updated 3/1/2010 10:42:09 AM ET 2010-03-01T15:42:09

Guests: Jim Moran, Elijah Cummings, John Heilemann, Mark Halperin, Liz

Benjamin, Steve Kornacki, Lynn Sweet, Ron Reagan

CHRIS MATTHEWS, MSNBC ANCHOR:  The charge of the Democrats.  Let‘s play HARDBALL.

Good evening, I‘m Chris Matthews in Washington.  Leading off tonight, full speed ahead.  Is there really any point anymore in Democrats and Republicans talking about health care?  As Jonathan Cohn of the “New Republic” put it today, the Republicans call for ripping up the bill and started all over is not a plea for compromise, it‘s a demand for capitulation.  So now the Democrats will go for reconciliation, a straight up or down vote that Republicans pretend has never been used before in recorded human history, but which they themselves have used many times before, including to pass the Bush tax cuts.  The Democrats may have the will, but do they have the votes?  Let the games begin.

Plus, order in the court.  There are times when a president has to take control and that‘s what Barack Obama did yesterday.  He was saying I‘m the boss again, no I‘m really the president.  Where has that guy been the last year?

And how many governors does it take to run New York State?  First, Eliot Spitzer resigned after being caught using prostitutes and today, his replacement, David Paterson, announced he‘s not seeking reelection or not seeking election in part because of accusations that he interfered in a domestic violence accusation made against a top aide.  You can bet Democrats are happy to see him go. 

Also, it‘s Palin versus Leno, actually Palin on Leno versus Romney on Letterman next week in a late night clash.

Finally, numbers game.  What is 43, we‘re talking about a president, have against 39, president 39?  We‘re talking about George W. Bush and Jimmy Carter and they‘re in a “sideshow.”

We start with the health care bill.  U.S. Congressman Elijah Cummings is a Democrat from Maryland and U.S. Congressman Jim Moran is a Democrat from Virginia.  Gentlemen, let‘s take a look right now at what we call on television a montage.  Here‘s White House Press Secretary—House White House Press Secretary Robert Gibbs today making a point a number of times.  Let‘s listen.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  I‘m going to let him make a decision and he‘ll communicate that next week.  The president will likely make an announcement next week.  Work through with the team some ideas and make an announcement next week.  Those questions are better left for when we have an announcement from the president, probably closer to Wednesday.  I don‘t again want to get ahead of what the president might announce next week.  I‘m going to let the president make a decision and announce that decision.  We‘ll likely make an announcement next week about the next steps forward. 

(END VIDEO CLIP)

MATTHEWS:  Well the word for the White House, gentlemen, is that next week the president is going to make an announcement about the status of health care and how the Democrats get it passed.  What‘s your assessment, Mr. Cummings, of what is going to happen next week when the president makes that announcement?

REP. ELIJAH CUMMINGS (D), MARYLAND:  Well, I‘m not sure exactly what the president will say, but I‘m hoping that he will say he will say that we are going to move forward, that we‘ve got to contain health costs, health care costs, and we‘ve got to move rapidly and we‘ve got a lot of people suffering and they simply cannot wait.

And I would imagine he may have some comments about yesterday‘s summit wherein it was clear that our Republican friends have rejected many proposals that are already in the bill that they have supported in the past, such as exchanges and making sure that everybody is mandated to have insurance, things of that nature.  These are ideas, Chris, for which the Republicans have supported in the past and now they come along when President Obama is proposing them and they suddenly say, you know, this is not good enough.  And there are many others, too, by the way. 

MATTHEWS:  Yeah. 

CUMMINGS:  So I think we have to move forward because this is a life and death situation.  I have people in my district who don‘t have insurance or who are going to fall under some very, very high premiums very soon and we can see that by what happened with Anthem Blue Cross Blue Shield in California when they just said they were going up on their premiums from 25 to 39 percent for individuals.  That‘s a real problem.  And I think that that‘s just a sign of what is going to happen in the future. 

MATTHEWS:  You know, I was thinking sometimes, Congressman Moran, when something happens, you can‘t see that it happens so fast and sometimes it happens so slow that you can‘t see it like Muhammad Ali knocking out Liston.  You can never actually see the punches.  But yesterday it seemed like it took seven hours for something to happen.  And maybe what happened, I want to ask you about this, an then Congressman Cummings again—is it what happened yesterday, the public saw that the Republicans don‘t really want a deal?

REP. JIM MORAN (D), VIRGINIA:  That‘s right.  That‘s it.  You know, the president needed one more time to show the American public this is what the Republicans have to offer.  And it‘s basically nothing.  They want to go back to the starting line but then they want to carry us backwards.  You know me, Chris.  I used to be a moderate Democrat during the Clinton years.  I am no longer moderate with these guys. 

They have radicalized because their whole approach to social policy, Chris, is survival of the fittest.  If you can‘t afford health care, tough, suffer.  But better that you suffer than what we tax the investment profits of wealthy people in this country.  They had nothing to offer, no exchanges, no subsidies, no malpractice suits, no matter of what nature.  They are not willing to compromise. 

Let‘s start all over.  And I think the president has made it clear if they have got nothing to offer, he‘s going to have to move forward, the speaker will get the votes, we‘ll have to go reconciliation but you know, we‘re on record voting for health care.  We‘re going to get a health care bill that all but 39 House Democrats and 60, et cetera.  So we‘ll get a bill.  I think we‘ll get it within the next—

MATTHEWS:  Are you that tough one?  Are you radicalized as well, Mr.  Cummings, that the Democrats have to do this alone now, that it‘s full steam ahead or nothing, because the Republicans have basically said we are not going to cover the 34, 30 plus million people who don‘t have insurance.  We‘re not going to do it.  You‘re going to have to do it.

