updated 12/15/2010 11:54:01 AM ET 2010-12-15T16:54:01

Guests: Howard Fineman, Richard Wolffe, Pat Buchanan, Hampton Pearson, Terry McAuliffe, Robert Reich, John Feehery, Lawrence Eagleburger, Douglas Feith

CHRIS MATTHEWS, HOST:  Romney heads right.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews down in Washington.  Leading off tonight: Who‘s sorry now?  One week ago, all that noise of protest against the tax cut deal came from the Democratic left.  Now the noise is on the right.  Limbaugh, Palin, and hoping to be seen in the same club, Mitt Romney are all complaining about the $900 billion bill.  The question you have to ask is, What are they complaining about?  They love tax cuts!  This deal gives you huge tax cuts.  Are you complaining just because you don‘t want the president to have a win?  Is that your economic philosophy, downgrade Obama?

Also, whose presidency has President Obama been reading about lately?  Guess.  According to “The New York Times,” it‘s Bill Clinton‘s.  Clinton‘s emergence from the ashes of that 1994 congressional defeat could help explain what may be the most important political alliance in America today, Barack Obama and Bill and Hillary Clinton.  Two former Clinton administration heavyweights, Robert Reich and Terry McAuliffe, join us in a moment.

Plus, let the fun begin.  That loud noise you heard last night outside your window was the Republican snowball fight that broke out when word came that, yes, Michael Steele is running again as RNC chair.  But how can the party of Lincoln stop this guy, after all these wins, in fact?

And with every Republican secretary of state alive now lining up in favor of the new START nuclear treaty with Russia, why are so many right-wingers standing in the way?  We‘re going to debate what could be lost if this treat goes down.

And meet the new boss, not the same as the old boss.  The incoming GOP head of the House Financial Services Committee says—you‘ll love this—he‘s in business to serve the banks.  Didn‘t he get the memo?  You‘re not supposed to admit that!

We start with the tax cut deal.  The HuffingtonPost‘s Howard Fineman‘s an MSNBC political analyst, somewhere in warmer climes, I hear...


MATTHEWS:  ... and so is Richard Wolffe.  It can‘t be any colder than this place!

You know, I have to say, Romney—now, this guy is mobile.  This guy moves around.  He was for the health care plan in Massachusetts.  He was pro-choice in Massachusetts.  The minute he cleared the state border, or the commonwealth border, he‘s now hiding from the health care bill he passed up there, and he‘s obviously changed on abortion rights.  But here he is saying that he‘s against this tax deal.

Help me, Howard.  Help me, Howard!  I‘ve never needed you more.  How can a guy who claims he‘s now a supply-sider, loves all kinds of tax cuts, here‘s a bonanza in tax cuts across the board for all classes, including his, and he‘s saying he‘s against it.

HOWARD FINEMAN, HUFFINGTONPOST.COM, MSNBC POLITICAL ANALYST:  Well, there‘s both substance and music here, Chris.  The substance is in the op-ed that he wrote in “USA Today” today, Mitt Romney says his objection is that he wants these tax cuts to be permanent, not just two years, but permanent.  That way, they‘ll have a true supply-side effect.  What he‘s really trying to do is show that he understands the music of the Tea Party.

I just talked to Mark Moscos (ph), who‘s one of the founders of Tea Party Patriots, and he said what he doesn‘t like about the deal is it was, quote, “done in the dead of night.”


FINEMAN:  In other words, it was done with Barack Obama.


FINEMAN:  What a lot of Republicans and conservatives don‘t like...

MATTHEWS:  Yes, that‘s it!

FINEMAN:  ... and what Mitt Romney...

MATTHEWS:  Don‘t hug that guy!

FINEMAN:  OK.  What Mitt Romney...

MATTHEWS:  Don‘t hug him!

FINEMAN:  What Mitt Romney is playing to is the fact that in conservative circles, this is now known as the “Obama compromise,” and that in and of itself is enough to doom it in their eyes.

MATTHEWS:  So even a fist bump with Barack Obama is lethal now.


FINEMAN:  Absolutely.

MATTHEWS:  I mean, literally!

RICHARD WOLFFE, MSNBC POLITICAL ANALYST:  That is the Republicans‘ biggest concession here.  For two years, Mitch McConnell has played the strategy of, I‘m going to make him acceptable.  Don‘t give him any bipartisanship...

MATTHEWS:  We‘re going to kill...

FINEMAN:  Right.  Exactly.

MATTHEWS:  ... this guy.

WOLFFE:  And they‘ve done it really well!  They‘ve made him out to be the extreme...

MATTHEWS:  Did you hear Boehner the other day on “60 Minutes”?

FINEMAN:  Right.

MATTHEWS:  He said, We will not compromise with him.  Compromise is a “no” word.

FINEMAN:  Right.

WOLFFE:  But they have.  That‘s their problem!  They‘ve compromised with him!

FINEMAN:  Right.

MATTHEWS:  Well, they don‘t want to be...

WOLFFE:  Which opens up...

MATTHEWS:  ... seen touching.

WOLFFE:  Which opens...


WOLFFE:  Which opens up this room...


WOLFFE:  ... for the presidential pack to say, We‘re different.

MATTHEWS:  OK, let me get it straight now.  Richard, you first.  It seems to me we understand Limbaugh.  He‘s always out there.  That‘s the game he has to play as a radio guy.  He always criticizes the establishment.  Fair enough.  Palin is out there because—and by the way, her tweet is inscrutable.  I can‘t even—I‘m not knocking her brain or anything, but it doesn‘t make any sense, what she said, so I‘m not going repeat it.

Then Romney.  Romney is sort of what we consider the establishment Republican Party.  Is he trying kill that image by going over to the right so he doesn‘t run as the sort of the East Coast Republican?

WOLFFE:  Well, that‘s one piece of what he‘s got to do, shore himself up on the right.  But really, what he‘s doing in this op-ed is also saying, I‘m the business guy.  I have—I understand CEOs...

MATTHEWS:  But business wants tax cuts.

