updated 6/9/2009 10:47:55 AM ET 2009-06-09T14:47:55

Guests: Margaret Brennan, Andrea Mitchell, Howard Fineman, Jonathan Martin, Jamie Rubin, Jeanne Cummings, Ceci Connolly, Fred Malek, Michelle Laxalt       

CHRIS MATTHEWS, HOST:  GOP jamboree.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews in Washington.  Leading off tonight:

All dressed up but no place to go.  Tonight the Grand Old Party holds a grand old wing-ding.  So who‘s the star going to be?  It looks, as of now, that it‘s Newt Gingrich who‘s set to take the cake.  There was an invite out to Sarah Palin to speak.  She‘ll be there, but it‘s Newt‘s night—until 9:00 o‘clock, that is.  That‘s when Sarah Palin appears on FOX.

So here‘s the question.  Who does speak for the Republican Party today?  Is it Newt or Palin or both?  Is it Colin Powell, or is it Rush Limbaugh and Dick Cheney, both of whom say that Powell isn‘t even in the party anymore?  Or is it a pair of Republican congressional leaders, Mitch McConnell and John Boehner, who seem to get overpassed all the time?  Is the Republican Party going back to its roots now, a coalition of abolitionists, who mistrust the government, and the establishment, who are conservative in their manner, as well as in their philosophy?

Plus, the new Democratic coalition.  Will the Republicans bark—well, while they bark, the caravan of Barack Obama and the Clintons moves on.  Last week, we learned that even as a candidate, Barack Obama had decided he was going to make Hillary Clinton his secretary of state, and yesterday Hillary Clinton explained why she took the job.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE:  Ultimately, it came down to my feeling that, number one, when your president asks you to do something for your country, you really need a good reason not to do it.  Number two, if I had won and I had asked him to please help me serve our country, I would have hoped he would say yes.

(END VIDEO CLIP)

MATTHEWS:  That‘s interesting.  Much more on the Obama/Clinton alliance in just a moment.

Plus, the Clintons could certainly tell the president a thing or two about how not to get a health care plan passed.  President Obama begins his full-court press on health care this week, but today all but one Republican on the Senate Finance Committee said no to a public insurance plan.

And there are two governors‘ races this year where the Republicans hope to start their comeback, New Jersey and Virginia.  Virginia‘s Democratic primary‘s tomorrow, and we‘ll handicap that race in tonight‘s “Politics Fix.”

Finally, Rod Blagojevich declares himself the anti-Nixon.  Unlike the resigned president, he says he wants his tapes heard.  Meanwhile, “The Washington Post” calls on Senator Burris, the man B-Rod made king of the world—well, they say he should resign.  That‘s in the HARDBALL “Sideshow” tonight.

But we start with Sarah Palin, Newt Gingrich and the big Republican fund-raiser tonight.  It‘s a joint House/Senate fund-raising dinner, a big flag-raiser for the party.  Newt Gingrich is the keynoter tonight.  The party offered that role to Sarah Palin first, but due to scheduling issues, she couldn‘t commit.  After a series of “will she or won‘t she” back and forth reports, it now turns out that she will attend tonight but not speak.  But what does this all tell us about who does speak for the Republican Party today?  That‘s a hot issue tonight.

Joining me is Republican strategist Michelle Laxalt and Republican fund-raiser Fred Malek.  Mr. Malek, you are the man behind the throne.  You are very much a supporter of Sarah Palin.  Would you like to see Sarah Palin on the ticket again next time, up top?

FRED MALEK, FMR CO-CHAIR MCCAIN CAMPAIGN FINANCE COMMITTEE:  Well, look, here‘s what I think.  I think Sarah Palin‘s one of the great leaders we have in the party, but we have a lot of leaders.  And you know, going back to some of your opening remarks, unless we can span the spectrum from Sarah Palin to Colin Powell and be a big tent Republican Party and appeal to voters across all spectrums of the party, we‘re not going to win elections.  And I think Sarah Palin is a great leader, as is Colin Powell and as are many others.

MATTHEWS:  Yes, but you know, you got people in your party, Michelle -

you‘ve got Dick Cheney out there, the former vice president, recent vice president, saying—and also joined by Rush Limbaugh—saying that Colin Powell‘s not even a Republican.  They‘re trying to talk him out of the party.  What gives?  Who‘s the party right now?  Who is the Republican—is it Sarah Palin?  Is she a real leader?

MICHELLE LAXALT, REPUBLICAN STRATEGIST:  I think right now, the legitimate head of the Republican Party are those who‘ve been elected within the party structure.  By that I mean the chairman of the Republican senatorial committee, Mr. Steele, who is chairman of the Republican National Committee, the chairman of the Republican congressional committee.

And as to this dinner tonight, having worked on these dinners when I was but a pup many years ago in this town, when your party has gotten shellacked, as my party did in November, Chris, this dinner is the first clarion call for whether or not people really want to come back and recognize that they need to do some serious shifting and self-examination.  So it will be measured tonight by what the revenues are.

MATTHEWS:  All right.  Well, what do you think of Sarah Palin speaking tonight?  Were you for or against that possibility?

LAXALT:  I was surprised that they made the request, but I was more surprised that she turned it down.  And I must confess, as a female, I just had to shake my head and say, Please don‘t change your mind and make it look like women always change their mind.

MATTHEWS:  Yes, but in a big world sense, do you think she‘s a great spokesman for the Republican Party, your party?  Would you like to see her out front as a spokesman for the party?

LAXALT:  I think we need everyone out front.  I agree with Fred Malek‘s point, and that is that we got fat and happy.  We started spending the taxpayers‘ money.  We overspent.  We overregulated.  And we got fat and happy, and in the process, we thought we could play exclusionary games. And in my estimation, this party should embrace everyone and should never have let Arlen Specter leave this party.

MATTHEWS:  Yes, well he‘s gone.

