updated 12/20/2010 12:12:49 PM ET 2010-12-20T17:12:49

Guests: Howard Fineman, Eugene Robinson, Hampton Pearson, Kirsten Gillibrand, Jared Polis, Ron Reagan, Willie Brown, Judson Phillips, John Feehery

CHRIS MATTHEWS, HOST:  Just in time for Christmas.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews in Washington, D.C. 

Leading off tonight: The Democrats.  For two weeks, President Obama was taking heat from the Democratic left over the tax bill.  Now that it‘s law today, the president sits atop the middle ground.  Can this give him an advantage as he begins his third year in the presidency?  Charles Krauthammer, a man of the right, says it can and it does.

Also, the president may be about to chalk up another win that will convince some of those on the left.  There is now a very real chance that “Don‘t ask, don‘t tell” will be repealed this year.  The Senate may now have the votes to join the House and toss out the law this weekend.  Was it Obama‘s call on taxes that gave us this chance to end this law?

And every year contains a few political whoppers.  This year was no different.  We‘ve got the five biggest, according to a readers‘ poll conducted by the fact checkers at PolitiFact.

Plus, why would a strip club owner give Newt Gingrich a VIP membership to her club?  Well, it‘s a weird case of mistaken identity—twice.  Check out the “Sideshow.”

And “Let Me Finish” tonight with how the critics may have gotten it wrong about the president.

Let‘s begin with President Obama‘s big comeback.  Eugene Robinson is a columnist with “The Washington Post.”  Howard Fineman is with the Huffington Post.  Both are MSNBC political analysts.

Gentlemen, before we proceed, I just got one of those flash news flashes that I have to report immediately upon getting it.  Congresswoman Michele Bachmann of Minnesota has been named to the Intelligence Committee!


MATTHEWS:  What—what genius, Howard, thought this was the perfect match?

HOWARD FINEMAN, HUFFINGTONPOST.COM, MSNBC POLITICAL ANALYST:  I have no comeback.  I just think that speaks for itself.


MATTHEWS:  OK, let‘s go to the higher ground.  Let‘s go to the president today in that signing ceremony.  I thought it was interesting that Speaker Pelosi was absent.

ROBINSON:  Well, kind of interesting.

MATTHEWS:  What does that tell you, it‘s low profile on purpose?  What would you call it?

ROBINSON:  Maybe low profile on purpose.  I mean, she did, after all, in the end, facilitate the passage of the compromise.

MATTHEWS:  She sets the schedule.

ROBINSON:  I mean, she—right.  Exactly.  She sets the schedule, and if she—

MATTHEWS:  But didn‘t want her fingerprints on it.

ROBINSON:  -- had gone pedal to metal against it—

MATTHEWS:  Yes, I thought it was very interesting.

ROBINSON:  -- really, it would have been—

MATTHEWS:  I thought it was very—you know—

ROBINSON:  -- much more problematic.

MATTHEWS:  -- in 1984, when the Democrats got wiped out, 49 states, remember Mondale?  Speaker O‘Neill took a sort of a back seat for a couple months there.  It may be—even though it wasn‘t his fault.  Sometimes it‘s smart for leaders, after a bad whuppin‘, to sort of step down from the profile role a bit for a while—


MATTHEWS:  -- smart politics.

FINEMAN:  Well, Nancy Pelosi actually was pretty invisible over the last couple of weeks.


FINEMAN:  I mean, it‘s kind of paradoxical.

MATTHEWS:  I think so.

FINEMAN:  She insisted on keeping the role of Democratic leader, and nobody challenged her in the end.  But as soon as—


FINEMAN:  -- as soon as she wanted, she disappeared.

MATTHEWS:  You know, it‘s very smart politically.  Whatever her role has been ideologically, you might question, perhaps, in forcing a lot of those people in tough seats to vote for legislation which basically croaked them.

FINEMAN:  I agree.  But more important than what it means about her is what it means about Obama.  The fact that she wasn‘t there, the symbolism of it today, means that going forward the next couple of years, all the action, if there‘s going to be any, is going be between this sort of freelancing president now, who‘s off on his own—

MATTHEWS:  Transactional president.

FINEMAN:  -- transactional president off from his base, trying to deal with the Republicans.

MATTHEWS:  Well, here he is.  We‘re going to look at—here‘s President Obama just this afternoon at that bill signing.  Let‘s watch a bit of it.  Let‘s listen.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Now, candidly speaking, there are some elements of this legislation that I don‘t like.  There‘s some elements that members of my party don‘t like.  There are some elements that Republicans here today don‘t like.  That‘s the nature of compromise, yielding on something each of us cares about to move forward on what all of us care about.


MATTHEWS:  Well, what‘s the Fred Rogers deal about here?  Why is he explaining such a thing as a compromise?  It‘s—it‘s like somebody in a modern school now.  You get to use the toys for 10 minutes, and then Junior, he gets to use it for 10 minutes.  It‘s this sort of—


MATTHEWS:  -- basic training in compromise.

ROBINSON:  In his neighborhood, it was not a bad day.  Look, the key phrase there in that whole thing was “Republicans here today.”  Here they are, you know, the old saying, keep your friends close and your enemies closer.  I mean, they‘re—they‘re now complicit in—

MATTHEWS:  Therefore?

ROBINSON:  Well, therefore, it‘s harder for them to whale on him—


ROBINSON:  -- certainly about tax—

MATTHEWS:  Do you like the way they—he sort of—


MATTHEWS:  -- mobbed them in there by saying, Now that you‘re my partners in this, we‘re going to have some unpleasant things to do next year.  Cutting taxes, that‘s easy.  Reagan used to do that.  That makes you popular.  That puts you up on Mt. Rushmore.  But next year, we‘re going to have to do things like deal with long-term spending problems.  And you‘re going to be my partners then, aren‘t you?