WOLFFE:  Yes.  Right.  But I understand the mentality.  He‘s saying it‘s the uncertainty argument that‘s playing in here.  And you know, the subplot is, Look, I‘m the guy who‘s run a business.  I have this executive experience.  There is a track here, there is a slot for someone who is a business guy, the fiscally conservative guy, to separate out from the pack.  There‘s Palin and there‘s everyone else.  The one track he can take is this...

MATTHEWS:  OK, let me ask you...


MATTHEWS:  Is there any doubt that if Boehner had—let me go to Howard.  Is there any doubt—to both of you, you start, Howard—that if Boehner and McConnell had introduced this exact bill as the Republican position, not the compromise, he‘d have been for it?

FINEMAN:  Yes, he‘d probably be for it.

MATTHEWS:  Romney, the whole bunch of these guys!

FINEMAN:  He‘d probably be for it.  Although...


MATTHEWS:  ... reason the progressives don‘t like it!

FINEMAN:  Well, OK.  Richard‘s right, though.  The true supply-siders say you have to promise the cut forever to make it work, which is ahistorical...


FINEMAN:  ... because Ronald Reagan had his tax cuts chopped, you know, back in the day.  But this is really—to me at any rate, at least talking to these Tea Party people, they took notice of what Romney did because it was something where Romney...


FINEMAN:  ... was saying, Hey, I don‘t like the inside deal.  You know, I don‘t like the fact they‘re dealing with Obama.  I don‘t like the pork in it, and the conservatives think there‘s pork in it.  You know, I‘m agin‘ it.  And that‘s the kind of thing that the Tea Party people want to hear.

MATTHEWS:  Just, I‘m agin‘ it.  That‘s the big part.  That‘s the verb.  Let‘s—here‘s Rush Limbaugh this Friday saying where he stands.  Here‘s Rush Limbaugh.  Let‘s listen.


RUSH LIMBAUGH, RADIO TALK SHOW HOST:  I now hope this deal fails.  I say it directly and officially!  Let the tax rates go up on January 1st.  Let them go up.  Wait for our cavalry to show up and deal with this the right way.


MATTHEWS:  Exactly!  That‘s what the president was worried about, what Rush Limbaugh beautifully put.  What he wants to happen is nothing gets passed this year.  The cavalry—I think he stole that word from me. 

Anyway, I‘m sure he came to mind (ph).  The cavalry, meaning the Republican

resurgent Republicans, they control the House, effectively are going to have control of the Senate on this issue, if you count the numbers.

WOLFFE:  We‘re in a situation where Rush Limbaugh and MoveOn agree with each other.  And on the other side, Newt Gingrich and Al Franken agree with each other.

MATTHEWS:  OK, what does that tell you?

WOLFFE:  That this politics is up—is up-ended!  This makes no sense.  So you have...


MATTHEWS:  Beyond the 20-yard lines directions, people basically are not going to go with an establishment deal, by nature.  You‘re not an insurgent if you go with an establishment deal.  By its nature, it‘s a compromise.  By its nature, a person on either end of the football field isn‘t going to like a middle-of-the-road compromise.


WOLFFE:  ... Newt Gingrich and Al Franken.  How did this happen?

FINEMAN:  The great irony is going to be—according to the conservatives I‘ve talked to today, they think that support for this among House Republicans is eroding by the minute.  As Craig Shirley (ph), who‘s a really terrific conservative consultant...


FINEMAN:  ... said, you know, the sands are shifting as we speak here.  Ironically—and Richard alluded to this—it‘s going to be the—if anybody‘s going to save this, it‘s going to be the Democrats in the House.  So we‘ve gone from a situation where we were focusing on the liberal Democrats and the Democratic Party...


FINEMAN:  ... trying to undercut this deal to the fact that, in the end, it‘s probably going to be the Democrats who are going to save it from attacks from Republicans in the House.

MATTHEWS:  We‘ll know that by the end of the week.  Here are the House Republicans you mentioned, listing—I‘m going to list them for you—who are against the—and the reasons.

Darrell Issa—he‘s, of course, from California.  He‘s head of the Reform Committee.  He says it‘s an incomplete effort.  Arizona‘s Jeff Flake, who‘s a fiscal conservative, says he doesn‘t like extending unemployment benefits without paying for them.  Utah‘s Jeffrey (SIC) Chaffetz says the bill is larded up the spending.  California‘s John Campbell says he‘ll vote no.  Indiana‘s Mike Pence, which I think might be running for president, a smart guys, says he‘s not decided yet, but he‘s not impressed.  That‘s a safe position right now.  And Minnesota‘s Michele Bachmann, who chairs the Tea Party Caucus, also does not like the tax deal.

Well, you never know what to make of her, but just start with her for fun, Howard.  Michele Bachmann is out there on the right, safely away from any establishment deals so that she can always lambaste whatever‘s going on or going right.

FINEMAN:  Well...

MATTHEWS:  Or wrong.

FINEMAN:  We should say, Chris, that in the end, this is going to pass because, as you know—wasn‘t there a congressman from Pennsylvania whose advice to everybody was vote for every tax cut and vote for every spending bill?  You know, and in the end...

MATTHEWS:  Well, actually, it was Jimmy Burke (ph) in Massachusetts, I believe.


MATTHEWS:  Jimmy Burke.  But go ahead.

FINEMAN:  Excuse me.  I didn‘t mean to demean Pennsylvania.

MATTHEWS:  One of my hometowns.  Go ahead.


FINEMAN:  You know, in the end—in the end, members are going vote for tax cuts, and they‘re especially for one that does have this...

MATTHEWS:  How does a Republican...

FINEMAN:  ...  (INAUDIBLE) appeal in it.

MATTHEWS:  ... against a tax cut for the richest people?

FINEMAN:  They‘re not going to.  They‘re not going to.

MATTHEWS:  I don‘t know how you—you want that on your permanent record that you voted against a tax cut?


FINEMAN:  What‘ll happen here is that the leaders in both parties will make sure they have enough votes to get the thing passed, and then they‘ll let everybody else dribble away who wants to make a statement of some kind one way or the other, whether it‘s on the left or on the right.

MATTHEWS:  That‘s what I think, but that‘s so cynical.

WOLFFE:  Are you surprised?


