAN:  Yes, he‘s got important people in the room.

MATTHEWS:  Right.  Charles Cook, why—I know for years we‘ve lived with—and it‘s been kind of fun in a weird, sick way, every time you heard a Republican at a Republican convention or a party event, would say the “Democrat party,” rather than the Democratic Party.  And you know, that didn‘t hurt anybody.  It was just a stupid way of saying it, like Bob Dole used to do it all the time.

Now they want to go further and call it the socialist—or the “Democrat socialist party.”  In fact, the Associated Press today got it screwed up and referred to it as they were going to call them the “nationalist socialist party,” the Nazi party.  That was a typo, I guess.

COOK:  You know, this reminds me—I laughed when you used the playground metaphor because that‘s exactly right.  That‘s like in school, when you say, “Oh, your mother wears combat boots.”

(LAUGHTER)

COOK:  I mean, this is just stupid, sophomoric towel-snapping.  And the thing is, you know, Republicans didn‘t lose 54 House seats in two elections, 14 Senate seats, the presidency for nothing.  I mean, people—the American people have effectively put them in a time-out chair.  They‘re not listening to Republicans.  They don‘t really care what they say.

The question is, do Republicans take this time and use it in an effective way to figure out, OK, when we get allowed to rejoin the class, when people start listening to us again, what are they—what are we going to say, and maybe what can we say that might be more appealing than what they were saying the last two elections?

FINEMAN:  Yes, the RNC has no clout, has no place in the landscape. 

That RNC has been replaced by another RNC, which is Rush, Newt and Cheney.

COOK:  You know, Republicans should—they should take a list of everybody that votes for this resolution and say, OK, here‘s a list of people we should never listen to again because these are people that are part of the problem, and look for forward-thinking people, people that put the party in a position where people might actually want to vote for them again.

MATTHEWS:  When did that happen?  I mean, just—I do think there‘s a tremendous opportunity for the “R” party, the Republican Party, right now to be the party of smart numbers.  Simply, Let‘s look at the debt that this new president is piling up.  Let‘s look at the money that‘s being printed out here.  It‘s getting a little scary.  If they would now rechristen themselves the Real Republican Party instead of making names for the Democrats, they might be in business next time around.

FINEMAN:  Yes.  This is one of the big things that was missing from Michael Steele‘s speech yesterday.  He actually had everybody‘s attention.  He said nothing.  He could have mounted, if he‘d done homework and if they‘d really thought things through...

MATTHEWS:  Is he loosey-goosey?

FINEMAN:  I think he‘s lazy.  I think he‘s lazy.

MATTHEWS:  Yes.

FINEMAN:  He‘s known as a terrible organizer.  He ran a terrible campaign when he ran.  You know, he won this in a fluke on the sixth ballot to begin with.  He‘s a charming guy with some brains, but he doesn‘t work that hard, it doesn‘t seem.

There‘s a case to be made that sounds really scary and that has some substance behind it about how much money we‘re borrowing...

MATTHEWS:  Yes.

FINEMAN:  ... and what burdens we‘re placing on succeeding generations.

MATTHEWS:  Why don‘t they...

(CROSSTALK)

MATTHEWS:  That‘s the Republican base.  They‘re supposed to cover that base.  The base is fiscal responsibility.  It used to be their tag line.  They‘d win or lose with it, but it‘s what people associated with the Republican Party.  Now at a time you‘ve got the Democrats way off base, taking huge risks with this administration on fiscal and monetary policy—the money we‘re printing is almost, you know, Mugabe levels in terms of the rate we‘re spending it.  You got this guy Bernanke just printing it out there.  We don‘t know who‘s going to pay these bills two or three years from now.

COOK:  No, Republicans—they have plenty to say.  But you know, mechanically speaking, what they should have done is turned to the guy—his name came up a few minutes ago.  Go to Haley Barbour and say, Look, we know you‘re governor...

MATTHEWS:  Yes.

COOK:  We know you‘re governor of Mississippi.  Why don‘t you be general chairman...

MATTHEWS:  Yes.

COOK:  ... you know, and sort of bring...

MATTHEWS:  They‘re not going to do this for a while.

COOK:  ... bring an adult...

MATTHEWS:  They‘re not going to fire this guy.

COOK:  ... yes, bring an adult...

(CROSSTALK)

COOK:  No, you‘re right.  But the other thing is...

MATTHEWS:  They‘re going to keep this guy...

(CROSSTALK)

FINEMAN:  He‘s unfireable.  He‘s unfireable.

MATTHEWS:  (INAUDIBLE) for a while.

FINEMAN:  He‘s probably unfireable because if he gets pushed out, it‘s going to be a mess that the Republicans are going to have trouble dealing with and it‘s going to take away whatever smidgen of benefit they got...

MATTHEWS:  Well, they get, like...

FINEMAN:  ... from picking an African-American chairman.

(CROSSTALK)

MATTHEWS:  ... who say they‘re Republicans.  Among minorities, it‘s got to be 1 in 20, if it‘s that high, right, Charlie?

COOK:  Yes, no, you‘re right.  But the thing is, what they should do, though, is instead of declaring war on Barack Obama—Barack Obama as of last night had a 65 percent approval rating in the Gallup poll -- 65 percent!

MATTHEWS:  Well, here‘s a guy with less than that, Newt Gingrich.