CUMMINGS:  We were elected to bring about certain changes.  The American people said they wanted this and by the way, I get tired of hearing the Republicans say oh, we‘re trying to pass something that the American people don‘t want.  Well, if you look at the polling very carefully and the recent “Washington Post” poll, it says Americans do want a reform.  They want to get rid of pre-existing conditions. 

Let me tell you something, Chris.  Probably 95 percent of the people watching us right now, if they were to lose their insurance, they probably have some kind of pre-existing condition.  And let me tell you, if they‘re over 30, I can pretty much guarantee you they‘ve got a preexisting condition.  So what does that mean?  That means that folk would not be able to get insurance.  And as Congressman Moran said, basically what are the Republicans saying to them?  To hell with you?  We don‘t care?  Just die?  Get sick.  I mean come on, this is America. 

MATTHEWS:  Let‘s take a look at what Clyburn, James Clyburn, who is the number three man in your leadership said last night on this program.  Here he is.  Jim Clyburn of South Carolina basically laying out what looks to be the forward motion of where this is going to go right now.  Let‘s listen. 

(BEGIN VIDEO CLIP)

REP. JIM CLYBURN (D), MAJORITY WHIP:  Now this whole question that‘s floating around as to who goes first, that is not important.  What is important is to make sure that the found product does not have those special deals in there that the House find so offensive, that we have a very appropriate and fair way to pay for this and I don‘t think the House members will worry about who goes first with the vote so long as the process is one that will guarantee that we have a bill very close to what the president is proposing.

(END VIDEO CLIP)

MATTHEWS:  And here‘s Speaker Pelosi today with a little bit of a refinement on that as she addressed the question of whether the House of Representatives is ready to ahead and accept the Senate bill, assuming the Senate is going to make some adjustments and the House itself is going to make some adjustment in how this bill looks in final passage.  Let‘s listen now to Speaker Pelosi. 

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER:  What you call complicated process is called a simple majority.  And that‘s what we‘re asking the Senate to act upon.  Well, it‘s up to them.  Here are the three steps we‘re going through.  What is the substance?  And that‘s what we will be putting together and we didn‘t want to do that before we could hear from our Republican colleagues yesterday.  Secondly, what is the Senate able to do with a simple majority and then we will act upon that. 

(END VIDEO CLIP)

MATTHEWS:  Congressman Moran, it looks like people have been watching this now for more than a year what is going to happen in the end game is the House of Representatives is probably going to have to pass the Senate bill.  The Senate is going to have to pass a reconciliation measure by simple majority vote that adjusted the changes the House wants to see made.  And you also will have to make some adjustments by legislation separately. 

But this thing is going to happen.

MORAN:  It‘s going to happen.  You‘re one of the few people in the media, Chris, who understands how strong a speaker Nancy Pelosi is.  When she decides she‘s going to get the votes, she will get the votes.

MATTHEWS:  217.

CUMMINGS:  No doubt about it.

MORAN:  That‘s right.  Absolutely, Elijah.  She and Steny Hoyer and Jim Clyburn, they don‘t lose.  I think we‘ll probably pass the Senate bill as long as we get assurances, we‘ll take out the corn husker, kick back on all that kind of junk and we‘ll go—the Senate will take up reconciliation.  We‘ll get the bill.  We‘ll probably pass a few extra things like we did this past week, eliminating anti-trust exemption for insurance companies.  We‘ll let families keep their insurance until their kid is 26.  We may take away the special privileges of drug companies where they can‘t—Medicare can‘t negotiate for lower prices on behalf of Medicare beneficiaries. 

We‘ll fix this bill.  We‘re going to get a bill and then we‘re going to move to jobs and I think by November, it‘s going to be a very different scene than it is now nationally and the American people will realize we‘re on their side. 

MATTHEWS:  Mr. Cummings, do you feel confident that the Democratic Party, acting alone, with its majority, passing a huge health care bill, which changes the whole way we finance health care, can face the electorate come November and do well enough to hold the leadership of the Congress.

CUMMINGS:  Yes, I do, and the reason why I say that, Chris, is because we‘re on the side of what is right, taking care of Americans, making sure that our fellow citizens, some 31 million who now don‘t have insurance get insurance and also making sure that people are able to afford, continue to afford the health care that they have.  And I think the American people, when they look at what we will do, they will be very pleased with what we‘ve done.  And again, America will be better and Americans will be better off.  And one of the things that is so interesting, Chris, is one of the things I find so interesting about what the Republicans do, they don‘t just move the gold post.  They move the whole stadium.

MATTHEWS:  Well they‘re betting on victory in that new stadium.  We‘ll see what happens in the stadium that the American people walk into this November.  Thank you, U.S. Congressman Elijah Cummings and U.S. Congressman Jim Moran.  Coming up, regardless of where things go from here, President Obama was in control.  I think at yesterday‘s summit, I think that‘s what we saw.  No more guy yelling no from the belfry.  This guy was the boss yesterday.  We‘re going to see if my colleagues agree with that.  You‘re watching HARDBALL here on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Well the “National Journal” is out with its list of the most liberal and most conservative members of the Congress.  Here are the five most liberal senators and it‘s a five-way tie.  At the top, Ohio‘s Sherrod Brown, Roland Burris who replaced Barack Obama, Ben Cardin of Maryland and then both Rhode Island Senators Sheldon Whitehouse and Jack Reed  We‘ll have the five most conservative Democrats—actually most conservative senators later in this show.  HARDBALL returns after this.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  One day after the president‘s health care summit at Blair House, where do they stand?  And who won?  “New York” magazine‘s John Heilemann and “Time” magazine‘s Mark Halperin are co-authors of the blockbuster “Game Change.”  Number one best seller in “The New York Times.”  The best political writing maybe in history but certainly in the last couple of years. 