WOLFFE:  The show‘s called HARDBALL.

MATTHEWS:  (INAUDIBLE) you know what the word is.  It‘s called the “corral.”   And let‘s explain the corral.  You‘re leader of the—you‘re Bob—you‘re—what‘s his name—I can‘t remember the name.

FINEMAN:  Steny Hoyer.

WOLFFE:  John Boehner?

MATTHEWS:  Boehner—you‘re Boehner.

FINEMAN:  Boehner.

MATTHEWS:  And you‘re Terry—and you‘re Steny Hoyer.  So what you do is you hold about 30 or 40 members, and you hold them, like, in cattle stalls around the leadership.  You say, You can‘t leave the floor until we know if we need your vote or not.  And then in order of dislike, they bring them up and make them vote, right?  That‘s how they do it.  It‘s called corralling, right?


WOLFFE:  That‘s why they call it prime rib.  Right.

MATTHEWS:  That‘s how it works on the Hill.  Howard‘s down there covering the Mark Foley race for mayor, aren‘t you, down in West Palm Beach?


MATTHEWS:  Why don‘t you...

FINEMAN:  I‘m—I‘m—I‘m getting some perspective on the world inside the Beltway, let‘s put it that way.

MATTHEWS:  I think you‘re getting a much wider view and a brighter view and a warmer view of the—anyway, thank you, Howard.  You deserve a break at least for one day, at least.  Anyway, thank you, from the Southland, Howard Fineman, Richard Wolffe up here in the coldest Washington has been since I can remember.

WOLFFE:  Next year in Palm Beach.

MATTHEWS:  Coming up: The Clinton-Obama alliance is the most important political coalition we‘ve come across in years.  It‘s certainly helping to unify the Democrats, who can use some unity, but boy, is it interesting to watch.  We‘ve got two Clinton heavyweights coming here tonight, one who I think likes the tax deal, one who doesn‘t.  But they‘re both going to educate us.

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Former White House chief of staff Rahm Emanuel is, of course, running for mayor of Chicago, but first he has to prove he‘s a Chicagoan.  Emanuel took the stand at an election commission hearing today, arguing he owns a home, he pays property taxes, he votes in Chicago.  Two dozen objectors have said he shouldn‘t be eligible to run because he‘s lived in Washington nearly two years while working at the White House.  Duh!  Of course he has.  The hearing‘s expected to last two more days.

We‘ll be right back.



BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES:  There‘s never a perfect bipartisan bill in the eyes of the partisan, and we all see this differently.  But I really believe this will be a significant net plus for the country.


MATTHEWS:  Welcome back HARDBALL.  That was, of course, President Clinton last Friday, one of the most dazzling days in I think press room history when the Clinton-Obama alliance was certified on national television.  The unity they can bring to the Democrats is the question right now.

We‘re joined by two former Clinton top—top guys, Terry McAuliffe, one of his closet pals.  He served as campaign chairman for the Hillary Clinton campaign in 2008.  And also, we‘ve got a former member of the cabinet, former labor secretary Robert Reich, author of the book “Aftershock.”  We‘re showing it right now, Mr. Secretary.

Let me go to a couple points here.  Interesting.  I love it when numbers agree.  Right now, the support for the deal on taxes and job benefits, et cetera, et cetera, is 69 percent across the board.  You know what Bill Clinton‘s approval rating is in the latest Gallup that just came out?  It‘s 69 percent, one of those weird synchronicities which I Ching can explain to us all.

What do you make of that?

TERRY MCAULIFFE, FORMER DNC CHAIR:  Listen, I think what people are seeing (INAUDIBLE) they like it when people are working together.  I think what we saw in the last election, they hated to see the division.  They hated to see things not getting done.  And you know what?  They like the idea the Democrats and Republicans are working together to get the economy going.  The end of the day, people are very worried about their jobs, Chris.  They want to see this country move forward.  They want people to work together, quit the barking, let‘s get together and move the country forward.  That‘s what they want.

MATTHEWS:  Let‘s go to Robert Reich.  Your view—I know you‘ve criticized the bill in print.  Give me your overall, politically and economically, of what‘s going on between these two leaders, Clinton and Obama.

ROBERT REICH, FORMER LABOR SECRETARY:  Well, I think it‘s—Chris, I think it‘s very clear.  They‘re both pragmatists.  And Bill Clinton—obviously, he does not exactly dislike the limelight.  Bill Clinton‘s favor abilities, if you look at the national polls, are higher than they‘ve been any time in the last 10 years.  I think maybe people are kind of nostalgic for the 1990s and the economy of the 1990s.  They kind of—and they also like Bill Clinton‘s folksiness.  And his favorabilities, importantly, over the last three or four months have actually run about 9 to 14 percent higher than President Obama‘s favorabilities.


REICH:  Now, that‘s—that‘s big.  That‘s important because that means that regardless of any little tension that might have been existed between these two major political figures in the Democratic Party, historically, both of them kind of need each other, in a way.  Certainly, Barack Obama needs Bill Clinton.  And that means that they are going to utilize each other.

MATTHEWS:  Let‘s talk about the people who‘ve been critical of the president.  I mean, I looked at the geography.  The people who‘ve been most passionate come from the Northeast.  They‘re from very liberal areas.  They don‘t face many general elections.  Vermont‘s not exactly a purple state.  It‘s a good blue state for you guys.  In fact, it‘s further over than most states that way.  You‘ve got New York is pretty—downtown New York.  You got people like Anthony Weiner, really loud.

Is there a pattern there of Clinton people or Obama people making the most noise or both people are causing trouble here for the president?  It‘s been a real noise machine.  And I think fair enough.  We‘ve taken both sides here.  But I think—what‘s it about?  Is there a Clinton role here to play...


MCAULIFFE:  Listen, I think some people on the left—well, listen, we know the differences on the tax bill.  I think what President Clinton said the other day—it‘s not ideal, and there‘s a lot of things—and President Obama said it—there‘s things we like, don‘t like here.

MATTHEWS:  It‘s not a Democrat bill.