(CROSSTALK)

MATTHEWS:  OK, let‘s take a look—let‘s go to an inside—inside the party.  Here‘s Newt Gingrich, who may be running for president.  Maybe it‘ll be a real down year for the party next time and he‘ll have a shot.  But here he is talking about what the party ought to do to improve itself.

(BEGIN VIDEO CLIP)

GINGRICH:  In ‘08, you ended up with a fairly close race until Wall Street melted down.  And again, think just average Americans look up and they go, Let me get this straight.  These guys have been in charge for eight years.  We have $4-a-gallon gasoline followed by the collapse of Wall Street and they‘re spending money like they were liberal Democrats.  Why don‘t I get the real thing?

(LAUGHTER)

JON STEWART, “THE DAILY SHOW”:  Oh, you think it was that cynical? 

Really?

(END VIDEO CLIP)

MATTHEWS:  Well, he got Jon Stewart a yuck.

(LAUGHTER)

FINEMAN:  He‘s got—he‘s—he made some good points there.  But I agree with Charlie.  You don‘t want to go right at Barack Obama in particular.  But you can talk about the consequences of his policies a lot more vividly and a lot more engagingly than certainly Michael Steele has and most Republicans have.

You know, Michael Steele cited Ronald Reagan.  I love that.  Ronald Reagan—when Ronald Reagan went after what he regarded as the emerging welfare state, Ronald Reagan‘s speeches as a candidate and as an outsider were incredibly vivid and gripping.  Now, some of his facts were wrong, but boy, he knew how to give an attack speech...

MATTHEWS:  Well, here is...

CROSSTALK)

MATTHEWS:  ... Michael Steele yesterday.

FINEMAN:  ... haven‘t seen anybody do.

MATTHEWS:  Let‘s watch this guy.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, RNC CHAIRMAN:  The honeymoon is over, but there‘s a very important distinction I want to make here.  We‘re going to take this president on with class.  We‘re going to take this president on with dignity.  This will be a very sharp and I think marked contrast to the shabby and classless way that the Democrats and the far left spoke of and treated President Bush over the last eight years.

(END VIDEO CLIP)

MATTHEWS:  OK, just professionalism.  Why is he reciting something that somebody else wrote he clearly hasn‘t read before?  He‘s sight-reading his speech.

COOK:  But go after...

MATTHEWS:  I mean, you talk about lazy.  Why didn‘t he look at that speech before he delivered it?  Do you see what‘s doing here?

FINEMAN:  Well, the other thing, Chris...

MATTHEWS:  He was looking down and clearly reading somebody else‘s words.

FINEMAN:  The other thing is, you don‘t have that many shots...

MATTHEWS:  Most guys pretend it‘s their words.

FINEMAN:  Also.  But the other thing is saying, We‘re going to be doing something.  Do it!  Do it!

MATTHEWS:  Yes.

COOK:  Barack Obama‘s name is not going to be on the ballot in 2010.  It‘s the Democratic Congress that‘s up.  Last time I checked, the Democratic Congress had a job approval rating that had climbed all the way up to 39 percent.

MATTHEWS:  Right.

FINEMAN:  That‘s right.

COOK:  Go after the 39 percent people.  Don‘t go after the 65 percent people.  Go after them.  And the thing is, Democrats are presenting themselves a pretty good target...

MATTHEWS:  Well, let‘s take a look at these numbers.

COOK:  Go for them.

MATTHEWS:  Here‘s the number they‘re facing.  It‘s not just among the

look, look at the numbers they‘re facing (INAUDIBLE) groups here.  A new Gallup poll just out shows that Republicans are suffering losses in almost every group in the country.  Look at these college graduates, you know, like, 10-point loss there from—what was it, 2001.  Look at this fall-off over eight years in every category—young people 18 to 29, midwestern people, low income, middle income people.  It‘s every group in the book, every income group in the book.

FINEMAN:  Charlie‘s—yes, but...

MATTHEWS:  But this is people who don‘t think of themselves as Rs anymore, as Republicans.

FINEMAN:  Right.  But the congressional Democratic Party—the congressional Democratic Party, as Charlie was saying, is not that popular.  And edit Obama out of the equation for a minute and look at the consequences of Democratic policies in terms of borrowing, in terms of debt, in terms of confusion on foreign policy, to some extent.  Go after that.  And if you have to mention Obama, say he‘s the guy who can‘t control those guys on the Hill.

MATTHEWS:  Well, one Republican advantage right now is every Republican member of Congress, man or woman, west, north, south or east, who‘s been unable to survive in 2006 and 2008 is impregnable because they cannot be beaten.  So all you have to do is focus on the open seats and the Democratic seats, right, Charlie?

COOK:  Yes, no, absolutely...

MATTHEWS:  You‘re the expert on elections.  It‘s not hard to figure out how to win.

COOK:  There are 49 Democrats sitting in districts that John McCain carried and only, what, 34, 35 Republicans sitting in Barack Obama seats.  I mean, Democrats are exposed, no question about it.  And the thing is, if I were a Republican candidate, I would say, You know, I like Barack Obama.  He‘s a bright, impressive guy.  But these Democrats running Congress, oh, not so much.  And I would just go after them with hammer and tong.