(LAUGHTER)

MATTHEWS:  He‘s in with labor right now.  Look at Cheney now on Colin Powell on “Face the Nation.”  Here he is talking about Colin Powell.

(BEGIN VIDEO CLIP)

BOB SCHIEFFER, HOST:  Colin Powell said Republicans would be better off if they didn‘t have Rush Limbaugh speaking for them.  Where do you come down?

RICHARD CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES:  Well, if I had to choose in terms of being a Republican, I‘d go with Rush Limbaugh, I think.  I think—my take on it was Colin had already left the party.  I didn‘t know he was still a Republican.

SCHIEFFER:  So you think that he‘s not a Republican?

CHENEY:  I just noted he endorsed a Democratic candidate for president this time, Barack Obama.  I assume that that‘s some indication of his loyalty and his interests.

SCHIEFFER:  And you said you‘d take Rush Limbaugh over Colin Powell?

CHENEY:  I would, politically.

(END VIDEO CLIP)

MATTHEWS:  Fred Malek, you‘ve been a big fund-raiser for the party all these years.  I always thought one of your heroes was Colin Powell, that you wouldn‘t want to bounce him out of the party the way Cheney did there.

MALEK:  I absolutely would not.  I‘ve known Colin Powell for 35 years.  He‘s one of the most honorable men, one of the great leaders of our party, one of the great leaders of our nation.  I‘m glad he reaffirmed his position as a Republican on national TV recently.

I think he put all that to rest.  I am sure that Rush Limbaugh and Dick Cheney are happy that he reaffirmed it and that he‘s part of...

MATTHEWS:  Oh, they are.

MALEK:  ... the big tent Republican Party.

MATTHEWS:  You are such a Santa Claus, Fred!  I watched—you want to

I‘m not going to play it again.  Dick Cheney, in his troll-like fashion, just ripped the guy out of the party and says—you know how he does it, in that avuncular fashion—Well, I assume he‘s not a member of our party anymore.

Let‘s take a look—here‘s—let him speak for himself.  Here‘s General Powell defending his Republican-ism.

(BEGIN VIDEO CLIP)

COLIN POWELL, FORMER SECRETARY OF STATE:  Rush will not get his wish, and Mr. Cheney was misinformed.  I am still a Republican.  I have always felt that the Republican Party should be more inclusive than it generally has been over the years.

(END VIDEO CLIP)

MATTHEWS:  What do you make of this, Michelle?

LAXALT:  I think that you‘re seeing an internecine warfare that started between Cheney and Powell over policy differences many years ago.  You‘re seeing inside ball.  I couldn‘t disagree more with Rush Limbaugh.  Excuse me very much, I don‘t think he has been elected even dog catcher as yet, and as a Republican, I don‘t want him as part of my party.

But Chris, you have to admit, you miss Dick Cheney.  You‘re pining for Dick Cheney!

(LAUGHTER)

MATTHEWS:  Well, he keeps coming back!  He‘s like...

LAXALT:  You bring him up every day, Dick Cheney.

MATTHEWS:  I hate to tell you—Freddy Krueger...

LAXALT:  I think you miss him.

(CROSSTALK)

MATTHEWS:  ... comes back in every movie, and this guy is back every -

he‘s out there hitting the AEI, which is a paid-for...

LAXALT:  You‘re jonesing for Dick Cheney.

MATTHEWS:  Oh, no.  I don‘t have to cry for him.  He‘s just out there loud and clear.  Let me ask you all, lady and gentleman here—the Republican Party was built by an interesting coalition.  You guys are students of your party.  I‘m not any more than you are.  There was the abolitionist wing.  It was very dramatic, you know, the John Brown people that really wanted to get rid of slavery.  Then there were the more establishment George Bush types of their era, the George Bush, Sr., types, establishment.  And that coalition has held together.

Is it coming apart between the more wilder voices like Palin, Rush Limbaugh, even Dick Cheney, and the more established people who have to win elections and raise money?  I‘m asking you, Michelle, is there a divide or isn‘t there?

LAXALT:  There is a divide.  There is absolutely a divide.  The fact is, the party has been wondering—they‘ve been examining their belly button because we got our heads handed to us in November.

MATTHEWS:  Right.

LAXALT:  But as to whether or not—who‘s going to win this fight, if they don‘t determine they are going to be all-inclusive—remember, Ronald Reagan was a Democrat who converted to the Republican Party and...

MATTHEWS:  Well, he united your party.

LAXALT:  Exactly.

MATTHEWS:  Who can do it today?  Fred Malek, who can unite your party today?  Can Sarah Palin unite the party?  Well, Newt‘s speaking tonight.  Let‘s give him a chance.  He‘s a brilliant guy.  But he didn‘t exactly leave the speakership under the most friendly terms.  He was sort of run out on a rail.

MALEK:  Come on, come on.  He‘s a great voice for the party, as is Sarah Palin.

MATTHEWS:  OK.  I‘m asking you.  Do you think he‘s great?

MALEK:  Where is the leadership for the party going to come—or how are we going to have a leader and how are we going to come back?  Look back to 1992, the last time we lost a big election as a—as a presidency.  We‘re going to come back with a great candidate in Virginia named Bob McDonnell, who I think is going to be...

MATTHEWS:  Right.

MALEK:  ... the next governor of Virginia, and Chris Christie in New Jersey...

MATTHEWS:  Good (INAUDIBLE)

MALEK:  ... who (INAUDIBLE) is running...

MATTHEWS:  I agree with you.

MALEK:  ... nine points ahead of Governor Corzine.

MATTHEWS:  Right.

MALEK:  That‘s going to start us back.  That‘s going to embolden other good people to run.  And that‘s where the future of our party lies.

LAXALT:  I agree with Fred.

MATTHEWS:  You mean down there at the middle level of governorships.

MALEK:  You bet.

MATTHEWS:  It‘s not going to start...

MALEK:  You bet.

MATTHEWS:  You‘re not going to be able to unite at the top, in other words.