MCAULIFFE:  It‘s not a—we‘ve got to move it forward.  We‘ve got to do something to get this economy moving forward.  The payroll tax deduction, the 2 percent—you may not like the tax cuts for top wealthies (ph).  But we had to do something to move forward to get this economy moving again.  And I think for President Clinton, what he said the other day—a lot of things he didn‘t like about it, but you know what?  Overall, it will move this economy forward at a time—we‘re in a very difficult position with our economy.  It could go either way.


MCAULIFFE:  I think it‘s very important to move forward.  But he and President Obama, they worked together on North Korea.  You know, he sent President Clinton to North Korea.  He sent him to Haiti.  They have been working together...

MATTHEWS:  Is this a relationship now or a transaction?  You know what I mean.

MCAULIFFE:  It‘s been a relationship.  And I think the press hasn‘t wanted to see this, but President Obama‘s calling on President Clinton (INAUDIBLE) to go to North Korea, to go to Haiti.  You know, President Clinton did 133 campaign events, worked with the White House on going to those (INAUDIBLE)


MCAULIFFE:  They‘ve been working together.  They love this country! 

They both love the country and they want it to go forward.

MATTHEWS:  Robert Reich.

REICH:  Chris, I think—I think all the political transactions eventually become relationships and all political relationships eventually become transactions.  You know, Washington is a very peculiar kind of city, as you know.

Let me just respond to something Terry just said because I think that next year, on balance, this bill probably will have a stimulative effect.  Overall, I think if you‘re just looking at the economics, doesn‘t really make much sense.  I mean, the top already are taking home...


REICH:  ... almost 25 percent, almost a quarter of the entire national income right now before they get an extension of the Bush tax cut...


REICH:  ... nearly as much as the...


MATTHEWS:  What are they going to do with the money?

REICH:  ... middle class.

MATTHEWS:  What do they do with it?

REICH:  Well, what they do with it is they save it in a variety of financial instruments, many of which go abroad in search of the highest return...


REICH:  ... which is (INAUDIBLE) fine.  Absolutely fine.  But in terms of actually getting jobs back, you need more spending here, and it‘s not going to actually do very much.


MATTHEWS:  Do we want this country to save more or spend more?  I‘ve never got that straight.  Now that you‘re with us, I want to know, Robert.  What‘s better for you as an economist?

REICH:  Well, right now...

MATTHEWS:  What‘s better...


MATTHEWS:  ... for the holidays, spend or save?

REICH:  When you have this deep a recession, what you want, on balance, is for people to spend. 

Now, it‘s not in the interests—here‘s the irony—it‘s not in the interests of any individual family in the middle class—particularly when they‘re still under a huge weight of debt, and they are still worried about jobs, it‘s not in their interests to spend very much more.  If they were really being prudent and smart, they would hold back.

But from the nation‘s standpoint, as a whole, you want people to spend. 

MATTHEWS:  Right.  Right.  I always say, great Black Friday. 

Everybody is saving money today.  That‘s what they say.

Let me ask you about Rush Limbaugh.  We‘re all looking at the same facts.  And Robert Reich and I, we‘re all looking at the same numbers.  Rush Limbaugh was just on the radio.  We just showed him the other day.

Here he is saying, I wish they didn‘t have a bill. I wish they didn‘t cut a deal, because I‘m hoping they let the taxes go up again on January 1.  Then the Republicans come in.  They own the House, effectively.  I think they would have the vote in the Senate, too.  They are the ones that cut taxes. 

They‘re the ones that—he called it the cavalry, the same image I used.  Isn‘t that a pretty good argument for the progressives that the president had to do this, that both presidents had to this?  Otherwise, the cavalry would come in, in January and jam this down the throats of the country? 

MCAULIFFE:  This is what you have got to respect about President Obama.  And you‘ve got to give him credit for moving forward with this.

It wasn‘t about politics.  It was about doing something immediately, now, with our economy is such a very difficult position.  Put all the politics aside.  Let us move forward.  Let‘s do it jointly.  The public wanted to see our politicians working together.  They‘re sick of the fighting.  So I give President Obama tremendous credit for going out and... 


REICH:  I give Obama credit, too.  But I think the question is, why didn‘t the Democrats do this before the midterms?  I think there‘s a very interesting question. 


MATTHEWS:  ... great question.

MCAULIFFE:  Yes, I agree with that.


REICH:  A lot of people in the White House are saying they should have done it before.


MCAULIFFE:  I agree 100 percent with that.

MATTHEWS:  Robert, tell the guys who lost and the women who lost, like Dahlkemper in Erie.  If they had been able to go home and say, we got—or the guy—what is the guy, McManus?  Who is the guy from Staten Island?  Tell them that they could have... 


MCAULIFFE:   Or how about saying that we had the largest middle-class tax cut in history that the Democrats passed?  How about that we saved the economy?  How about with the stimulus money...


MATTHEWS:  I‘m going to take on Robert Reich. 

I love to argue with you, because you‘re smarter than me on most of this, so let‘s go.  Suppose this does go down.  Suppose the Democrats and the Republicans in the House raise hell, it doesn‘t get passed.  Taxes go up January 1, at least for a couple weeks.  The unemployment benefits get cut off.  The payroll tax does not get cut.  Accelerated depreciation doesn‘t happen.

As an economist, isn‘t that bad news for Obama, bad news for America, and if you are a real Republican partisan, a real hawk, on the other side, good news for you because it screws Obama‘s political situation?  Isn‘t it better to pass this?


REICH:  You also forgot the alternative minimum tax, one of the biggest pieces of this bill that‘s hidden in that bill, but it‘s very, very large. 

Initially, yes, if taxes go up right when the Republicans take over January 1, unemployment is cut off, it is very bad for the Democrats, but more importantly it‘s bad for the country as a whole. 

MATTHEWS:  Well, then why are you opposing this deal?  I read your column. 

REICH:  Oh, I‘m not—look it, right now, if it‘s a take it or leave it—Chris, if it‘s a take it or leave it right now, if we have no other alternative, I say we probably have to take it.  But that‘s the issue. 




MATTHEWS:  Things happen on HARDBALL. 


MATTHEWS:  Things happen here. 


MATTHEWS:  Robert Reich, a man of your I.Q., has turned this very show for the president of the United States and this new coalition. 