MATTHEWS:  You think it can happen?  You think they can do it next time, or is it too (INAUDIBLE)

COOK:  Oh, I don‘t think they can get the majorities back.  But the thing is, look, the average for first-term mid-term elections is 16 seats.  I mean, Republicans ought to be able to get pretty close to...

MATTHEWS:  OK, I...

(CROSSTALK)

FINEMAN:  I think the Republican Party‘s going to come back, if it comes back the way most parties always come back, the Republican Party.  You and I have seen this.  They‘ll come back in moderate states, Pennsylvania in the governorship, New Jersey the governorship.  They‘re going to pick up governorships in a lot of the country...

COOK:  Well, there are some Senate seats...

MATTHEWS:  ... and surprise people.  And Senate seats.  We‘ll be right back.  By the way, these guys are leaving.  I think we‘ve pretty much wasted the Republican Party tonight.

(LAUGHTER)

MATTHEWS:  Michael Steele just got put in a dunce cap by these two fellows.  What did we say about him, a little lazy, a little slow, what is it?

FINEMAN:  That was it.

(CROSSTALK)

MATTHEWS:  ... smart, not doing his homework.  He doesn‘t read his speeches ahead of time.  Anyway, Howard Fineman, Charles Cook.

Coming up: President Obama and Vice President Cheney both talk tomorrow on national security.  It‘s a bit of a bake-off, a Pillsbury bake-off tomorrow morning.  By the way, Cheney‘s going to be at the American Enterprise Institute, that misnamed organization.  We‘re going to talk, by the way, right now to two U.S. senators on either camp and debate what to do with those terror suspects at Gitmo because, apparently, Gitmo lives on, despite what the president said in the campaign.  That‘s next.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  President Obama got a big brushback from the U.S. Senate today when they voted 90 to 6 -- that‘s 90 to 6 -- to block Guantanamo detainees from coming to the U.S.

Joining me U.S. Senator Saxby Chambliss—he‘s a Republican of Georgia—and U.S. Senator Ben Nelson, who‘s a Democrat of—oh, actually, Ben Nelson is a Democrat of Nebraska.

Senator Nelson, you first.  What do we do with the people that are at Gitmo if we close Gitmo?

SEN. BEN NELSON (D), NEBRASKA:  Well, I think that has to be part of the president‘s plan, to explain what his thoughts are on that.  I suspect some of them will go back to the countries of their origin of their nationality.  But I think that‘s what has to be part of the plan.

MATTHEWS:  Well, we‘ve got a new report that‘s not quite officially released now.  I want to go to Saxby Chambliss on this.  Senator, 7 of the 534 prisoners that have been transferred abroad from Guantanamo have rejoined the terrorist forces, so it‘s something we‘ve all worried about.  What do we do with people we can‘t make a case against them criminally, we let them go and they go right back into the enemy forces.  What do we do with them?

SEN. SAXBY CHAMBLISS ®, GEORGIA:  Well, I actually...

MATTHEWS:  What can we do about that?

CHAMBLISS:  I actually think he‘s is a little bit higher than that, Chris.  In December, it was about...

MATTHEWS:  I‘m sorry, one in seven.  You‘re right, Senator, one in seven.  So one-seventh of that 534.  That‘s a lot.

CHAMBLISS:  Yes, it is a lot.  And I suspect the number has increased since January.  The Department of Defense has not released those numbers as of yesterday, when, frankly, we requested the release of them.  But you know, the fact is that we know that the ones that are left at Guantanamo are the meanest, nastiest killers in the world.  They get up every day thinking ways that they can kill and harm Americans.  And those are the individuals that we just can‘t afford to have transferred to this country.  And certainly, we can‘t afford to put them in position of being released into U.S. society.

NELSON:  Absolutely.

MATTHEWS:  What do you think of—do you think our prisons, our maximum security prisons are not adequate to hold them?  And we‘ve got some -- you know, we‘ve got a lot of killers in our prisons.  We‘ve got murderers.  We‘ve got people that murdered again and again in our prisons, really horrible people in those maximum security prisons in this country.

Senator Chambliss, you‘re saying they‘re not good enough to hold these terrorists?  They‘re not tough enough to hold them?

CHAMBLISS:  No.  What I‘m saying is that once you put them on American soil, then all of a sudden, Chris, they become eligible for a lot of rights that American criminals have.  And these are combatant detainees.  These are not ordinary bank robbers or the nasty folks that they would be associated with at these prisons.  These are folks that either have killed or tried to kill Americans.

And we need to make sure that they don‘t have the rights given to those criminals that are placed on American soil, such as the right of habeas corpus.  And a certain number of them will probably be successful in a habeas corpus action and could be released in America.  And we don‘t need to give the Americans exposure of that nature.

MATTHEWS:  Senator Nelson, is this really a case of NIMBY, “not in my backyard”?  A lot Senators are afraid that if they voted for the funding to close down Gitmo, they could be later accused of having a hand in letting those people come to their states as terrorists housed in their own territory?

NELSON:  Well, it certainly isn‘t in my case.  I think it‘s inappropriate to try to bring those prisoners, those enemy combatants to the United States, to try them, to house them, to incarcerate them.  It‘s just inappropriate.

It‘s a matter of politics.  It‘s a matter of policy.  And even if you didn‘t run the risk of habeas corpus and some of the other rights that they might be able to allege or to assert while on the American soil, it‘s inappropriate.  This is not the place for them.