MALEK:  Well, we will unite at the top, but you need a leader and now you have a number of leaders.  And they‘re all good...

MATTHEWS:  OK.

MALEK:  ... and they‘re all doing their part.  So look to the governors.

LAXALT:  Yes, self-appointed leaders.

MATTHEWS:  You were such a good party guy, Fred.  Let me ask you this, Fred, because I know you‘re such a great party—you‘ve served for, what, 15 Republican administrations so far.  You know.  Lookit, you got all your hair, you look great.  Let me ask you this, my friend...

(LAUGHTER)

MALEK:  Thanks.  Thanks.

MATTHEWS:  Do you really think Sarah Palin is a winner for you guys in New York, Connecticut, New England, Pennsylvania?  Do you think that she can bring back states like Virginia, bring back states—do you think she‘s a winner in the Eastern part of the country, or she has a peculiar popularity out there in the rural areas of the West, that that‘s really her strength, and maybe the South?

MALEK:  I think she has strength across the country.  I think she...

MATTHEWS:  She does?

MALEK:  She absolutely does.  She‘s a magnetic personality, a great speaker.

MATTHEWS:  OK.

MALEK:  She‘s really got energy and she‘s a great governor of Alaska.

MATTHEWS:  OK, we‘ve got a quote—I think we have a quote of hers.  Maybe we don‘t.  If we do, we should show it now, a quote of hers the other day which really is, I think, a bell ringer on the right.  I‘m not sure it sells among the center right.  But you decide, Michelle.  You‘re center right.  Here she is.  You tell me if this works in the moderate areas.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), FMR VICE PRESIDENTIAL CND:  We need to be aware of the creation of a fearful population and of fearful lawmakers being lead that believe that big government is the answer to bail out the private sector because then government gets to get in there and control it, and mark my words, this is going to happen next, I fear, bail out next debt-ridden states.  Then government gets to get in there and control the people.

(END VIDEO CLIP)

MATTHEWS:  Well, this is a governor speaking, and she‘s talking about the evils of government and how government‘s going to come and get you.  I think it‘s black helicopter stuff.  I think it‘s fearmongering.  I listen to her voice, I hear it.  They‘re coming to get us.

MALEK:  No, no, no.  You got it wrong.

MATTHEWS:  You don‘t hear it that way.  You tell me what you hear, Fred.

MALEK:  You got it wrong.

MATTHEWS:  You‘re her pal.

MALEK:  Here‘s what I‘m hearing, Chris.  The power of the people, the power of the private sector, incentive‘s with the private sector to bring this economy back, to make this country great, just like it has for generations—that‘s what she‘s talking about.  It‘s not big government that‘s going to bring this economy back, it‘s entrepreneurs and innovators around the country.

MATTHEWS:  Yes, but that‘s not—Fred, you sound like a reasonable business Republican, which is what you are.  She‘s talking about them coming to get us, the government coming to get us.  What does that mean?

MALEK:  I think she‘s saying big government is not the answer.  I think she‘s saying...

MATTHEWS:  OK.

MALEK:  She‘s saying more power to the people and more power to...

MATTHEWS:  Michelle, I think you heard what I heard.

LAXALT:  I think...

MATTHEWS:  What did you hear from her?  What do you hear?  Hear.

LAXALT:  First of all, I think she‘s the governor of Alaska.  She has a job that she needs to complete, and she can be measured on the basis of how she governs her own state first, as will everyone else as we start with the elections that you and Fred alluded to beginning this week.

MALEK:  Well stated.

LAXALT:  That‘s when the test will come.

MALEK:  Well stated.

MATTHEWS:  I think she appeals to the paranoia in the American system somewhere.  I think she‘s very good at it.  I think her people are worried about government.  They do worry about the black helicopters.  I got members of my family that think the government‘s coming to collect the guns.  She‘s right with those babies.  Anyway, thank you, Michelle Laxalt and Fred Malek.  Thanks for coming in tonight to talk about the big Republican fund-raiser tonight.  Newt Gingrich will be the keynoter.

Coming up: For the first time, Hillary Clinton‘s talking about her relationship with her former rival, Barack Obama, and her reasons for taking the job, a fascinating inside look at someone who often doesn‘t talk so openly about, well, the internal politics of being a Clinton.  We‘ll hear more from Secretary Clinton when we get back, a closer look at that amazing Clinton/Obama coalition.  That‘s what I think it is.  This is bigger than an appointment.  This is about a party unity measure that seems to be working.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Just a year ago, Senator Clinton—that‘s Senator Hillary Clinton—ended a bitter fight for her party‘s presidential nomination.  Now she‘s a top diplomat working for President Obama in what‘s best described as a coalition government leading both the Democratic Party and this country.  Is the coalition working between Barack Obama and the Clintons?  Are her political prospects really finished?  I mean electoral prospects.

Let‘s get to that eventually, but let‘s start with the real problem right now facing the country, peace in the Middle East.  Jamie Rubin is a Columbia University professor—he served as assistant secretary for public affairs during the Clinton administration—and Andrea Mitchell, of course, the expert on all things worldwide.  She joins us, of course, from the NBC network, correspondent—anyway, we got to get to this.

Let‘s take a look, both of you—thank you, Jamie.  Thank you, Andrea, as always.  Here‘s Secretary Clinton yesterday, on Sunday, talking about how surprised she was that she had this amazing career opportunity to be our chief diplomat.

(BEGIN VIDEO CLIP)

CLINTON:  I never had any dream, let alone inkling, that I would end up in President Obama‘s cabinet, but he was quite persistent and very persuasive.  And you know, ultimately, it came down to my feeling that, number one, when your president asks you to do something for your country, you really need a good reason not to do it.  Number two, if I had won and I had asked him to please help me serve our country, I would have hoped he would say yes.  And finally, I looked around our world and I thought, you know, we are in just so many deep holes that everybody better grab a shovel and start digging out.