REICH:  What bothers a lot of people is that it is a take it or leave it situation.  And we should never have gotten into this hostage-taking to begin with. 

MATTHEWS:  I know.

But isn‘t that what this—let me just tell you, this is a real philosophical thing.  And Terry will get this and you will get it.  Politics today, because this damn 60-vote rule in the Senate, which says you can‘t get anything passed without a supermajority of 60 votes, which neither party ever seems to have, except in rare circumstances, when somebody dies or something, it‘s a sack race. 

Like every picnic, Fourth of July picnic, you guys have ever been to, there‘s a sack, and the Republicans and Democrats have a leg in that sack.  And you have to run the race together.


REICH:  Chris, I think you‘re overlooking one very important thing. 


REICH:  Number one, why is it that the Democrats and Obama did not take on the filibuster directly?  Why not go after the filibuster?  Why not go after the filibuster months, if not years ago, number one?


MATTHEWS:  OK.  You know who tried to do that in 1957?  Richard Nixon.  And the liberals wouldn‘t help him.  They supported the Dixiecrats.  So, that‘s the terrible history. 


MATTHEWS:  Because both parties are afraid of the other party dominating.


MCAULIFFE:  If you don‘t like it, toss everybody out.


MATTHEWS:  Robert Reich, if you break the filibuster rule, if you get rid of that 60 rule, you will be the most famous progressive in history, I think, until the right wing takes over.


MATTHEWS:  OK.  Thank you. 


REICH:  Wait a minute, Chris.  Chris, one thing.  With reconciliation, the way George W. Bush got this tax extension, mostly for—this tax cut, mostly the wealthy, the way he did it, remember, was through reconciliation.  He said it was only going to be 10 years, and it was going to be a tax bill. 

Well, then another question arises.  Why didn‘t the Democrats try to do this under reconciliation and actually get what they wanted, instead of what the Republicans wanted? 


MATTHEWS:  I don‘t know how many reconciliations you can do a year. 

They already did one this year. 

Anyway, thank you.  It‘s a great question.  We will consult the Budget Reform Act. 

Terry McAuliffe and Robert Reich raises a fascinating question.

Up next:  The Republicans are set to take over the House Finance

Committee.  The guy who‘s going to do it says Washington regulators exist -

catch this—to serve the banks.  That‘s his job, help out the banks, help out Mr. Potter, who never gives a loan.  Is the fox guarding the henhouse?  Hey, elections have consequences.  The wrong guys win sometimes. 

You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Back to HARDBALL.  Now to the “Sideshow.” 

Note to Wall Street:  Spencer Bachus is at your service.  Here is what the incoming Republican chairman of the House Financial Services Committee just told his local Alabama newspaper—quote—“In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.”

Congressman Bachus later tried to clarify his comments, saying he simply meant that banks shouldn‘t be micromanaged.  Either way, is this the guy you want in charge of Wall Street, a lawmaker who thinks bankers are the ones who need protection? 

Next, where‘s school reformer—or D.C. school reformer Michelle Rhee when we need her?  U.S. Congressman Michele Bachmann says she‘s planning weekly civics classes for her fellow members of Congress. 


REP. MICHELE BACHMANN ®, MINNESOTA:  We‘re going to do what the NFL does and the baseball teams do.  We‘re going to practice every week, if you will, our craft, which is studying and learning the Declaration, the Constitution, the Bill of Rights. 


MATTHEWS:  Wow.  Well, here‘s a sampling of Bachmann‘s pearls of wisdom over the years.  She‘s called the democratically-elected Congress and White House a gangster government.  She‘s compared AmeriCorps to reeducation camp.  She‘s charged that the U.S. census could be a government conspiracy.

She‘s called for Republicans to slit their wrists and become blood brothers to defeat Obamacare.  And, of course, Bachmann here on this show called for members of the United States Congress to be investigated, to be probed by the media for—quote—“anti-American views.”

Well, this is an odd person to give a class in constitutional law. 

Anyway, now for tonight‘s “Big Number.”

Yesterday, would-be senator Joe Miller filed an election challenge with the Alaska Supreme Court, just three days after a lower court had ruled against him.  For all intents, that fight is long over now.  When did the Associated Press, by the way, declare the race for Senator Lisa Murkowski to have been won by her?  Twenty-seven days, they said it‘s over.  And he‘s still fighting it.

Alaska Tea Partier Joe Miller remains firmly in denial.  It‘s a long way for the River Nile.  Twenty-seven days and counting—tonight‘s “Big Number.”

Up next:  Michael Steele stunned Republicans last night when he announced, yes, he‘s running again for party chair across the country.  But after the record of success he‘s had—let‘s be honest, look at the numbers—why shouldn‘t he stay on the job? 

You‘re watching HARDBALL, only on MSNBC. 


HAMPTON PEARSON, CNBC CORRESPONDENT:  I‘m Hampton Pearson with your CNBC “Market Wrap.”

Stocks losing steam late in the session, but still finishing in the green.  The Dow climbing 48 points, the S&P up a point, the Nasdaq tacking on two points.  No surprises from the Fed‘s monthly meeting today.  It‘s leaving interest rates unchanged and standing by a $600 billion second round of support. 

Banks stocks were pulling the market lower late in the session, but AIG soared to the top of the S&P as underwriters started jockeying for the deal to repay its bailout funds. 

Meanwhile, General Electric finishing flat, after spiking this afternoon on next year‘s guidance.  The parent company of these networks is forecasting solid growth and better-than-expected revenue.  Best Buy shares plunging nearly 15 percent on dismal profits, declining market share, and a surprise drop in same-store sales.  But retailers were mostly higher on a report showing better-than-expected sales on higher-than-expected prices in November.

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



MICHAEL STEELE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE:  The work of that party that we began over a year-and-a-half ago, two years ago, needs to continue, as we set our sights to 2012 and what we hope will be the election of a Republican president in 2012. 


MATTHEWS:  Welcome back to HARDBALL.

That was Republican National Committee Chairman Michael Steele last night on FOX after a surprise announcement by him that he‘s going to run for another term as chairman.  Is this a good thing for the Republican Party? 