I think we need to work with the other countries to make sure that they don‘t release them, that they keep them incarcerated.  After all, they‘re their citizens, their residents, and they have an obligation here, as well.  It‘s not all on our shoulders, in my opinion.

MATTHEWS:  Well, what do we do?  Do we take them—I mean, we sent Napoleon—the French sent Napoleon to St. Helena down in the South Atlantic.  I mean, how far—is there another place besides Gitmo?  I understand, Senator Chambliss, the symbolism.  Obviously, the candidate, Barack Obama, didn‘t like the symbolism of Gitmo.  But are we going to have to face the fact that these guys are terrorists?  They‘re going to have to be somewhere?  It might as well be Gitmo? 

CHAMBLISS:  Well, I understand what he‘s talking about from a symbolism standpoint.  And I‘m not one who thinks we ought to keep Gitmo open forever and ever and ever.  But you‘ve got to have a plan in place, Chris, before you make a major decision such as closing Gitmo.  It may take us three, four, five, ten years.  I don‘t know what it will take us before we can deal with each of these prisoners individually. 

That‘s what we‘re looking for, and we‘re looking at a way to keep those prisoners housed and keep them off of American soil till some definitive plan is in place as to how we‘re going to deal with each one of these 240 individuals. 

MATTHEWS:  Let me ask you, Senator Chambliss, about the report by the FBI director, Mr. Mueller, who‘s obviously a holdover, a civil servant who continues as FBI director.  He said when he was asked today—I heard the interview today where he said he is afraid—he did this under questioning.  I don‘t think he wanted to say this.  But he did say it. 

We have a situation in this country where our hardened criminals in our federal penitentiaries in maximum security situations who continue to operate gangs.  They can get the word out.  They can get on the phone.  They can find way of communicating indirectly, and they can run criminal operations. 

He was actually concerned today that we might take terrorists into places like San Quentin or other heavy security places, and they could begin to operate as terrorists from those facilities.  Do you have that concern? 

CHAMBLISS:  Oh, I sure do share that concern.  You know, we know that our prisons are a breeding ground for recidivism by criminals.  And we also know that Al Qaeda looks for weakness in individuals to try to recruit those types of individuals in their organization.  And, certainly, criminals, hardened criminals who have nothing to look forward to but the rest of their lives in jail are the types of individuals that Al Qaeda would try to recruit and even those or going to be getting out would be more important for them to recruit. 

So I think there are definite ways of communication between hardened criminals in our prison system.  They‘re smart people.  And they know how to communicate and how to get a message out there.  And, certainly, I think the director is very wise to think in terms of how we would deal with that. 

MATTHEWS:  Well, let me ask you, Senator Nelson.  Should we execute these people?  I mean, let‘s be honest about it.  If we believe they‘re evil, if we believe they‘re coming to the us, they‘re hardened killers and terrorists, and they intend, the minute they get out, to come back and try to kill us, why are we so dainty about it?  Why do we keep holding them?  Why don‘t we execute them? 

I mean, isn‘t this—we‘re just passing the buck continually saying where do we put these people when we really think that they‘re our enemies and always will be? 

NELSON:  No.  I think what we do here is we—we expect the president to put together a plan that explains in detail how we‘re going to deal with these individuals.  And I think sending them back to their countries, in most cases, is the way—the way to go with an understanding with those countries that they will be—that they will be incarcerated.  They‘re not going to be released back into society, or that—and, as in the case with Saudi Arabia, where certain detainees have been released, they have a program trying to rehabilitate them. 

It isn‘t fully successful, but at least it‘s their problem.  I don‘t think—I don‘t think we have the responsibility to assume the need to take care of these individuals indefinitely and, certainly, not on American soil. 

MATTHEWS:  OK.  Thank you very much, gentlemen. 

Thank you, Senator Saxby Chambliss of Georgia. 

CHAMBLISS:  Thank you. 

MATTHEWS:  And thank you, Senator Ben Nelson of Nebraska. 

NELSON:  Thank you. 

MATTHEWS:  Up next:  Rush—Rush—Rush Limbaugh says he‘s resigning

of course, this is all a joke—he‘s resigning as titular head of the Republican Party, the biggest abdication since  Edward VIII left for the woman he loved.  He‘s leaving the Republican Party leadership.  That‘s what he says.  And he also asks this network to give him a break, not to mention his name.  How can we do that if he keeps making the news?    

That‘s coming up where it belongs, in the “Sideshow.”

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

Well, today, more bad news for the Grand Old Party.  First, it was Matt Dowd, the chief strategist for George W. Bush‘s reelection campaign.  Then came President Bush‘s press secretary, Scott McClellan.  Then came his secretary of state, Colin Powell.  Then, lest we forget, Senator Arlen Specter officially dropped his 44-year membership in the Republican Party. 

Well, as Rush Limbaugh would say, ladies and gentlemen, they‘re dropping like flies. 

Well, today, the loudest Republican of them all quit the party. 

Here‘s Rush Limbaugh, Rushbo, as he calls himself, giving this shout goodbye as leader or titular head of the Republican Party. 

(BEGIN VIDEO CLIP, “THE RUSH LIMBAUGH SHOW”) 

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  I have been anointed to this position by members of the drive-by media, and, of course, the Obama White House. 