Gentlemen, thank you for joining us.  Now that I‘ve shined you up, the fight begins.  I think, and I‘ll run this out there by you, the experts, the best-sellers, maybe I‘m wrong.  I think I‘ll start with Heilemann, who might agree with me.  Here‘s the question.  Did the president have a goal yesterday, which was to reestablish the fact that he‘s chairman of the debate, that he‘s the presiding officer of this government?  Not somebody out at a Tea Party meeting somewhere and not this fellow about to watch who dissed him last fall.  Let‘s watch was done to him when he didn‘t have control of the room.  This was South Carolina Joe Wilson whacking at him in the belfry during his special session last year.  Let‘s listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  There are also those who claim that our reform efforts would insure illegal immigrants.  This, too, is false.  The reforms, the reforms I‘m proposing would not apply to those who are here illegal.

REP. JOE WILSON ®, SOUTH CAROLINA:  You lie.

OBAMA:  That‘s not true.

(END VIDEO CLIP)

MATTHEWS:  You lie.  I have never, in all of the years of covering and working up there, ever heard such insolence.  I thought yesterday was the president‘s ability to preside and keep order and be at least the chairman of the debate.  And I thought he did very well doing that.  And also showed some iron.  Your thoughts, John Heilemann, and then your colleague, Mark.

JOHN HEILEMANN, NEW YORK MAGAZINE:  Well, I thought Chris, I think you‘re right.  And I think it goes back even before this—the summit yesterday, earlier in the week when the White House put out its own health care bill.  I think the White House knows that this is it‘s time for them to lead and they need to retake control of the narrative around health care and the politics of it and so you saw them attach themselves to a specific piece of legislation, a specific proposal and then you saw the president yesterday taking control of that room.  I think doing what he always does, which is to command any room that he‘s in.  I mean, he is often the smartest guy in the room. 

Sometimes a little bit of a problem because he knows he‘s the smartest guy in the room and sometimes he can‘t help but show that he knows.  But he was, I think, in control throughout and also showed a lot of respect to the Republicans.  You know, he did—he gave them more credit than many people on the left do, by saying that the difference between them are legitimate, philosophical differences on health care reform. 

MATTHEWS:  Yes, but we never elected Rodney Dangerfield president, the late Rodney Dangerfield, he didn‘t get no respect, Mark.  Let‘s argue it.  You have a different point of view, I hear.

MARK HALPERIN, TIME MAGAZINE:  Well, Chris, with all due respect in the immortal words of the “Saturday Night Live” parody of John McLaughlin, “wrong.”  I think that if the goal here is to pass a big health care bill, I don‘t think in the room he commanded respect from Republicans.  I think he made a mistake calling them by their first names.  It might have been an attempt to ingratiate himself, but I didn‘t sense in the body language or in the aftermath reaction from the members of their staff, any sense of Republicans looked at Obama and said, you know what, he‘s our only president for the next three years, let‘s work with him.

And I don‘t think in the news coverage or for any American who happened to watch the thing that he made any dent in the notion that people need to follow him, that he‘s our leader on solving the health care crisis.  So there were moments when I think I would have hired—he did something that would recommend him to be hired as a facilitator as a confidence but in terms of changing the dynamic of the country or the Republicans, I didn‘t see it at all. 

MATTHEWS:  I‘m looking at it in terms of getting 217 in the House out of that 255.  I look at in terms of getting at least 50 senators to join Joe Biden in passing it in the Senate.  In terms of winning on the most important test of this year, John, I‘ll go back to you, I think he had the troops aroused and the tougher and the more he dissed the Republicans, the more they like it, because they‘re tired of Rodney Dangerfield, they‘re tired of a gentlemanly professor who has had fruit thrown at him from the back of the room and he‘s tired of it.  Your thoughts, John?

HEILEMANN:  Well, I think there‘s certainly a large part of the Democratic Party that agrees with you on that, Chris.  The place where I agree with Mark, though we disagree on the president‘s performance, the place I agree with him is that I don‘t think he changed the dynamic that much in the sense that the key votes for him, in the House and the Senate, are not the people who want him to trash Republicans. 

The key votes for him are those who are the wavering, skitterish (ph) Democrats in the middle of the ideological spectrum.  There‘s five or six or seven of them in the Senate.  There‘s maybe a dozen of them in the House.  He still needs those votes to pass this even if he doesn‘t have any Republican votes, which I think it‘s pretty clear he‘s not going to have any now.  He still needs those Democrats and for those guys, they were looking for some sign that it was safe to side with the president and that they could win the political argument.  It‘s not clear to me that he did that yesterday at the summit. 

MATTHEWS:  Yes, I just think the country is tired of a government that can‘t function.  They want to see at least the chief executive who can keep order.  Let‘s take a look now at what looks to be the strategies of the two parties.  Let‘s start with the Democrats.  It‘s not quite as clear but it‘s pretty clear.  Here they are trying to make a point that the two sides really aren‘t far apart. 

(BEGIN VIDEO CLIP)

SEN. TOM HARKIN (D), IOWA:  Quite frankly, we may be closer together than people really think and actually getting agreement that we can get move forward on.

PELOSI:  Many of the provisions that are in our bill are initiatives put forth by the Republicans. 

OBAMA:  There are some additional ideas that Republicans have presented that we think are interesting and we also tried to include them. 

KATHLEEN SEBELIUS, HHS SECRETARY:  And I think there‘s a lot of agreement that the current insurance market really fails way too many people. 