I have got two Republicans here.  The erstwhile Republican Pat Buchanan is an MSNBC political analyst.  And the real-life Republican strategist John Feehery is here supporting—well, are you one of the other people running against?  Who are you running?  Longtime strategist Maria Cino.  Why are you with Cino?  Did Cheney tell you to do this, Dick Cheney?  Are you working for Cheney? 


JOHN FEEHERY, REPUBLICAN STRATEGIST:  No.  I have known Maria before she was a Bush person.  She was actually...


MATTHEWS:  But did Cheney tell you to do this?

FEEHERY:  Cheney doesn‘t tell me to do anything. 

MATTHEWS:  I don‘t know.


MATTHEWS:  I think he‘s the enforcer.

Is she going to beat Michael Steele? 

FEEHERY:  I don‘t know.  It‘s an open race.  There‘s a lot of candidates.

MATTHEWS:  Here‘s what I don‘t understand.  The Republican Party keeps running Michael Steele for big jobs.  He was lieutenant governor of Maryland.  They put him up for the United States Senate from Maryland.  They make him party chairman.  And they keep dumping on him, but they gave him all these big jobs. 

Pat, why do they trust him with these positions again and again and again if they‘re not going to trust him? 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Well, he won as lieutenant governor.  And Maryland candidates, it‘s a very rough uphill battle.  And Maryland is probably one of the toughest states in the union.  People thought he ran a credible race.  He was in the race for the party chair, and so they gave it to him. 


MATTHEWS:  Why do they dump on him all the time? 

BUCHANAN:  Well, they didn‘t dump on him to begin with.  They dumped on him—dumping on him now because they believe he hasn‘t raised money.  He‘s made a lot of gaffes and blunders.  People aren‘t giving to the RNC.  He didn‘t do the job he should have.  He‘s brought on too many people who are cronies. 

But, listen, his problem is...

MATTHEWS:  But your track record of victory should be the ultimate output.  The input is money.  The output has been victory, victory, victory.

BUCHANAN:  But the question is, is he responsible for those victories, or did they win them in spite of him?  That‘s the problem are talking about.


Well, let‘s take a look at him last night on FOX talking about the midterm results.  There here he is assessing whether he gets couple, credit or not.  Let‘s listen to him, Michael Steele. 


STEELE:  If we had not won the seats we won, some 64 seats in the House, 21 state legislatures that flipped from Democrat to Republican, yes, then certainly, that would rest at my doorstep because we hadn‘t put the appropriate mechanisms in place to win or raised the money to win.

And we took advantage of opportunities to go out and raise the money and win the election so we have control of the House.  And I‘m looking forward to referring to Mr. Boehner as Speaker Boehner.


MATTHEWS:  Yes, John?

FEEHERY:  Well, I really like Michael Steele, but he has been a fairly mediocre chairman, from the standpoint of money, especially. 

The RGA and all these other outside groups really thrived because people just didn‘t want to give money to the RNC, because they didn‘t know what Michael Steele was going to do with the money. 

And it‘s—you can‘t have this in a presidential year. You need other have someone who could be an honest broker, who will be, as Pat says, gaffe-free, and who will actually be able to run an organized campaign to revitalize the Republican Party.  And that‘s not going to be Michael Steele.

BUCHANAN:  You need two things in a chairman, Chris.  There are two rules.  One is the spokesman role.  The other is the nuts and bolts role. 

The best man who ever ran that operation, Richard Nixon.  He put in Bob Dole, future majority leader and presidential candidate, and George H.W. Bush, future president.  They were the spokesmen.  And then you get guys under him who really work with the organization, raise the money, out there constantly doing it.

I think that combination is good.  The problem is, we don‘t have a president who can make that selection. 

MATTHEWS:  Well, here‘s Michael Steele last night on the phone, according to prepared remarks that were distributed after the call.

“Who you elect as our”—that‘s Republican—“next chairman will speak volumes about our willingness to truly be the party of Lincoln.”

Now, that reference to Lincoln was taken this morning on what—we get that little thing from Mike Allen every morning.  Here‘s what Mike Allen did report this morning on Politico—quote—“BlackBerry to playbook from one of the nation‘s best-wired Republicans, you see the ‘party of Lincoln‘ bit from his speech.  That we‘ll be judged whether we‘re the party of Lincoln by this election?  Race card, anyone?”

Buchanan,is he saying, if you dump me for a white guy, you‘re basically dumping a black guy for a white guy, the party of Lincoln shouldn‘t do that?  Is he playing the race card? 

BUCHANAN:  Lincoln didn‘t pick a black guy as chairman of the Republican Party in those years, Chris. 


MATTHEWS:  No, I don‘t think he was that forward-looking.

BUCHANAN:  Look, let me say this.

MATTHEWS:  But he did free a lot of people.

BUCHANAN:  Look, there‘s no question about it, that one of the attributes that Michael Steele got is that he was an outspoken Republican who ran a credible race and who they thought would represent the party well on television. 

That‘s one of the main reasons he was picked.  And, frankly, if he‘s taken out, people will say race is the—is the reason.  I don‘t believe for a second it would be. 

MATTHEWS: What about the gaffe thing?  I mean, Vice President Biden is a very smart guy, and he occasionally says things that people get a chuckle out of.  It doesn‘t seem to do any damage though.  The question is, does Michael Steele‘s gaffe do any damage?

JOHN FEEHERY, REPUBLICAN STRATEGIST:  They do some damage.  They sent him back.  They get the whole party off message.  But that‘s not the principal reason people are running against him.  It‘s really, in my view, all about the money.

MATTHEWS:  It‘s Dick Cheney, right?

FEEHERY:  It‘s all about the money and it‘s all about the organization.

MATTHEWS:  You‘re working for Dick Cheney.  You are working for Cheney, I can tell.

FEEHERY:  It‘s all about the money.  It‘s all about the organization.  It‘s all about trying to put us in the best position.

MATTHEWS:  Why would Vice President Cheney, who‘s out of politics all this year, come back from his retirement and declare he‘s for this woman, Cino?

FEEHERY:  Because I think that the vice president believes that organization and money are important elements of a successful—

MATTHEWS:  Why is he getting involved in it so much?