I‘m resigning as the titular head of the Republican Party.  There, frankly, is someone far more qualified and capable and more in tune with today‘s Republican Party than I to be not only its titular head, but its real head.  And that would be General Colin Powell.  So, I now pass the baton to General Powell. 

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS:  What a showman. 

Well, a grace note to that story—just yesterday, Rush Limbaugh, the same mentioned just there, asked this network, MSNBC, to black him out of the news, take him out of the news altogether, act as if Rush Limbaugh doesn‘t exist, that those three hours each day he‘s talking didn‘t happen. 

Here he is yesterday. 

(BEGIN VIDEO CLIP, “THE RUSH LIMBAUGH SHOW”) 

LIMBAUGH:  So, my challenge is this to MSNBC.  Let‘s see if you can run your little TV network for 30 days—let‘s see if you can do Rush withdrawal—let‘s see if you can run your little TV network for 30 days without doing a single story on me. 

(END VIDEO CLIP)

MATTHEWS:  I love the way he pulled his shirt there.  What was that about? 

Well, of course, I can‘t do that, not as long as Rushbo, as he calls himself, keeps making news, like he did today, abdicating as leader of the party.  When the biggest whale in the ocean says he‘s quitting the ocean, ladies and gentlemen, that‘s news.  When Rush Limbaugh offers up the grandest, most self-reverential abdication since Edward VIII left the British throne to marry Mrs. Simpson, again, ladies and gentlemen, we go to press. 

Time now for tonight‘s “Big Number.”

As the climate change bill fights its way through the House energy bill this week, Republicans have thrown up a giant yellow flag.  They threatened to require an out-loud reading of the entire 946-page bill and all the proposed amendments.  Escalating, the majority Democrats have hired a speed-reader. 

But, even with a speed-reader, how long would it take to read through the entire climate change bill?  Well, according to “The Wall Street Journal,” nine hours. 

Imagine the campaign ad:  Bog things down.  Vote Republican.  A nine-hour speed reading session—the latest stalling tactic on display by your elected members of Congress—tonight‘s “Big Number.” 

Up next:  Former House Speaker Newt Gingrich says current House Speaker Nancy Pelosi should resign.  Should the FBI investigate Pelosi‘s claim that she alleged the CIA misled Congress about torture and water-boarding?  We will talk to a Republican congressman who is pushing for just that, an FBI probe.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MARGARET BRENNAN, CNBC CORRESPONDENT:  I‘m Margaret Brennan with your CNBC “Market Wrap.”

Stocks turned negative late in the session, with the Dow Jones industrial average finishing the day lower by 52 points, the S&P 500 down by four.  And the Nasdaq shed more than six points. 

Stocks sank after minutes from the latest Federal Reserve meeting were released.  Policy-makers downgraded their economic outlook for the year and raised their estimate of how high the nation‘s unemployment rate could go, saying it could hit 9.6 percent. 

Meantime, Treasury Secretary Tim Geithner told the Senate Banking Committee today that the financial system is on the mend.  He said the country‘s largest banks have raised $56 billion in capital since the government revealed the results of its financial stress tests two weeks ago. 

And oil prices surged to a new six-month high, with crude gaining $1.94, closing at $62.04 a barrel, just in time for summer driving season. 

That‘s it from CNBC, first in business worldwide—now back to Chris and HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Former House Speaker Newt Gingrich said today that Democrats should replace House Speaker Nancy Pelosi.

And Republican Congressman Darrell Issa of California called on the FBI to investigate whether the CIA did in fact or did not lie to her. 

Congressman Issa is right here today. 

This is serious business. 

He‘s joined by Democratic Congressman Adam Smith of Washington State, who is a member of the Intelligence Committee and the Armed Services Committee. 

Gentlemen, I want to get the particulars. 

It seems to me, Mr. Issa, if you are going to have an FBI investigation of a lying here, if there was a lying, it‘s an easy two-step.  Go to Nancy Pelosi, and asked her, was she or was she not—and do it under oath—was she told under oath that water-boarding was not used?

Then go to the briefer and say to him, did you know it was used, but told her otherwise? 

This isn‘t a long investigation.  You put the speaker under oath.  You put the briefer under oath.  Would you be for that? 

REP. DARRELL ISSA ®, CALIFORNIA:  Well, I‘m certainly for whatever Speaker Pelosi...

MATTHEWS:  No.  For that.  No.  For that, sir. 

ISSA:  I‘m—I—if Speaker Pelosi asks for that, of course, I would be for it.  But...

MATTHEWS:  No, no, no, you‘re asking for it.  You‘re asking for an FBI investigation.  I‘m asking you to say what you mean.  Do you mean she should be put under oath about her briefing by the CIA back in September of 2002? 

ISSA:  Chris, you‘re entitled to your questions.  Please give me an opportunity to give you a fair—a fair answer. 

MATTHEWS:  Well, what does an FBI investigation—well, what does an FBI investigation mean, then, if it‘s not the obvious, asking what happened in the meeting?

(CROSSTALK)

ISSA:  Chris, Chris, the speaker of the House has made an allegation, along with other Democratic congressmen, that they were lied to. 

MATTHEWS:  Right. 

ISSA:  Paul Kanjorski said he was lied to a week later. 

MATTHEWS:  Right. 