SEN. CHUCK SCHUMER (D), NEW YORK:  I was glad to hear my friend Tom Coburn‘s remarks.  I think we agree with most of them.

REP. CHARLIE RANGEL (D), NEW YORK:  We are so close to national health insurance. 

SEN. MAX BAUCUS (D), MONTANA:  The main point is, we are not really that far apart. 

(END VIDEO CLIP)

MATTHEWS:  Well, anybody who has ever watched, by the way, the North Korean assembly meet, where everybody looks, acts very much in terms of their behavior, very similarly, and actually says the same thing, watch the Republicans now.  This is the closest thing to Pyongyang democracy I‘ve ever seen.  These guys—if you think the Democrats are swimming together, watch this. Here‘s their simple message.  Kill the bill and start over.  Let‘s listen to how well they stuck together in their talking points.  This is frighteningly—well, watch it.  This is something—we are not used to seeing this in the West.  Go ahead. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  This is a car that can‘t be recalled and fixed and that we ought to start over. 

UNIDENTIFIED FEMALE:  A lot of the people that I talked to want us to start over. 

UNIDENTIFIED MALE:  They would like us to start over.

UNIDENTIFIED MAKE:  We are talking about, as Leader Boehner said, and Mr. McConnell, Senator McConnell said, let‘s start over. 

UNIDENTIFIED MALE:  So if we can do that, start over—

UNIDENTIFIED MALE:  It‘s time to start over. 

UNIDENTIFIED MALE:  But we‘d like to start over. 

UNIDENTIFIED MALE:  What we simply want to do is start over, work on a clean sheet of paper. 

UNIDENTIFIED MALE:  Starting from a clean sheet of paper. 

UNIDENTIFIED MALE:  Let‘s start with a clean sheet of paper. 

REP. JOHN BOEHNER ®, OHIO:  Let‘s start from a clean sheet of paper. 

UNIDENTIFIED MALE:  Take the Etch-a-Sketch, go like this, let‘s start over.

UNIDENTIFIED MALKE:  Let‘s scrap the bill.

BOEHNER:  The American people want us to scrap this bill. 

UNIDENTIFIED MALE:  Start over. 

UNIDENTIFIED MALKE:  We believe a better approach is to go step by step. 

UNIDENTIFIED MALE:  If it means going step by step together.

UNIDENTIFIED MALE:  They want us to take a step back, go step by step, move through these issues step by step. 

REP. ERIC CANTOR ®, VIRGINIA:  That‘s why we continue to say go step by step.

BOEHNER:  Let‘s tale a step by step approach.

UNIDENTIFIED MALE:  What American families want is a common sense step by step approach. 

(EMD VIDEO CLIP)

MATTHEWS:  Mark, you said the president was overbearing.  Said, OK, give me a score card for that kind of behavior.  It was like the little red book they were waving in their hands.  I mean, these guys have never heard such synchronized swimming by the words. 

HALPERIN:  We could have saved time by just having Frank Luntz go and just say the same thing over and over.

MATTHEWS:  That‘s what I was saying last night. 

HALPERIN:  It‘s crazy.  Look, the Republicans—one thing they did really well, they did a lot well—better than—

MATTHEWS:  Was that good to look like clowns?

HALPERIN:  Let‘s pace that over seven hours.  I think what was good about it is they were playing to their strengths because the research does show that the country wants to start over.  And what they don‘t want is for this thing to go through because they opposite it on the merits and because it will give Obama a big win. 

They were on the door step of this before the Massachusetts Senate race.  And even though the bill is unpopular now in some ways, if they pass something, it is going to shake things up in an unpredictable way.  And right now what Republicans want is the trajectory they‘re on to November to continue because that‘s the game they played all year. 

MATTHEWS:  Let me tell you my game.  I‘m going to play that as often as we did “macaca.”  We are not going to leave that little montage.  Your thoughts, John Heilemann?  I think the Republicans look like non-thinking people.  Let‘s put it that way, the way that they almost were hypnotized in their repetition of those terms. 

HEILEMANN:  Well, the certainly were robotic and frighteningly on message.  But I would say, you know, if you compare it to how they sounded in 2009 when they were talking about death panels and they were talking about socialism and talking about a government takeover of the health care system, they actually sounded more reasonable in this meeting than they had sounded and less lunatic than they sounded in a lot of 2009.  I think that was part of the goal.  They put Lamar Alexander up there to put a folksy spin on things.  They wanted to seem like they weren‘t crazy and although they seemed like robots, they seemed like sane robots.

MATTHEWS:  OK, in that spirit, you guys actually disagreed on a couple of points.  Congratulations again on your book.  I‘m so impressed.  The book is “Game Change.”  This weekend when you‘re visiting your stores, where you buy books and look at them and get your cup of coffee, buy a copy of “Game Change.”  Thank you John Heilemann and thank you Mark Halperin. 

Up next, it‘s 43 versus 39.  What‘s George W. Bush‘s beef with Jimmy Carter?  You are going to catch it now.  The answer is coming up in the “The Sideshow.”  Talk about old fights.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Now for “The Sideshow,” first up, he‘s back.  He‘s got a book coming out in November and god knows who wrote it, but former President George W. Bush was back in Washington today hyping the thing.  While doing so, he managed to take a shot at a former Democratic president, Jimmy Carter.  “Politico” got it all from a Bushie who was present at a meeting with the former meeting with the former president and texts this little sugarplum quote.  “I have no desire to see myself on television.”  This is George W. speaking.  “I don‘t want to be a panel of formers instructing the currents on what to do.  I didn‘t like it when a certain former president and it wasn‘t 41 or 42 made my life miserable.” 