BUCHANAN:  He‘d like to have a new Republican administration that credits the Bush administration and that brings the Republicans back.  But I don‘t think that helps him being in there.  The ideal guy out there and he won‘t take it is Haley Barbour.


BUCHANAN:  He‘s a nuts and bolts guy.  And he‘s a spoken.  He‘s had. 

But if he doesn‘t run for president, that‘s who they ought to draft.

FEEHERY:  The fact of the matter is Haley Barbour ran the RGA just like the RNC, that tells you volumes about the decline and fall of the RNC.  If Michael Steele gets the RNC again, it‘s going to collapse.  The RGA and other organizations will thrive because—

BUCHANAN:  (INAUDIBLE).  That‘s right.  Haley runs a good show.

FEEHERY:  He does.

MATTHEWS:  I think the man behind the curtain is Dick Cheney.


MATTHEWS:  But I—I am always amazed.


MATTHEWS:  He comes on the show.  He called me three hours and said, put Feehery, he speaks for me.

So, good luck.  Dick Cheney does care about our country, but, boy, is he on the right.

Anyway, Pat Buchanan, another man on the right.  John Feehery, sort on the right.

And up next: the Senate pushing ahead on new START.  It‘s something I do care about.  And I think Cheney is for this, the president‘s arms treaty with Russia.

When we return, let‘s debate whether new START is good for this country.  This could be more important.  We‘re going to have former secretary of state, Lawrence Eagleburger on and former Pentagon official, Doug Feith, to this.  This is the hottest issue.  Are we going back to the Cold War?

This is HARDBALL, only on MSNBC.


MATTHEWS:  Well, we‘re getting some fascinating nuggets out of the new census data.  America‘s towns and neighbors have become more racially integrated than the past year than during any other time in our—at least a century.  The nugget shows segregation on blacks and whites fell in roughly three-quarters of the country‘s hundred largest metropolitan areas.

How about this?  Just three counties reported a median income of over $100,000.  All three are in—no surprise there—northern Virginia.

HARDBALL will be right back.



BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I am confident that we are going to be able to get the START treaty on the floor, debated and completed before we break for the holidays.


MATTHEWS:  Well, this is a very important issue.  It‘s about nuclear arms control and about possibly getting back into a big fight with the Russians.  I don‘t want to be there.  I grew up with that fight, hiding under my school desk.

Anyway, that was President Obama last week expressing confidence that he could push through this new START Treaty, it‘s called, in the lame duck Congress this fall.  And now, Senate Democrats believe they have the 67 votes needed to ratify the treaty.  That‘s what it takes, two-thirds of the Senate, to ratify a treaty.  They‘re pushing to begin debate on this agreement, this nuclear arms agreement with the Russians as early as tomorrow despite resistance from some Republicans.

Lawrence Eagleburger was, of course, one of the six former Republican secretaries of state who‘s urged the Senate to ratify and Doug Feith questions the new treaty.  He served as undersecretary of defense during the Bush administration.

Mr. Secretary, Mr. Eagleburger, I want you to tell us why is it important, urgent, on all accounts you can think of for this to be ratified this fall?

LAWRENCE EAGLEBURGER, FMR. U.S. SECRETARY OF STATE:  I think it‘s important that it be ratified this fall or early next year.  I‘m not one of those who feels it has to be done in this lame duck session.  I would prefer it to be done then.

But if you‘ll notice in that piece that all these secretaries of state, Republicans, once did here recently, we didn‘t argue about when it should be done.  We simply said it should be ratified.  I still believe that.  But I don‘t want to do it, if, in fact, what it‘s going—I don‘t want to do it now if, in fact, that‘s going to kill it.  If we can get it through?  Fine.  But otherwise, I want to wait until next year.

MATTHEWS:  Well, here‘s a list of prominent Republicans who voiced support for this START Treaty.  Here they are: former President George Herbert Walker Bush, Henry Kissinger, George Shultz, James Baker, yourself, Lawrence Eagleburger, Brent Scowcroft, Colin Powell, Condoleezza Rice, and former Secretary of Defense William Cohen.  I think Jim Baker‘s on the list somewhere there.

Doug, Mr. Secretary

EAGLEBURGER:  Yes, he is.

MATTHEWS:  Let me go to Doug.  Let me go to Doug on this question.

What‘s the problem with this?  Why are you questioning it?

DOUGLAS FEITH, HUDSON INSTITUTE:  Well, I think a number of those Republican officials that you mentioned also raise questions about the treaty.  The treaty establishes a link, what they call an interrelationship between offensive force reductions and missile defense.  This is something the Russians have been asking for for years.  They tried it when I helped negotiate the predecessor treaty, the Bush administration said, no, that‘s harmful to the United States.  But the Obama administration said yes.

The other thing is that the treaty has counting rules, these very complex counting rules that have the effect of imposing penalties on the United States if we want to convert long range nuclear systems into long range conventional systems.

MATTHEWS:  But the Pentagon says it‘s better to just create new rockets.  So, new ICBM for conventional purposes.

Mr. Eagleburger, isn‘t that the case?  That this isn‘t a problem because the Pentagon preferred just to create new weapons?

EAGLEBURGER:  I don‘t think there‘s a problem of either of those two points.  Number one, that you‘re correct.  The Pentagon says it would prefer to do new ones anyway.  So, that‘s not the issue.  On the other hand, this so-called linkage is just not there and we have said it‘s not there, and that we don‘t accept the Russian argument that is there.

So, we—as far as we‘re concerned, it‘s not there and it‘s going to stay not there.


MATTHEWS:  Let‘s go back to more fundamental question.

FEITH:  A key factual point here.  If you look at article five, section three of the treaty, there are limited—there‘s a limit on missile defense and then there‘s also the preambular language.  I mean, it‘s just—it‘s just not accurate to say it‘s not there.

MATTHEWS:  I know for years the Soviets always wanted to avoid missile defense because they thought we had the electronics, the ability to actually create such a system and they knew they didn‘t.  I think that‘s probably why we had the Cold War, right?