ISSA:  Others are coming forward saying, “The CIA lied to us.”

MATTHEWS:  Right. 

ISSA:  That is a serious allegation.  The FBI director was before our committee, before my other committee, Judiciary.

And—and, rightfully so, we said, don‘t we have standing to make sure that we have a—an honest report to Congress?  And isn‘t it your job to look into it?  And would you please do it?  And a number of members asked him to do it. 

We‘re not asking for the speaker to go under oath.  We‘re asking for

him to look into it in the ordinary course of what his obligation is, what

the FBI, the U.S. attorney‘s obligation is.  We‘re not making accusations -

at least I‘m not making any accusations about the speaker. 

I‘m taking her at her word that she was lied to.  And, if she was lied to, then, in fact, we have to get to the bottom of whether the intelligence community lies to any of us. 

And, like Adam, I was on the Select Intelligence Committee.  I have had a lot of those briefings.  We rely on truthfulness and candor behind those closed doors.  That‘s all we‘re asking, is to make sure that we‘re getting truthfulness and candor. 

MATTHEWS:  Congressman Smith, if there‘s two people in the room, a briefer and a person being briefed, the only way to find out if there was lying going on is to have a witness testify that they were lied to. 

Congressman Issa says he doesn‘t want the speaker to be forced to say she was lied to under oath.  I don‘t know how else to get—to have a probe, which is what the congressman says he wants.  If he‘s seriously pushing for a probe here now, it seems to me he has to say, “I want both parties under oath,” or it‘s not a serious probe.  What do you think? 

REP. ADAM SMITH (D), WASHINGTON:  I clearly do not think that the FBI needs to be involved in investigating this. 

And one of the things you have to keep in mind, there was no actual record kept of this conversation.  Nobody was taking contemporaneous notes or recording what was said in this meeting. 

The CIA does take notes on the meetings, sometimes weeks after the meeting actually took place.  So, ever determining exactly what was said in that room or in any of the briefings is going to be absolutely impossible. 

I mean, we can go back and sort of see what everyone‘s opinion was about what happened six years ago, but I think that would be a colossal waste of the FBI‘s time. 

And one other point here—there‘s a long history of members of Congress of both parties disputing what the CIA tells us on the Intelligence Committee.  Sometimes, we think they intentionally left stuff out.  Sometimes, we think they misled us.  You know, there‘s a long history of this dispute. 

We don‘t want the FBI investigating this every time there‘s a disagreement.  Representative Hoekstra, the Republican ranking member of Intelligence, has many, many disagreements with what the CIA did or did not tell us over the course of the last few years. 

What we need is, we need the Intelligence Committees in the House and the Senate to have communications with the CIA about exactly what was said and to try to build on that relationship to make sure that this misunderstanding doesn‘t keep happening. 

We don‘t need the FBI to be investigating what was said at one meeting six-and-a-half years ago, when it wasn‘t even recorded. 

ISSA:  Chris, that‘s an...

(CROSSTALK)

MATTHEWS:  Congressman Issa, your view on that? 

ISSA:  Yes. 

MATTHEWS:  You believe there should be an FBI probe, which...

ISSA:  Well...

MATTHEWS:  ... means you think there might be criminality involved, because it is—as you pointed out, it is illegal to lie to Congress. 

Do you believe—how do you—would you go about finding out whether somebody lied, if you don‘t ask the witness in the room, Nancy Pelosi?  That‘s what I don‘t understand, how you can have a probe without a probe. 

ISSA:  Chris, it‘s amazing that Adam is able to know all the facts about why there‘s no culpability and no possibility of getting to the bottom of it.

SMITH:  I‘m not saying I know all the facts.  I‘m just saying they‘re not recorded anywhere. 

ISSA:  You made a lot of statements that I don‘t actually know.  But what I do know is that we had numerous briefings during that period of time.  The Gang of Four had briefings.  There were plenty of opportunities to see whether the CIA told the truth or didn‘t at other times.  And many of those—certain of those are recorded. 

But the fact is the Speaker has said that, in fact, the CIA lied.  The CIA has said, no, we didn‘t.  Now, I‘d like to make sure that the speaker has an opportunity to get her reputation back, if you will.  And at the same time, unlike Adam, I‘m very concerned that every briefing to every member of Congress, whether it‘s at the secret level or the most compartmented level, be honest and have candor. 

Pete Hoekstra, when he felt he didn‘t get candor, has come very quickly forward, worked with the IG‘s, worked with the other groups to ensure that he gets candor going forward. 

SMITH:  Yes, and that‘s perfectly appropriate. 

ISSA:  Right.  As the Republican head on the Oversight Committee, I felt an obligation—also I‘m on the Judiciary Committee member—to ensure that we dig into this to make sure that if the CIA was not candid, that we hold them accountable.  That‘s all I‘m doing.  And to say we can‘t do it—

SMITH:  That‘s not all you‘re doing actually. 

ISSA:  No, that is all I‘m doing. 

MATTHEWS:  Gentlemen, I want to ask you this.  First Congressman Issa, then Congressman Smith.  It seems to me we have two things on the record now, and it‘s been clear.  Last Thursday, the speaker said that they told her they had not used water boarding.  The briefer said specifically, we have not used water boarding on any of the terrorist suspects.  And then the CIA, spoken for by Leon Panetta, said, yes, we did tell her that. 