(END VIDEO CLIP)

MATTHEWS:  Jamie Rubin, what do you think of that?  Is that a pretty good—well, a pretty good take on what happened?

JAMIE RUBIN, FORMER CLINTON STATE DEPARTMENT SPOKESMAN:  Yes, I think so.  It‘s interesting, President Obama was really the first person to get over the campaign, and he looked out and saw someone who could help him get the job done.

And I think, as we‘ve seen these last few months, there‘s an enormous amount of work to do, whether it‘s North Korea, whether it‘s peace in the Middle East, whether it‘s dealing with China on climate change, Guantanamo, the list goes on.  And so I think he wanted a strong ally.  And just as she did when she joined the Senate, Hillary Clinton has proven to be a team player who gets the job done, who‘s loyal and contributes to the efforts of President Obama‘s administration.

MATTHEWS:  Jim Baker, Andrea, the former secretary of state who was quite a public servant, and still is, said that the trick to this is not to show any seam between the president and the secretary.  There has to be a sense of them being the same person in terms of policy.  Is that standard being met?

ANDREA MITCHELL, NBC CORRESPONDENT:  I think absolutely.  I‘ve traveled all over the world with her, and she is always speaking about the president‘s priorities, about the Obama administration.  She has shown no sign at all of trying to do something specifically for Hillary Clinton‘s agenda.  There‘s been no daylight between them.

And she‘s learned that lesson.  She talked to all of her predecessors.  She knows how Colin Powell really suffered at the hands of the White House, the NSC...

MATTHEWS:  Yes.

MITCHELL:  ... the Pentagon, the vice president‘s office.  And she is making sure that there is no division here.

Look, his own political aides were quite surprised, and from our own friend and contributor Richard Wolffe‘s reporting, we now know that this came to Barack Obama even before I realized it.  You know, we broke that story, and when we broke it, it was during the transition.  But in fact, it was during the primary that he first thought of her as secretary of state and not a vice president.

MATTHEWS:  You mean something happened before you knew about it?

MITCHELL:  Absolutely.  Richard Wolffe has the best reporting on this. 

MATTHEWS:  Something happened before you, Andrea Mitchell, knew about it?  I find that hard to believe.

MITCHELL:  I think Richard Wolffe knew about it before Barack Obama knew about it. 

(LAUGHTER)

MATTHEWS:  Let me take a look.  Here is Secretary Clinton on her role and how she‘s working out in tandem with the president.  Let‘s watch.

(BEGIN VIDEO CLIP, “THIS WEEK WITH GEORGE STEPHANOPOULOS”)

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE:  Well, my role is as the chief diplomat for the United States of America. 

I spend a lot of my time on the problems that you would imagine, Afghanistan and Pakistan, the Middle East, Iran, but I‘m also working to create a strategic set of priorities that will guide our efforts. 

GEORGE STEPHANOPOULOS, ABC ANCHOR:  ... around.

CLINTON:  There‘s plenty of work to go around, but there are the transnational problems. 

I mean, the president asked me to lead the effort on food securities.  The president also wants us to focus on Haiti.  And, ironically, the United Nations...

(CROSSTALK)

CLINTON:  ... secretary-general asked Bill to be the special envoy. 

So, we‘re really going to have a—a—a united effort by our government and by the international community. 

(END VIDEO CLIP)

MATTHEWS:  Jamie, I think this is even bigger than foreign policy.  I think what‘s going on here is that Barack Obama, whether he knew he was doing it or not, has united the Democratic Party, and, therefore, united the—the ruling party of this country right now. 

Do you have a sense that—that this is bigger than just an appointment? 

JAMIE RUBIN, FORMER U.S. ASSISTANT SECRETARY OF STATE:  Well, I think there‘s really been no evidence so far that there is, as you say, any division in the party. 

Unfortunately, the one place where it may come in the coming week or two is where Congress is suggesting some liberal Democrats, that they‘re going to try to defund the wars in Afghanistan and Iraq.  And I think, with Secretary Clinton and Secretary Gates and others leading the charge, I think we‘re going to see whether the president is able to defeat that. 

I think he will.  And I think that this is a great opportunity to get the job done.  But, Chris, what‘s most important now is, I think, phase one is over. 

With the president‘s speech last week, all the decisions he‘s made on prisoners, on Guantanamo, on climate change, on international law, settlements, all of these things he said he would do during the campaign, and give this speech, phase one of the foreign policy of this administration is now over.

And now the table has been set, and the hard problems have to be confronted, like North Korea, like Pakistan, like Iran. 

MATTHEWS:  Right. 

Let‘s take a look at Secretary Clinton.  I was so impressed to see her over there in the Middle East with the president wearing the head covering, in—you know, obviously, in respect to the local culture. 

Let‘s take a listen to what she has to say on the Middle East.  Here is the secretary. 

(BEGIN VIDEO CLIP, “THIS WEEK WITH GEORGE STEPHANOPOULOS”)

CLINTON:  We are setting forth our views.  Obviously, decisions about how to go forward are up to the Israelis and the Palestinians.

But I think it is an appropriate role for the United States—and certainly it is what the president has decided—to make clear some of the obstacles he sees.  Now, remember, the Israelis made a commitment in the road map in the prior administration. 

STEPHANOPOULOS:  But they say that included an understanding for natural growth inside the settlements. 

CLINTON:  Well, that was an understanding that was entered into, so far as we are told, orally.  That was never made an official part of the negotiations as it was passed on to our administration. 

(END VIDEO CLIP)

MATTHEWS:  Look, the real issue isn‘t natural growth or movement within such—this is such a red herring. 

MITCHELL:  Right. 

MATTHEWS:  This is such a game that‘s being played.  Andrea, you know that.  The big focus is whether Bibi Netanyahu wants a deal on the two-state solution. 

(CROSSTALK)

MATTHEWS:  What role is Hillary Clinton‘s—what‘s really Hillary Clinton‘s role in that happening? 