Well, not 41, that‘s George Herbert Walker Bush.  Not 42, that‘s Bill Clinton, which, of course, leaves former President Jimmy Carter who I can bet actually enjoyed causing some trouble for W. 

Speaking of the old guard, Dick Cheney got a call from President Obama on Wednesday to wish him a speedy recovery from his recent heart trouble.  Here‘s the bulletin from Cheney‘s assistant.  Quote, “The former vice president thanked him,” that‘s president Obama, “with a call and they enjoyed a pleasant, non-substantive conversation.”  Pleasant, non-substantive conversation.  Why the need to include non-substant?  Why couldn‘t he have just left it at “they had a pleasant conversation?”  Anyway, I wish the former vice president well, as well.  I hope he gets through it all so I can keep pronouncing his name correctly for decades to come—Cheney.

Now for the magic number tonight.  It harkens back to one of the nerdier moments at yesterday‘s Blair House Senate.  Republican Mitch McConnell‘s dispute over time.  Mitch McConnell.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL ®, KENTUCKY:  And just in terms of trying to keep everything fair, which I know you want to do, to this point the Republicans have used 24 minutes, the Democrats 52 minutes.  Let‘s try to have as much balances as we can.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  You‘re right. 

There was an imbalance on the opening statements because I‘m the president. 

And so I made, I didn‘t count my time in terms of dividing it evenly.

(END VIDEO CLIP)

MATTHEWS:  So after the seven-hour summit how many more minutes the Democrats not including the president have to speak in the summit than Republicans, four, four more minutes than Republicans; the so-called Democratic advantage at yesterday‘s day-long summit.  Four, a count of four minutes more for the D‘ than the R‘s.  Tonight‘s not so big number.

Up next, a big bombshell out of New York: Governor David Paterson will not seek election after all.  He‘s been staring at a scandal and facing serious questions about the way he responded to a domestic abuse complaint against a top aide of his.

You‘re watching HARDBALL.  What a big surprise that was on his party.  Well, you‘re watching HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MILISSA REHBERGER, MSNBC CORRESPONDENT:  I‘m Milissa Rehberger.  Here‘s what‘s happening.  The Chairman of the House Oversight Committee is accusing Toyota of withholding key evidence on safety defects.  Congressman Ed Towns says Toyota settled numerous lawsuits by drivers who are injured in crashes to avoid disclosing testing data highlighting potential safety issues.

About a million homes and businesses are without power in the northeast as a major winter storm dumps heavy wet snow across the region.  Thousands of flights have been cancelled at airports from Boston to Philadelphia.

Gatorade says it is dropping its endorsement deal with Tiger Woods.  This is the third major endorsement deal to come apart since the scandal.

A very strong magnitude 7.3 earthquake struck off the coast of Japan‘s southern island of Okinawa.  So far there are no reports of major damage or injuries.

Stocks ended relatively flat on what amounted to a snow day on Wall Street.  Investors that did show up grappled with a lackluster GDP report and a surprisingly sharp drop in home sales.

Now back to HARDBALL.

(BEGIN VIDEO CLIP)

DAVID PATERSON (D), NEW YORK:  We have times in politics when you have to know not to strive for service but to step back.  And that moment has come for me.  Today I am announcing that I am ending my campaign for Governor of the State of New York.

(END VIDEO CLIP)

MATTHEWS:  A tough moment.  Welcome back to HARDBALL.

That was New York Governor David Paterson, announcing he will drop out of the governor‘s race.  He will not seek election in his own right.  He addressed the latest problems for his administration.  On investigation to whether Governor Paterson and state police improperly contacted a woman who had made domestic violence allegations against a close Paterson aide.

(BEGIN VIDEO CLIP)

PATERSON:  I am looking forward to a full investigation of actions taken by myself and my administration.  But I give you this personal oath.  I have never abused my office, not now, not ever.  And I believe that when the facts are reviewed the truth will prevail.

(END VIDEO CLIP)

MATTHEWS:  Liz Benjamin writes for the New York Daily News and Steve Kornacki writes for Salon.com.  Let‘s start—I‘m sorry there is Ron Reagan.  Somebody had the old script in my hand here.  I‘m sorry.  And so is Steve Kornacki, I know Ron Reagan is there and how we got him up so early.  Let‘s go back to Liz Benjamin.

Liz, give me the facts here as coldly as you can.

LIZ BENJAMIN, NEW YORK DAILY NEWS:  Well, you pretty much hit the nail on the head there.  You talked about this top aide is actually his body man.  The gentleman‘s name is David Johnson.  He has been with David Paterson for about 10 years up until about two days ago when he was suspended without pay in the wake of a “Time” story that found that there were allegations of a domestic abuse by a woman who had been with him for about 4 years, a live-in girlfriend.

And subsequently the case was dropped because she failed to show up and that was 24 hours in court; 24 hours after she received the call or spoken on the phone with governor.  There‘s some dispute about who called who at that point.

And also it turns out that the head of the governor‘s personal security detail went to this woman‘s house and talked to her and she said in court testimony that she felt that the State Police were trying to her to drop the case.

MATTHEWS:  Is it—what would be the legal piece of this?  Is this a question of actual intimidation or is it—the call itself?  And is any call in such a matter considered interference or is it an intimidating type of call which involves perhaps even use of the law?

BENJAMIN:  Well, I think the real issue here, is abuse of power.  I mean you‘re talking about the State Police, the chief executive, the governor of New York who is in control of the state police, which is a law enforcement agency, has them at his disposal to go and do his bidding in a political manner, I mean, that‘s ridiculous.

MATTHEWS:  Yes, well, certainly the use of police that obviously changes the nature of it.  If the police are involved it‘s not just a political call, or some sort of counseling.