So you have on the record, Congressman Issa, the claims, the testimony, if you will, of the speaker and the CIA.  We have that.  What would an FBI probe accomplish beyond getting them both to say what they said on the record, which is adversarial.  What would you accomplish with a criminal probe?   

ISSA:  Well, we in the Congress hold ourselves accountable, including the speaker of the House.  I‘m not disputing that.  That‘s an internal requirement.  But we also have an obligation to hold the other branch accountable. 

In this case, the allegation that the CIA lied is a serious one.  Leon Panetta, as a former Congressman, very well knows we have an obligation to probe into that and find out whether it‘s true or not.  We‘re not looking to the speaker of the House.  We‘re looking, as Congressmen, externally to whether the CIA lied or not. 

They say they didn‘t.  We need to know—we need to know every single time—and I disagree with Congressman Smith.  Every single time there‘s an allegation that we were lied to or misled, we need to get to the bottom of it. 

SMITH:  There‘s no disagreement on that. 

ISSA:  This is no exception.  That‘s what I‘m calling for.  That‘s why I talked to the director.  That‘s the direction I want to go is out, external.  It‘s not a question of whether the speaker‘s memory is correct or not.  We‘ll deal with that.  She can deal with that.  They‘ve said they told her.  She said she believes they didn‘t.  We need to know if they lied to the speaker of the House. 

MATTHEWS:  Congressman Smith, they‘re both in CYA mode, both parties.  The speaker and the CIA are both saying they did the right thing.  The speaker says she wasn‘t told, in fact she was told the opposite of what the CIA is claiming now.  I just wonder how we‘re going to get any further without putting both parties under oath, and seeing if they‘re willing to take the risk of perjury if they‘re not telling the truth.  You say it‘s not worth doing. 

SMITH:  We will get further in exactly the way that Representative Issa said that Representative Hoekstra has gotten further when he‘s had these type of disputes.  Working through the inspector general, working through the Intelligence Committees, and working through the CIA. 

Bringing the FBI into this makes no sense whatsoever.  There is very, very little evidence at this point of a crime.  There‘s a dispute about facts in one conversation that happened six and a half years ago.  And this particular conversation is the one that was not contemporaneously recorded. 

What exactly was said there, the FBI doesn‘t belong here.  And I suspect that there‘s a little bit of Republican grand standing in trying to drag the FBI into this, when the appropriate thing to do is exactly what Representative Issa described.  Have the inspector general do his job. 

MATTHEWS:  Thank you, sir.  As always—Always welcome here.  Congressman Adam Smith of Washington State, gentlemen, both of you, thank you for coming in for this debate. 

Up next, Republican party chair Michael Steele says the honeymoon is over; it‘s time to start attacking the president directly.  Is that the way forward for the Republican opposition?  The politics fix is next.  Is this the smart strategy?  Get at the leader.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back.  It‘s time for the politics with Pat Buchanan.  He‘s an MSNBC political analyst.  And tonight, Wayne Slater, who is senior political writer for the “Dallas Morning News.” 

Wayne, here‘s a hot story that you broke.  This fellow Dave Carney—let‘s look at the full screen of what he said.  He‘s a strategist for the governor down there, Rick Perry, who was talking secession a couple of weeks ago.  Here‘s what he said about the Republican party and whether it should have a big tent or not.  He said, “it doesn‘t mean you take your principles and throw them out the door and become a whorehouse, and let anybody come in who wants in regardless.” 

That‘s been taken by the forces of Kay Bailey Hutchison, the senator down there, according to reporting as a gender shot at her. 

WAYNE SLATER, “DALLAS MORNING NEWS”:  Absolutely.  Carney was not specifically talking about Kay Bailey Hutchison when he said this.  He didn‘t call her the best little whore in Texas.  He was talking about what the Republican party is debating.  Do we move to the middle or do we move farther to the right? 

And he represents Rick Perry in a story that I was writing about the contest between Perry and Hutchison. 

MATTHEWS:  How do you handle the local idiom down there?  Everybody knows the Larry King musical, if you will, “The Best Little Whore House in Texas.”  Is that a common term in the political lexicon down there in Texas?  Do you refer to anybody who wants a big tent as opening up a whore house?  Is that common lingo down in that part of the world?

SLATER:  Now we‘re doing some campaigning.  This is serious stuff.  This is good.  I think he probably wishes he hadn‘t said that to me.  It‘s probably not the best thing to say in the context of a race against Kay Bailey Hutchison and has riled up certainly a number of her female—a number of her supporters. 

MATTHEWS:  I wouldn‘t say riled up here.  Let me tell you, there‘s a letter out, going to the governor.  It‘s written by a number of women.  And they‘re business women.  They say, “as business women, community leaders and mothers, it‘s always concerning and disheartening when we see people resort to behavior aimed at belittling women.  Therefore, you cannot imagine how appalling it was to see your campaign‘s chief strategist liken our senior senator‘s primary campaign to, quote, opening the doors of a whore house in your paper this morning.” 

So.  Pat is laughing.  You think this is funny.  This is pretty rough language.

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Carney fumbled the ball and there‘s five ladies in the end zone holding it up.

MATTHEWS:  Well, you seize your opportunity.  If a guy—George Allen is still paying for Macaca.  This happens. 