MITCHELL:  Well, right now, Bibi Netanyahu talked to the president, talked to Obama, President Obama, today.  He‘s going to unveil his own peace plan in the coming days.

And we‘re going to see.  George Mitchell, her envoy, is now heading to the Middle East, if he‘s not already there.  He‘s going to follow up on the president‘s speech.  So, there‘s a lot of movement going on.  We will see what Netanyahu has. 

One other quick point I want you to make.  You asked me a couple of months ago, Chris, who is going to have control over appointing ambassadors?  And, at that point, I didn‘t know.  Well, the answer now is President Obama. 

The biggest clue to that was the ambassador to Japan, who has always, in the past, been a top-level political figure, the Howard Bakers, the Mike Mansfields, now it‘s a big contributor, this new appointee, a big contributor, to Barack Obama, very much over the objection of the State Department. 

MATTHEWS:  So, the president is insisting on his prerogative to name personal friends or supporters to these jobs?

MITCHELL:  Absolutely. 

MATTHEWS:  The way it‘s always been, it seems. 

MITCHELL:  And on...

MATTHEWS:  Let me—let me ask...

MITCHELL:  ... on top of which—one other quick thing—he‘s also insisting on having his own chief of protocol, which, until now, has been the prerogative of the State Department. 

So, there are some divisions. 

MATTHEWS:  I—I thought it was Capricia Marshall, Hillary‘s person. 

MITCHELL:  That—she‘s only going to have a partial job.  Her job is going to be here...

MATTHEWS:  Oh.

MITCHELL:  ... at the State Department.  The president will travel with his own chief of protocol.

MATTHEWS:  Yes, that‘s certainly interesting.

MITCHELL:  They‘re creating two jobs for the first time. 

MATTHEWS:  So, it‘s smooth sailing so far for this new coalition. 

Jamie, you agree?

And, Andrea, do you agree? 

Smooth sailing?

MITCHELL:  I do. 

RUBIN:  Yes, absolutely.

MATTHEWS:  Jamie?

RUBIN:  Absolutely. 

MATTHEWS:  OK.  I have been so—I am so impressed.  I like it when politics surprises me. 

Jamie Rubin, Andrea Mitchell, thank you so much. 

Up next:  We have heard all the bad things former Vice President Dick Cheney has been saying about President Obama.  Well, now Cheney is being defended by one of the most likable people on the Bush team, former lady—first lady Laura Bush.  Well, least popular defends—well, most popular most popular defends least popular.  Stick around for the “Sideshow,” which it always is. 

You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

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

First up:  Dick Cheney, the cleaner/picker-upper of the previous administration, is getting a bucking-up from the former first lady.  Here it is on today‘s “Good Morning America,” the most popular figure from the Bush era defending the least popular. 

(BEGIN VIDEO CLIP, “GOOD MORNING AMERICA”)

ROBIN ROBERTS, CO-HOST, “GOOD MORNING AMERICA”:  Dick Cheney has been extremely vocal in—in—and in criticizing the current administration.  Do you—do you agree at all with what he‘s saying or how he‘s going about it? 

LAURA BUSH, FORMER FIRST LADY:  I think that‘s his right, as a citizen of the U.S.  And I think he also feels obligated.  And, so, I—you know, I understand why he wants to speak out. 

(END VIDEO CLIP)

MATTHEWS:  Well, one of the most astute Bush-watchers, the conservative columnist David Brooks, says that all this Cheney kvetching is really aimed at Laura‘s husband.  Cheney wanted to keep Gitmo going, wanted to keep up the torturing.  It was Bush who blew the whistle, and Cheney is still fuming about it.  Interesting.

Next up: B-Rod.  Governor Blagojevich was on FOX this weekend, casting with his new title.  He now calls himself the anti-Nixon.  Here he is. 

(BEGIN VIDEO CLIP, “HUCKABEE”)

ROD BLAGOJEVICH (D), FORMER ILLINOIS GOVERNOR:  I have been railroaded.  I have been wronged, because I have done nothing wrong.

And I‘m the anti-Nixon, in many respects.  I‘m not trying to hide any information on taped conversations.  I have urged the state senate to listen to every one of those. 

(END VIDEO CLIP)

MATTHEWS:  Well, we have been listening to those tapes, and asking one of the supplicants for President Obama‘s Illinois Senate seat why he offered to hold an under-the-radar fund-raiser for the governor.  Those tapes B-rod wants us and the jury to listen to reveal that the former—or, actually, the future junior senator from Illinois did, in fact, offer to raise money for Blagojevich, who is now facing federal charges for an alleged pay-to-play scheme involving Burris‘ seat itself. 

That‘s why “The Washington Post” today called for Burris to quit the job B-rod gave him—quote—“Mr. Burris‘ entanglements with the disgraced ex-governor have been revealed in a political strip tease that continues to embarrass the people of Illinois.  Senator Burris proves why the power to fill Senate vacancies should rest with voters at the ballot box in a special election.  And he proves why he should resign.”

That‘s “The Washington Post” today. 

I wonder if his appearance on HARDBALL has anything to do with that editorial. 

Anyway, I have got to show you this one.  Say what you might about Arlen Specter.  The guy has been a Democrat, a Republican, and now a Democrat again.  He didn‘t vote for or against the impeachment of Bill Clinton, but for something called—which he called the Scottish verdict.

Well, he may have done it again.  Here he is, the battler, Arlen Specter, facing down some tough labor guys in Pittsburgh the other day who are demanding that he buckle down and vote for their card-check bill. 

You tell me, by the way—watch him now, Specter, and tell me, did he agree to vote for their bill or not? 

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER (D), PENNSYLVANIA:  I owe my reelection, in significant part, to the endorsement that the AFL-CIO has given me in the past. 

(APPLAUSE)

UNIDENTIFIED MALE:  You want my vote, I want yours. 

SPECTER:  And all—I want to thank you for all this publicity.