Let me go right now to Steve Kornacki on this, I think this makes a lot of Democrats very happy.  And certainly—didn‘t Rahm Emanuel make a call a while back several months ago to the governor urging him not to run for election?

STEVER KORNACKI, SALON:  Well, the guy in the White House who made the move was actually Patrick Gaspar (ph) --

MATTHEWS:  Ok, it wasn‘t Rahm, ok tell me who made the call?  Was that at the direction of the chief of staff or on his own?

KORNACKI:  Patrick Gaspar—well Patrick Gaspar (ph) is a New York guy don‘t forget, you know that‘s where his roots are.

MATTHEWS:  Yes, but he could make this call without the president or the chief of staff‘s push?

KORNACKI:  Well, if you look at Patrick Gaspar, he‘s played a very key role in a number of political moves the White House made.  He made a number of bold political moves they‘ve made in the last year.

MATTHEWS:  But who gives them license to make these calls?

KORNACKI:  Oh, I—look, I‘m sure Emanuel does but if you look at Paterson he‘s taken—excuse me, if you look at Gaspar who‘s taking the particular interest in New York state and if you look at the move that was made with David Paterson back in September with the White House, it was rather extraordinary.  I have to say Gaspar has made some good moves, I think this is one of the bad ones.  Because if the White House was telling Paterson, you know back in September is what Democrats, you know throughout New York, already knew at the time.  He couldn‘t win in 2010.

MATTHEWS:  Ok.

KORNACKI:  He was going to need to get out.  You need to let that process play out.  When the White House did that, Paterson dug in his heels.

MATTHEWS:  I know that.

KORNACKI:  And until the end of February and look at this.

MATTHEWS:  Well, how far—how far could that push come from Liz do you know.  Did it come from the president‘s chief of staff?  I assume a lot of this is, I always figure the top guy makes the calls, even if it was Rahm he did it with the approval of the president.  This is a big decision to call the governor of New York and say don‘t run for election.

BENJAMIN:  I think that- -

MATTHEWS:  Staffers don‘t do that.

BENJAMIN:  No.  The implication was always that it was done with at least the understanding and the tacit approval of everyone involved.

But I do agree with Steve Kornacki here, that it‘s you know, it was an unusual thing to do.  It was a shocking thing to do and also the governor always never really acknowledged that that was the case.  He said that there was some concern expressed to him about his poll numbers but never he was actually asked to be—to leave the race.

MATTHEWS:  I see.  It could all be true but the way people talking politics it‘s never so direct as a lot of people would like to see it in print.

Let me ask you a final question.  Does this make everybody happy, Steve?  It seems like Andrew Cuomo now, doesn‘t get involved in an ethnic kind of battle like he was before.

KORNACKI:  Correct.

MATTHEWS:  But the last time he went for statewide office at the governors level.  This clears the air, it seems to me, so he can run if he wants to now.

KORNACKI:  Oh, yes and well, he wanted to all along, he was going to all along.  And the question was they needed to find the pretense to get him in the race.  And they were struggling to come up with the right time and the exact right way to do it.  This answers that.

I happen to believe Paterson was probably a goner anyway even if this story never happened.  You have the state convention coming up in a few months.

MATTHEWS:  Yes.

KORNACKI:  He was going to struggle to get the 25 percent to even qualify for the ballot.  He was facing a 50 point deficit in primary polls.

MATTHEWS:  I see.

KORNACKI:  He was going to reach to a point where he had to say how much humiliation can I take.  But yes, Andrew Cuomo is the next governor, that‘s the upshot.

MATTHEWS:  Ok, Liz, thanks so much for being on tonight and have a nice weekend and you too, Steve Kornacki.  We have a little bit of housekeeping we need to do right now.

MSNBC‘s Willie Geist, my colleague, is up there in Vancouver at the Winter Olympics—Willie.

WILLIE GEIST, MSNBC CORRESPONDENT:  Chris thanks for loaning us a couple of minutes here.  And the show that preceded your—the MSNBC Olympic update show, we did what we thought was a phone interview with Team USA goalie Ryan Miller.  It turned out it was not Ryan Miller, we‘ve learned since.  We are the victims of a prank.

Luckily we have the real Ryan Miller, the goal keeper for the Team USA hockey team here.  First and foremost, Ryan, please accept our apology.  It‘s a mistake that never should have happened and we misrepresented your name.  And we regret it deeply and I personally feel terrible about it.

RYAN MILLER, U.S. OLYMPIC HOCKEY TEAM:  Oh, no problem.  I appreciate a good prank.  But I do try to keep my reputation.  Everybody in the Olympic has taken things very personally.  So I just want to clear it up that I wouldn‘t be guaranteeing the gold medal and I look forward to a great game to compete for a gold medal, though.

GEIST:  Well, that was one of the things that the prank caller said, was he pretty much guaranteed if USA played Canada, that the USA would win the gold.  So let‘s just confirm you are not predicting a gold medal yet for the United States.

MILLER:  No, I don‘t make predictions, I like to play the game and you know we have a strong team and we gave ourselves a chance.  We‘re looking forward to a great game and—you know right now, we don‘t know who we‘re facing.  So we‘re hoping to whoever make it through, it‘s going to be a nice competitive game and it‘s going to be a lot of fun for both sides and all of the hockey fans around the world.

GEIST:  Well, I know you don‘t want to look too far ahead, but if this were the United States-Canada game, what would that atmosphere be like, Ryan?

MILLER:  It would be outstanding.  I think it would be a great thing for hockey.  It‘s been a long time since we‘ve faced the offer of a big championship and it would be exciting.  But we will play whoever for that medal.  I‘ll tell you that much.