BUCHANAN:  Yes, this is politics.  Ladies did it—they wrote this indignant, outraged, angry letter because Carney had made a mistake and used the term.  Obviously, his idea, there‘s nothing wrong with that.  We have to maintain our principles and philosophy as a party, or we‘re nothing. 

The phrase was unfortunate and they jumped on it. 

MATTHEWS:  And it‘s unrelated to the gender of the opposition here? 

BUCHANAN:  Sure it is.  He‘s not going to do that, because Carney is a smart guy.  I think I knew his father.  I think he‘s a New Hampshire guy.  

MATTHEWS:  Let me go back to Wayne.  Do you think there was an

intentional gender reference here in this?  Or was it just an unfortunate

reference to a Texas notion of a whore house? 

(CROSS TALK)

MATTHEWS:  I find this the strangest story.  I‘ll tell you one thing, these women down there believe—these are heavy weights down there—they believe this is a shot worth returning.  They believe this may give—

I remember a couple of years ago when you have the great Ann Richards down there, that seemed to be the victim of some bad play by the other guy, the somewhat traditional fellow she ran against, to put it lightly, and she benefited from that sense that he was being unfair in his parlance.  Your thoughts? 

SLATER:  Absolutely, Chris.  You‘ve got it exactly right.  You‘ve got is exactly right.  Ann Richards, when she ran against Cladey Williams (ph), the cowboy back in 1990, he didn‘t shake her hand.  You don‘t do that in Texas.  You don‘t shake a woman‘s hand when she offers her hand.  That worked to her advantage.

And it‘s interesting now that whether Carney meant this or not, and he‘s a brilliant political strategist -- 

MATTHEWS:  Has he handed his opposition what they want, a grenade they can throw back at him? 

SLATER:  Absolutely he has.  There‘s no question about it.  And that‘s exactly what they are doing.  I like the end zone reference that Pat made.  I think that‘s exactly what has happened here. 

BUCHANAN:  Cladey also made this terrible statement about rape down there, the dumb, stupid thing, and he was running ahead, and he had a great campaign.  It killed him, you‘re right. 

MATTHEWS:  Remind ourselves, it‘s the business they have chosen.  If a surgeon leaves a pair of pliers in somebody‘s stomach, that‘s a mistake.  You don‘t mistakes in this business.  We‘ll be right back with Pat Buchanan. 

BUCHANAN:  Ladies piled on the governor.

MATTHEWS:  Thank you.  Wayne, stay with us.  We have another hot one when we come back.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Well, the Republican party this evening has just voted to condemn the Democratic party, Wayne and Pat, for marching towards socialism.  That, of course, as we‘ve been reporting today, is a moderate version of what they wanted to say.  Instead of calling them the Democratic socialist party, Pat, they‘ve just accused them of a tendency here, marching to socialism.  Your view of the left-ward shift of your party? 

BUCHANAN:  I think Colin Powell has gotten into this one. 

MATTHEWS:  They are getting moderate? 

BUCHANAN:  No, they did a very smart thing.  Democratic socialist thing was a clunky idea.  It was a dumb idea.  They got rid of it, but they gave these guys something to say that your point of view is well taken.  And it‘s got something behind it.

MATTHEWS:  And it‘s not really that new.  Wayne, the Democratic party is now marching towards socialism, according to an official resolution, just this moment passed by the Republican National Committee.  Your thoughts? 

SLATER:  Pat is right.  It is better than the Democrat Socialist party.  It reminds me of those two guys in “The Muppet Show,” up in the balcony, the two old white guys who are kvetching about everything.  That‘s what—Cheney and Limbaugh, that‘s the Republican party.  This is exactly the Republicans—the Democrats want, where you‘re talking about stuff that doesn‘t matter.  These are gimmicks mix.  They aren‘t about stuff that people care about. 

BUCHANAN:  There is something that does matters.  That is that the pendulum one day is going to come back.  And when it comes back, you want a Reagan to be there as the leader of your party.  You don‘t want a moderate or a liberal Republican. 

MATTHEWS:  What is wrong with your party?  It‘s the dufus party right now.  It‘s a party that has principles, tough on foreign policy.  It‘s always been good on fiscal responsibility, until the last eight years.

BUCHANAN:  The problem with the Republican party is it lost middle America with the trade thing.  It lost three million -- 20 percent of manufacturing jobs, got into a war it shouldn‘t have.  It ran up huge budget deficits.  It didn‘t control the border.  It presided over the collapse of the financial system.

But they—Chris, I‘ll tell you now, from my standpoint, I see the Republican party as extremely well positioned, and Barack Obama is at 65 percent.  Nixon was at 70 percent in his first off year election.  Reagan was at 70 percent when we lost ten Senate seats in ‘86. 

The pendulum is going to swing.  The conservatives ought to do what Steele said today.  They ought to be polite and respectful of this president, but go after his policies right across the board where they conflict with our principles, and fight. 

MATTHEWS:  Will the Republican party of Texas stay hard right with Rick Perry, the guy who talks up secession down there, or go somewhere center right with Kay Bailey Hutchison?  What do you think, Wayne?

SLATER:  That‘s really the question. 

MATTHEWS:  OK.  Got to go. 

SLATER:  It‘s a good question.

MATTHEWS:  Thanks very much, Pat Buchanan and Wayne Slater.  Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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