UNIDENTIFIED MALE:  You want my vote, and I want yours. 

(LAUGHTER)

SPECTER:  Well, I‘m going to...

UNIDENTIFIED MALE:  I have voted for you in the past.  You want my vote, I want yours. 

SPECTER:  Well...

(CHEERING AND APPLAUSE) 

SPECTER:  I—I understand your job is on the line.  And I understand...

(CROSSTALK)

UNIDENTIFIED MALE:  No, you‘re not...

(CROSSTALK)

UNIDENTIFIED MALE:  Your job is on the line. 

(CROSSTALK)

UNIDENTIFIED MALE:  Your job is on the line. 

SPECTER:  I think you will be satisfied with my vote on this issue about union organizing and about first contract. 

(END VIDEO CLIP)

MATTHEWS: “It‘s your job that is on the line.”  Anybody want to go into that business? 

Anyway, I‘m putting my money on Specter, that he finds his way to another Scottish verdict, something in the middle that nobody else ever thought about before.  That‘s our Arlen. 

Time now for tonight‘s “Big Number.”

Today, the Supreme Court refused to take up don‘t ask/don‘t tell, the law that says you can‘t say you‘re gay and still serve in the U.S.  military.  But this will surprise you.  How many Americans say they now favor allowing openly gay men and women to serve in the U.S. military? 

According to a new Gallup poll, 69 percent—a solid majority of Americans -- 69 percent favor ending the policy behind that don‘t ask/don‘t tell—tonight‘s “Big Number.” 

Up next:  President Obama plans to get even more involved in getting health care reform done.  Does he have the political muscle to deliver this year? 

And, tomorrow on HARDBALL, “MORNING JOE” host Joe Scarborough will be with us to tomorrow night to talk about his great new book, “The Last Best Hope: Restoring Conservatism and America‘s Promise.”

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

The big financial story at this hour, the Supreme Court has delayed the sale of Chrysler to Fiat, but the order issued by Justice Ruth Bader Ginsburg indicates the order may only be temporary.  A federal appeals court approved the sale on Friday, but gave opponents until 4:00 p.m. today to get the Supreme Court to intervene. 

Justice Ginsburg issued her order just before 4:00 p.m.  She could now decide on her own whether to extend the delay or ask the full court to decide.  It‘s unclear when she or the court will act. 

Meantime, a late-day rally erased a triple-digit loss by the Dow.  At the close, the Dow was up, but only by about a point-and-a-half—the S&P 500 down fractionally, and the Nasdaq lower by seven.

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

HARDBALL. 

MATTHEWS:  (AUDIO GAP) lead now on the health care reform fight beginning this week.  But his push for a public plan may cost him bipartisan support. 

Nine out of 10 Republicans on the Senate Finance Committee sent a letter to the White House today outlining their opposition to a public option.  So, does President Obama have the political muscle to get health insurance for the 45 million people who are now uninsured? 

Ceci Connolly is the health policy reporter for “The Washington Post,” and Jeanne Cummings is the assistant managing editor for Politico, which we rely on so much. 

Ceci Connolly, I have been listening to you on the phone, trying to

learn from you, sotto voce, what the heck is going on here.  Is there a

compromise, a Specter-like compromise afoot here, whereby the Republicans -

or at least handful of them—could sign on and pass this bill if it includes something like a public plan, something that‘s cheaper than the private companies offer for insurance? 

CECI CONNOLLY, HEALTH POLICY REPORTER, “THE WASHINGTON POST”:  Well, at the moment, Chris, as you know, people are trying to find that compromise, but it‘s not a particularly easy one. 

Most of the people that I have been talking to, especially up in the Senate, where they are really trying to get a bipartisan agreement, are saying that there are a handful of Republican senators that are willing to make some compromises. 

For instance, they might be able to give on that so-called employer mandate.  But the public plan is really a hot-button issue for them right now.  The only thing that I can see any number of Republicans supporting, as we sit here today, is an idea that Senator Olympia Snowe, the Republican from Maine, and a couple of others are talking about that they refer to as the trigger option. 

The idea is, you wouldn‘t even start with a public plan option.  It would just be there to maybe kick in later, if you see those insurance bills just continuing to skyrocket. 

MATTHEWS:  And that‘s the—Jeanne, that‘s the question.  The people that can‘t afford insurance right now have, in voting for Barack Obama, hope that they can get insurance at a reasonable, affordable rate. 

Is there any way to do that without a public plan, without a government-supported plan? 

JEANNE CUMMINGS, LOBBYING AND MONEY CORRESPONDENT, POLITICO.COM: 

Well, I‘m not sure that there is.  Obviously, the health insurance industry is making promises that they will cover everyone, but they have a long history of not doing so.  And, even then, cost become an issue as well. 

So, that is the reason some argue that there has to be some component here.  I think Ceci is correct—I hear the same thing—that this sort of phased-in process could well become the alternative, because Barack—and they need to find one, because Obama‘s problems are not just with Republicans. There are many conservative Democrats who are equally concerned about the idea of the public plan as well.  And so if they can craft a way where it‘s not immediately effective, then I think people can feel as though they can safely go back and say, I didn‘t really vote for it.  It will come into play if we need it later. 

MATTHEWS:  What about the idea of simply imitating what public employees get.  You and I talked about that.  You were tutoring me on that, Ceci, a while ago, the idea that one compromise could be to get the kind of plan for everybody that federal employees could get now. 

CONNOLLY:  Well, that‘s got some real appeal.  First of all, we‘ve heard in several political campaigns this notion of shouldn‘t every American be entitled so the same health coverage that members of Congress get?  So it‘s a nice, easy sound bite.  Politically, it‘s very attractive.  And it certainly represents a much more moderate approach to the role of government. 

I think the tricky thing there, Chris, is that you might lose some of the more liberal Democrats who say, oh, that‘s just a little bit of oversight.  That‘s not what we‘re looking for.  So this really becomes a delicate balancing act. 