I just wanted to clear things up.  I got a few minutes (ph) of this from friends and a lot of different PR staff on different NHL teams are getting a hold of people and asking if I‘d really become that much different or that cocky because of this.

I assure you I‘m not that kind of a person.  Anybody who knows me knows I‘m pretty laid back, pretty quiet.  And I just enjoy playing the game.

GEIST:  Well, I thought it sounded fishy at the time.  And I‘m sorry I didn‘t stop it sooner than we did.  The real Ryan Miller, thank you so much for being so gracious.  And again, please accept our apology and good luck on Sunday.

MILLER:  All right, thanks Willie and take care.

GEIST:  All right, Ryan Miller, thanks so much.

Chris Matthews, we apologize to you too for eating up some valuable time of your show but it‘s something we had to do and thanks for letting us do it.

MATTHEWS:  Well, that‘s all right.  But you‘re (INAUDIBLE) up great lead-ins up there.  Thank you very much Willie Geist, up in Vancouver with the Olympics.

Up next, White House Social Secretary Desiree Rogers is leaving the White House—another person leaving—she was the one sort of flogged politically from letting those grifters (ph) into that state dinner last fall.  So what‘s her resignation all about?  What are the influences that have something to do with letting the door open there or somebody did.

This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  As promised, now here‘s National Journal‘s list of the top five most conservative U.S. senators.  At number five Jim Risch of Idaho; number four, Tom Coburn of Oklahoma; number three, Kentucky‘s Jim Bunning, who is holding a one-man filibuster right now against extending unemployment benefits and health insurance help for the jobless; number two, South Carolina‘s, Jim DeMint, no surprise there; and the most conservative member of the United States Senate, Jim Inhofe of Oklahoma, the man who believes global warming is a hoax.

More HARDBALL after this.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back and welcome to the “Politics Fix.”  We learned today that the White House social secretary Desiree Rogers will leave her job next month.  Rogers was at the center fairly enough of the Salahi gate-crashing episode last year.

Here‘s White House Press Secretary Robert Gibbs today talking about it.  He‘s kind of unclear but let‘s listen.

(BEGIN VIDEO CLIP)

ROB GIBBS, WHITE HOUSE PRESS SECRETARY:  She told them around at the beginning of the year that she thought it was time for her to go back to the private sector.  She‘s not been asked to leave; she‘s decided it‘s time to go back to doing other things that she wants.

UNIDENTIFIED MALE:  And the State Dinner incident did not play into this at all?

GIBBS:  I don‘t think it did.  No.

(END VIDEO CLIP)

MATTHEWS:  Radio talk show‘s Ron Reagan is now officially on this show having done a peek-a-boo a few moments ago; and Lynn Sweet of PoliticsDaily.com, she also joins us.  She‘s w the “Chicago Sun Times”.

You know, I have to say if you listen to things closely in this town without over vetting them.  Here‘s Gibbs a careful guy, I think, saying that she told the President and the First Lady some time around in the beginning of the year.  Well, some time around the beginning of the year is also some time or fairly close to the time of that incident with the Salahis getting into the White House when they shouldn‘t have gotten in.

Late November, this could have been like December.  And now he says—he‘s asked does it have anything to do with that event and he says I don‘t think it.  Did that is a very careful non-denial denial.  You‘re thoughts Lynn?

LYNN SWEET, CHICAGO SUN TIMES:  Well, I thought—

MATTHEWS:  It seems to me it‘s related but I don‘t know.

SWEET:  Well, I talked to Desiree Rogers today and I did ask her about this.  And I think it is—there were several factors to her decision, Chris.  I think this was one factor.  I think that it opened her eyes to how rough Washington is when somebody gets in—gets involved in a controversy in this town.

MATTHEWS:  You know it‘s a question and you know Ron you‘ve been here when your dad was here.  This town resents deeply somebody getting into the White House.  It‘s very hard to score an invitation to the White House.  And the fact that somebody would sneak in, it isn‘t just security.  I think we overstated that, it‘s the attitude of the chutzpah of people to abuse the White House and think it‘s some cute little trick to sneak in so they get their picture taken.

Look at this—it was obviously why they went in there.  These people are the kind of show-ups you see all over this town.  There they are, brazenly breaking in.  There they are.

REAGAN:  Yes.  Yes. 

MATTHEWS:  Somebody had to be blamed, Ron, that‘s my question.  And Desiree Rogers get blamed—

REAGAN:  Somebody did have to be blamed.  Yes, and as well, the Secret Service took a lot of blame for this and probably rightly so.  But you‘re right.  There was blowback at Desiree Rogers as well.

You and I have talked a number of times about the importance of the social aspect of Washington for a new president coming in or any president for that matter and the social secretary is a big part of that.  You don‘t often hear about the social secretary and that‘s pretty much the way they like it, but nevertheless, it‘s an important role.  It‘s not a job that‘s suited to everybody.

And maybe it wasn‘t really suited to Desiree Rogers and she may have come to conclude that and also, just decided this town is a little too rough for me.

MATTHEWS:  Well, it is rough for lot of people.

LYNN SWEET, CHICAGO SUN-TIMES:  Well, she found that it was rough.  I want to disagree, respectfully, Ron.  She was very well suited to the job.  This is really—the social secretary‘s a misnomer.  It‘s really director of events in the White House, from bill signings to anything that happens in the building that has people coming and going.

She was a creative force.  She put together the music series. 

Are they open—the White House?

MATTHEWS:  Ok, who‘s in charge?  Let‘s cut to the quick here.  Who‘s supposed to advise the president on which friends to make in Washington, which enemies not to make?