We basically bluffed them or convinced them, Reagan did, that we could possibly put up a shield against their ammo and they said, whoa, we better call it quits, right?

FEITH:  There‘s no question that our technology is a lot better than theirs.

EAGLEBURGER:  I think that‘s right.

FEITH:  And we have technology that‘s worked very impressively in the missile defense area.

MATTHEWS:  OK.  Let me ask you about the basic gut feeling about—

Mr. Eagleburger, do you think we face a political—geopolitical threat from Russia today?  Are they our enemy or even potential enemy in the world?

EABLEBURGER:  Oh, I suppose they‘re a potential enemy.  They are not now an enemy.  And I think that where they pose a problem is that things like maybe some handing over some nuclear secrets to Syria or something like that.  In that regard, yes, they are a problem.  And in terms of the way they used to be that the two superpowers facing each other—no, that‘s no longer the case.


FEITH:  I agree with Secretary Eagleburger on that.

MATTHEWS:  Well, let me ask you positively then.  Don‘t we need the Russian alliance on issues like Afghanistan, issues like Iran, the sanctions, toughening the sanctions, helping us do the battle we have to fight in Afghanistan as long as we‘re there?

FEITH:  Well, you say don‘t we need them—we don‘t have them on a lot of those things.

MATTHEWS:  We don‘t?

FEITH:  It would be desirable to have Russian cooperation.  And I‘m all in favor of trying to improve cooperation with Russia.  But the Russians have been very unhelpful on Iran, with the exception of one cancelation of an arms sale to them, which was good.  But in general, they‘ve been unhelpful and they‘re unhelpful on a number of other areas.

I‘m all in favor of trying to cultivate better relations.  But this particular treaty has some serious problems.  My view is the problems about this treaty should be looked at seriously—part of the answers to them may come if the administration releases the record which it‘s refused to do.  I don‘t think it makes any sense to try to push it through the lame duck session.

MATTHEWS:  Well, the concern that the Democrats I hear from, like I believe the vice president and others, is—Mr. Eagleburger, the concern they have about us going over into next year when you have a much more Republican Senate, still a majority of Democratic Senate nominally, but certainly much more conservative, it‘s going to be harder to get the 67, 2/3 vote next than now.  That‘s why they fear not getting it done in the lame duck.

You‘re reaction to that?

EAGLEBURGER:  Well, my reaction to that is—that in other words, see, this is why I‘m now put in the position of being more liberal than my friend on the other side there.  And I‘m not liberal on this at all, except in this particular case, I think it is a treaty worth doing.  However, I don‘t mind if it waits until next year.

The fact of the matter is that Democratic argument if you just used is simply saying because we lost some Senate seats and therefore whatever it is it will be tougher for us to get because Republicans are now in those positions is simply saying that they want to do this now that they lost their seats in the Senate.


EAGLEBURGER:  They want to do it before these lame duckers are out there.  That‘s not the way to move on this issue.

MATTHEWS:  Well, I think they‘re concerned.  I‘ll express their concern since I share it, which is they‘re afraid that these people come in from the outside.  They come in with a very anti-establishment point of view to start with and their view will probably be—

EAGLEBURGER:  We don‘t know that.  We don‘t know that.  We don‘t know it on START at least.  And the fact of the matter is, this is the thing I think is so important where Mr. Feith and I probably disagree.  And that is—to me, the looming, worst issue we face for not just tomorrow but decades to come is this issue of nuclear weapons.  And anything we can do to begin to shave off a little here, a little there, needs to be done.  And I think it‘s a terribly, terribly—

FEITH:  Well, I do—I do agree—

EAGLEBURGER:  -- dangerous issue and we ought to go ahead with it.

FEITH:  I do agree that we have to do everything we can.  The thing that concerns me is some of the mistakes that were made in the negotiating of this treaty may actually make the proliferation problem harder rather than easier.

On your point, I think that there are Republicans who have serious questions about the treaty who I think, if forced to vote before those questions are answered, in a lame duck session will vote no; whereas they might be satisfied if it comes up later.

MATTHEWS:  OK.  I think it‘s fair to say we won‘t prejudge them.

Thank you.  I know the arguments, though.  Thank you, Former Secretary of State Lawrence Eagleburger.  Thank you, Former Undersecretary of State Doug Feith.  Thanks for giving us this argument tonight.

When we return, “Let Me Finish” with why I think our relationship with Russia is critical right now.

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  “Let Me Finish” tonight with this nuclear treaty with Russia.  I have a simple view of this thing, is that we keep the strongest possible relations between our two countries.

Any student of history knows this bond between the United States and Russia is crucial to the world‘s current strife, which is now between the zealots who used terror against the United States and those other countries that have armies.  The war between big power armies is behind us now.  The war between states with armies like us and Russia, and those who use terror stretches before us.

I want peace between the big power countries with armies so that we can do a better job of defending ourselves against the terrorists.  This is the heart of it.  I make the basic assumption that Henry Kissinger, George Shultz, James Baker, Condoleezza Rice, Brent Scowcroft and Lawrence Eagleburger, hard-nosed people all, would have spotted a real flaw in this nuclear arms treaty if one exists.  I assume that questions about the treaty on matters of verification, missile defense and modernization have been answered satisfactory.

But I take as a larger argument—we need, above all, not to fall back into the hostility between Moscow and our country that prevailed from 1947 through 1991.  We do not need a second Cold War on top of the threat we face now from terrorists.  We need the strongest possible alliance between America and Russia to keep existing nuclear weapons from enemy hands.  We need Russia to build an even tougher pressure on Tehran to prevent Iran‘s development of a nuclear weapon.  And the stronger the Washington/Moscow alliance, the firmer the sanctions are going to be against Iran.

The treaty requires 67 votes in the U.S. Senate for approval.  I expect if it comes to a vote and meets this threshold, especially given the testiness of today‘s politics, that‘s a good sign of its importance and its benefit.  The danger has been some other issue will bog down the Senate and prevent action on a matter that is really to important to botch.

The galloping horse of history is about to pass us.  Let‘s not miss our chance.

That‘s HARDBALL for now.  Thanks for being with us.

Right now, it‘s time for “THE ED SHOW” with Ed Schultz.



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