MATTHEWS:  Let‘s take a look.  Here is President Obama.  He waded in on health care reform.  Now Senator Chuck Grassley, who is the top Republican on the Finance Committee, is going to decide this—here is what he Twittered the other day, over the weekend, “President Obama, you‘ve got nerve, while you‘re sight seeing in Paris, to tell us it‘s time to deliver on health care.  We‘re still on schedule, even working weekends.”

He later wrote, “President Obama, while you‘re sight-seeing in Paris, you said time to deliver on health care.  When you‘re a hammer, you think everything is a nail.  I‘m no nail.” 

Jeanne, this seems like high school.  Are they putting together the mixer two weeks from now, and they‘re arguing about how to do it?  This is about health care for the 40 to 60 million people that don‘t have it right now.  He‘s into this tit for tat Twitter. 

CUMMINGS:  Well, this is the danger of Twitter, because people pop off on these things.  And Senator Grassley has been known to speak off cuff and then have to go back and try to clean up what he said.  I‘m not sure that he wants to clean this up, but this clearly sounds like a man who‘s venting after a couple of long meetings over the weekend. 

MATTHEWS:  Somebody sitting in the ER right now, trying to get their kids taken care of, and they have a health threat facing them, a real emergency, and they look at the newspaper right now and they see that the United States senator who is the top Republican on the committee to decide health care is Twittering—or whatever—Tweeting these kind of high school comments about I‘m not a nail, and you‘re not a hammer. 

What are we talking about here?  I want your thoughts on this, Ceci.  I find it blindingly stupid that they‘re—I don‘t care if they use Twitter or a type writer.  I wonder why they‘re talking like this, talking like this? 

CONNOLLY:  It certainly is curious, Chris.  Although, as Jeanne points out, it wouldn‘t be the first time that Senator Grassley has had a kind of quick, hot, emotional reaction to something.  I imagine, Chris, he‘s also getting some pressure from within his Republican caucus.  Some of those members are probably getting a little nervous that after his nice lunch up at the White House, and his good relationship with Max Baucus—they may be nervous he‘s getting ready to cut a deal with Democrats. 

MATTHEWS:  Well, I like the idea, Jeanne, that they are going to reach some deal, perhaps, that allows for ultimately people are covered, even if it‘s they‘ll try something else in the private sector for a while.  If that doesn‘t work, they‘ll go to a public approach.  But to make a commitment this year that after fighting over this bill—well, this issue since Harry Truman‘s day, they‘re going to get it done.  They‘re going to make a commitment that we get national health care in this country. 

CUMMINGS:  That does seem to be the direction that we‘re going in, which is why this debate is becoming so intense, even with the outside groups, too.  They feel that this train is moving down the tracks.  And if you look at the White House‘s behavior before, Barack Obama has done this on the last couple of big issues.  He weighs in heavy right at the end, when he‘s trying to push out the legislation. 

MATTHEWS:  Yes.  Let me ask you last question, Ceci, is Harry and Louis, are they aboard this train?  Are they going to be on the side of health care this time, as opposed to bringing it down under the Clintons? 

CONNOLLY:  I gather that you‘re talking about those big insurance companies.  And right now, my sense of the industry is that they are almost in a framework of anything but the public plan.  So they‘re willing to make a lot of concessions, but you really got at the key issue here.  If there‘s a strong public government program, I think the insurance industry is going to fight it aggressively. 

MATTHEWS:  OK.  Thank you very much, Ceci Connolly for the “Washington Post” and Jeanne Cummings for “Politico.” 

Up next, can the Republican party fix the problems between the party establishment and the populist wing?  Between the people who get elected in the lower 48 and Sarah Palin.  Let‘s be blunt about it.  The politics fix coming up next.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back.  Let‘s get to the to the politics fix, with “Newsweek‘s” Howard Fineman, who is also an MSNBC political analyst, and the “Politico” Jonathan Martin.  You stoked this fire, Jonathan.  You built up this thing.  I got up this morning.  I went on my Blackberry.  There you were building up this bar room fight between the regular Republicans and the wilder ones, like Sarah Palin, over who is going to speak at their big fund-raiser tonight.  Who is winning this fight? 

JONATHAN MARTIN, “POLITICO”:  Well, I guess you can call it a draw, because Governor Palin, I‘m told, is going to be there tonight at this big GOP dinner, Chris.  But she‘s not going to speak.  Now, it‘s about 5:45 right now.  So we‘ll see what happens tonight at 7:30 eastern.  We‘re not totally sure until she shows up.  But that is the plan now that unfolds. 

But, Chris, you touched on it.  This is part of a larger battle between the political establishment in the GOP in Washington and Governor Palin and a lot of her grassroots supporters.  There‘s a tug going on here for the heart and soul of the party. 

MATTHEWS:  What do you make of this, Howard?  I think Rudy Giuliani is fishing in troubled waters here.  There he is at a baseball game in New York the other day with Sarah Palin, the liberal wing with the far-right wing.  It looks to me like he‘s up to something here. 

HOWARD FINEMAN, “NEWSWEEK”:  He may be up to something, but I‘m not sure I would necessarily describe this as a totally establishment versus outsider controversy here.  I mean, Sarah Palin‘s got some friends inside the Beltway—she probably doesn‘t want to admit it—who also wanted her at this dinner.  The fact is she was the vice presidential nominee.  She‘s a huge star attraction. 

She drew 20,000 people in upstate New York the other day, not currently known as strong Republican territory.  I think a lot of this was just a lot of egos clashing.  Palin‘s got one, Newt Gingrich has got one.  And I think it‘s further sign more of the disarray within the Republican party leadership than it is of some ideological struggle. 

MATTHEWS:  We had Michelle Laxalt on this show earlier tonight, Jonathan, and she was—obviously, she‘s very tempered in her speech, obviously turned off at the fact that those people in the party who have to raise money, like she did all those years, and have to get elected in all the states of the union, including—not just Alaska, but more moderate states—think that Sarah is a problem. 