Because Nancy Reagan, Ron‘s mom and President Reagan‘s wife was very smart to pick some of the right friends; Catherine Graham, the people at “The Washington Post”, George Rose (ph) was already a friend.  She ended up getting a lot of good treatment from people that normally could have been adversarial.

On the other hand, the Clintons come to town.  And not to hit them again, they made an enemy of Sally Quinn.  Why do people hire people that don‘t know how to do it?  That‘s my point.

SWEET:  Well, I don‘t know.  And it‘s funny, because Sally Quinn wrote a story calling for Desiree‘s head after the dinner, kind of out of the blue.  She wasn‘t particularly—and that started the whole thing. 

MATTHEWS:  Because Sally clearly knows how it works.

SWEET:  Well, that—

MATTHEWS:  She‘s the wife of a former executive at “The Washington Post” and also—and very important in Washington, socially.

SWEET:  Right, who just got into a jam herself.

MATTHEWS:  Ok.  Let‘s not get into that.

SWEET:  But my point here is that this kind of rough treatment, there‘s a few story lines going on here.  One of them in the White House—there‘s just a whole mystique about all these Chicagoans in the White House. 

MATTHEWS:  Ok.  Are they all going home?  I see now—this is a bigger question.  Are they going back to Chicago?  You see that Axelrod‘s going back.  You see Plouffe apparently is going to run the campaign out of Chicago.  Has that movement begun?

SWEET:  Ok.  Actually David Axelrod told me this week that that is absurd.  There are no decisions made.  And I touched base with Valerie Jarrett and David Axelrod, excuse me, strike Valerie on that.  That there are no decisions made on that.

The Chicagoans are the top ones.  You have Rahm Emanuel who said he was only going to stay two years.  David Axelrod has talked about only two years.  Valerie Jarrett is someone who I think is in for the long haul.

MATTHEWS:  Ok.  I think it‘s fascinating what‘s going on because we‘ll see.

But anyway, the big question coming up now, Sarah Palin‘s coming on Jay Leno‘s on his come back show next week on Tuesday night on the same night as (INAUDIBLE) programming, Letterman has picked up Romney.  So we‘re going to have this first with a face-off in test of ratings.  That‘s Tuesday.

It looks like the Republican fight for the nomination has already begun between the front-runner by a hair or nose.  That‘s Mitt Romney over Sarah Palin who‘s right behind him in the betting odds right now.

We‘ll be right back with Ron Reagan and Lynn Sweet with more of “The Fix”.

You‘re watching HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with more of the politics.  Tuesday night‘s going to be a late night fight.  Jay Leno has booked Sarah Palin for his second night back hosting in “The Tonight Show” on NBC and David Letterman has booked Mitt Romney for his show.  So what‘s it all about?

We‘re back with radio talk show‘s Ron Reagan and Lynn Sweet of the “Chicago Sun-Times”.

But first, lady and gentleman, I want you look at this right now.  In-trade, that‘s the international betting odds program over in Ireland has Mitt Romney, Sarah Palin and John Thune in that order as the three best bets for the Republican nomination next time.  It‘s got Romney at 26, Palin right behind him at 24 and Thune as sort of the sleeper out there.

Ron Reagan, your thoughts about this and this fight that has already begun on NBC.

REAGAN:  Well, we‘ve got kind of a bifurcated Republican Party now.  On the one hand, you‘ve got the Sarah Palin TEA party-esque kind of end and then you‘ve got Mitt Romney who I guess could represent the establishment.  And neither side really trusts the other.  The TEA partiers don‘t have much use for Mitt Romney and Mitt Romney and the establishment as Jeb Bush pointed out yesterday when he talked about Sarah Palin‘s lack of understanding of issues realizes that Sarah Palin is in no way capable of actually functioning as president.  They‘re sort of horrified by the Palin candidacy.

Palin wins the ratings war though in this late night shoot-out I predict.

MATTHEWS:  Ok.  Good bet.

What do you think?  Are you saying that same thing?

SWEET:  I don‘t even think it‘s a contest.  Palin has enormous appeal across all the country, everyone knows who she is.

MATTHEWS:  For what?  Appeal as what?

SWEET:  Well, we‘re talking about late night. 

MATTHEWS:  Sizzle or steak? 

SWEET:  Sizzle.

MATTHEWS:  Sizzle but not steak.

SWEET:  Sizzle.  We‘re not talking—we‘re talking about a late night show and ratings.  We‘re not looking—are you looking at steak? 

MATTHEWS:  I‘m looking at all sale and no cargo, Ron Reagan, what do you think?

REAGAN:  Well, as Jeb Bush implied yesterday, yes, absolutely.  Who with the lick of sense, can look at Sarah Palin or listen to her and think, oh, yes, she could be president of the United States.  I mean could she find China on a map?  I‘m not sure.

SWEET:  Oh that‘s—you don‘t have to put her down like that to say she is a person who a lot of people find fascinating and interesting.  I mean I‘m not—

MATTHEWS:  What scares me is Randy Scheumann‘s writing her stuff and she could find China and go to war with it.  That‘s what I‘m worried about.

REAGAN:  But not capable.

SWEET:  Here‘s the thing.  A lot of people are not capable of being president who still have important voices and could lead local movements even if they don‘t end up in the White House.

MATTHEWS:  Ok.  Well said, but far too generous for this program.

Thank you Ron Reagan.

REAGAN:  I believe so, yes.

MATTHEWS:  It‘s good to have you.

Have a nice weekend and Lynn Sweet—he agrees with me.  Join us again Monday.  Thank you for the inside on Chicago.  Join us again Monday at 5:00 and 7:00 Eastern for more HARDBALL.  “COUNTDOWN” with Keith Olbermann starts right now.

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