She‘s sort of like the Schiavo case walking around the country.  She is an exhibit of the far right that doesn‘t seem to want to have good relations with the East Coast. 

MARTIN:  And a lot of Republicans won‘t say that on the record, but you talk to them privately, they‘ll say, look, we have to appeal to swing voters, to moderate voters in this country.  The kind of folks in places like suburban Philadelphia that you know so well.  The fact is, those are the folks that Sarah Palin turned off last fall. 

That‘s why I think there is some friction here, because the Republicans in Washington recognize, like Howard said, she does have this appeal among the grassroots.  She can command an audience.  She can bring in donors.  She can draw 20,000 people to a small town in New York state. 

But for the broader electorate, there‘s concern she‘ll sort of turn off moderate voters in this country that the party desperately needs to get back to be a majority party. 

MATTHEWS:  She took Florida right off the undecided list personally in the last election.  Florida had a shot for Bush.  We all know he could have done well down there, especially with more hawkish people.  She went in there and scared the Bejesus out of those people as some sort of theocrat and perhaps a know-nothing, to be blunt. 

FINEMAN:  Well, yes, I think she did scare a lot of people.  She did the same in places like eastern Pennsylvania, in the suburban areas around Philadelphia.  Because she came off as so anti-science and so forth -0 so on and so forth.  I‘m just saying, as between Newt Gingrich, who is the main speaker at this dinner, and Sarah Palin, I‘m not sure ideologically, and in terms of scaring moderates, that there‘s that much difference between them.  I guess that‘s my only point. 

MATTHEWS:  I have to tell you, time does heal all wounds.  Aren‘t you amazed at how Newt Gingrich has come back almost like Lazarus, Howard?  The guy was sort of taken out of this town on a rail.  He was tarred and feathered.  He had all kinds of personal problems we will not go into.  He had all the problems you can imagine Clinton had, on top of the fact that he had blown it politically in the Congress.  He had lost all credibility. 

Now, he‘s back as the Obi Wan Kenobi of the Republican party. 

FINEMAN:  He‘s a statesman. 

MATTHEWS:  How‘d that happen? 

FINEMAN:  If you hang around long enough, that‘s part of it. 

MARTIN:  Survivor. 

FINEMAN:  He‘s a survivor.  He‘s a thoughtful guy.  I mean, there‘s no question that he‘s a fascinating guy to listen to. 

MATTHEWS:  He is fascinating, the guy.  He‘s one of the world‘s great fire crackers.  We‘ll be right back with Howard Fineman and Jonathan Martin.  I want to talk about this governor‘s race.  I love off years—odd numbers years right after the presidential elections.  There‘s always a Virginia governors race.  There‘s always a New Jersey governors race.  They usually flip the results of the year before, which shakes everything up.  You‘re watching HARDBALL.  Let‘s see what happens this time. You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with “Newsweek‘s” Howard Fineman and “Politico‘s” Jonathan Martin.  Let‘s take a look at the new Pollster.com numbers on Virginia and the hot race for the nomination.  Terry McAuliffe against Creigh Deeds and, of course, Brian Moran, in the mix, the three of them there.  It looks to me, when you watch these polling numbers, that Terry McAuliffe is dropping; Creigh Deeds is going up; and Moran‘s also going up.  What‘s the significance of this race?  Howard? 

FINEMAN:  Well, it‘s very significant.  It will be the really first true test of the national landscape after Obama‘s election.  Republicans think they‘ve got a shot there.  They think their candidate, Bob McDonald, is a strong one.  And they think they can beat either McAuliffe or Deeds.  They think Deeds would be the tougher one to beat. 

MATTHEWS:  That‘s my assessment too.  What do you make of this, Jonathan? 

MARTIN:  This is my home state.  I can tell you that the Republicans both in Richmond and Washington, D.C. have been planning for a Terry McAuliffe race.  They wanted to run against Terry McAuliffe.  They did not want to run against a rural state senator that has the sort of credentials that you can‘t buy.  And the fact is Creigh Deeds, if he gets the nomination, and the polls seem likely that he will right now, is going to be the toughest of the three for the Republicans.  And it‘s going to be really to caricature as a liberal, given the fact that he comes from Bath County. 

MATTHEWS:  Is this going to be a bad shot for the Clintons if McAuliffe gets whacked tomorrow night? 

FINEMAN:  Yes, I think it‘s part of it.  I actually think that‘s one of the things that‘s dragging Terry down.  That‘s why one of the reasons I think, although they didn‘t say it, exactly—why the “Washington Post” endorsed Deeds.  In a low turnout election, if this is one, an endorsement by the Post still matters a lot in northern Virginia. 

MATTHEWS:  Why do you think they endorsed Deeds?  They don‘t like Clinton? 

FINEMAN:  Could be. 

MARTIN:  It‘s because he didn‘t have any ties, Chris, at all to Virginia.  Until last summer, when he expressed his desire to run for governor, he had really no ties whatsoever to the state‘s political establishment. 

MATTHEWS:  But I bet you he had a pollster that told him he could win. 

(CROSS TALK)

MATTHEWS:  It‘s different from a guy like Tim Kaine, who moved to Virginia years ago, put the years in and the time.  Terry seems like he‘s acting like he‘s entitled to something just because he‘s a big shot in the Democratic party.  Locals don‘t like that kind of thing, even in northern Virginia. 

MARTIN:  You have to pay your dues for a few years. 

MATTHEWS:  All my life, I watched famous names go down in this area, whether it‘s Tim Schriver, it‘s  frank Mientkiewicz (ph).  You know what I mean?

MARTIN:  Ollie North too.

MATTHEWS:  They don‘t like celebrities.  They don‘t like Celebrities, Oliver North.  It‘s an interesting thing.  Howard Fineman, Jonathan Martin, right now it‘s time for “THE ED SHOW” with Ed Schultz.

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

END   

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