FINEMAN:  I think that‘s his goal here.  That‘s his goal.  Now, I think he‘s understating the extent of Democratic opposition to this and overstating, to some extent, Republican opposition to this tax bill because it was essentially a Republican bill.  It was a tax cut bill.

MATTHEWS:  You know how you could tell that?


MATTHEWS:  By the vote last night.


ROBINSON:  Yes.  Right.


FINEMAN:  It‘s a Republican bill.


FINEMAN:  So it‘s not quite down the middle.  But yes, it‘s transactional, as you were saying, because the next year‘s action is going to all be about spending cuts.  That‘s got to be jointly done.  And he‘s going to try to trap the Republicans into honoring their own rhetoric on this.

MATTHEWS:  Well, here he is—to make the point.  I tried to make it a moment ago.  I think I made—here‘s the president talking about down the road ahead, how the bill signing this afternoon may affect future developments.  Let‘s listen.


OBAMA:  There will be moments, I am certain, over the next couple of years in which the holiday spirit won‘t be as abundant as it is today.


OBAMA:  Moreover, we‘ve got make some difficult choices ahead when it comes to tackling the deficit.  In some ways, this was easier than some of the tougher choices we‘re going to have to make next year.


MATTHEWS:  You know, whenever you say—I want to talk about the subjective present, Gene, your reaction to this.  Subjectively, it is hard.  He‘s a happy man this weekend.  That smile, that cute smile we all love in that guy, that wonderful, boyish smile of his, he just gave us after made his little crack about the holiday spirit—I haven‘t seen that in months.

ROBINSON:  Yes.  No.  He seemed like a happy guy there.  And I think -

look, he—you know, he endorsed this compromise, negotiated it and endorsed it, got it through.


ROBINSON:  He‘s a happy guy, and he believes—the White House certainly believes that of all the potential outcomes, this tends to—this is best for the economy of anything that was doable.  It‘s more likely to set him up well for 2012.  And you know, that distance that he‘s established with the left—

MATTHEWS:  Did you see Allison Schwartz (ph) is there from the Philadelphia suburbs—


MATTHEWS:  What an interesting group of—that‘s the first time she‘s stood next to McConnell in any kind of happy occasion!

Here‘s Charles Krauthammer, by the man (SIC), a man of the right saying nice things about President Obama having pulled off this compromise.  “If Barack Obama wins reelection in 2012, as is now more likely than not,” the Krauthammer column reads, “historians will mark his comeback as beginning on December 6th, the day of the big tax cut deal of 2010 and his stunning tax deal itself.  Obama is back.  Holding no high cards, he nonetheless managed to resurface suddenly not just as a player but as orchestrator, deal-maker and central actor in a high $1 trillion drama.”

Now, Charles Krauthammer, unlike most columnists, takes two days to write a column, Mr. Pulitzer Prize winner.  He may lack your gift.  One day to write the column, two days—the second day to get it from 1,500 words down to 750.


MATTHEWS:  That‘s how good a writer he is.  So those words were carefully chosen by Charles Krauthammer.  He is anointing a man of the center left, and he‘s a man of the right.

FINEMAN:  Well, yes.  I‘m not sure that that‘s something the White House ultimately wants to take comfort from.

MATTHEWS:  It‘s an imprimatur of Charles Krauthammer?

FINEMAN:  Yes.  I—it‘s an odd moment where you have two times in a row that Charles Krauthammer—


FINEMAN:  -- who‘s a very smart guy—first—first he—

MATTHEWS:  Honest guy, too.

FINEMAN:  An honest guy.  First, he blessed the tax deal last week, then he anoints Obama as the man to be reelected.  I think it‘s fascinating that that got so much attention and that the White House was even in the position of taking note of that guy—

MATTHEWS:  You notice the president‘s left-handed?


MATTHEWS:  Bill Clinton was left-handed.  What‘s it tell you?

FINEMAN:  They‘re creative.

MATTHEWS:  It tells me absolutely nothing.  What does it tell you?


ROBINSON:  That you want to be—

FINEMAN:  That was a trick question?

ROBINSON:  -- on the other side of him at lunch, so you don‘t—

MATTHEWS:  Now, here—look at that smile.  There‘s that happy smile.  Look at that, Joe Biden there, Max Baucus, the Finance Committee chairman about—still chairman.  Interesting (INAUDIBLE) -- there‘s Jack Lew behind him there, the budget director, an old pal of mine, current pal, as well.  Interesting.

FINEMAN:  You want to be—if you‘re president, you want to sign something.  You want to sign something.  You want to have bipartisan support.  And if you‘re forced into it, especially, and you can tell your left wing that you were forced into it, you love to give the country $850 billion worth of tax cuts.

ROBINSON:  Exactly.

FINEMAN:  You‘re worried about—


FINEMAN:  You‘re worried about the spending cuts after Christmas—



FINEMAN:  -- and after New Year‘s.

ROBINSON:  And if this weekend, you get “Don‘t ask, don‘t tell”—


ROBINSON:  -- then you‘re—you know—

MATTHEWS:  Which you wouldn‘t have got, probably—

ROBINSON:  Probably.

MATTHEWS:  -- if they had putzed around about this until Christmas.

FINEMAN:  Not only that—


MATTHEWS:  Right?  Is that fair?

ROBINSON:  Not only that, Organizing for America, which is the president‘s off the—off the limit—off the White House organizing group, has been working the “Don‘t ask, don‘t tell” issue very, very hard the last 48 hours.

MATTHEWS:  What‘s that group called?

FINEMAN:  Organizing for America.


MATTHEWS:  But that guy wrote that column this morning in “The Washington Post” said the president‘s not using that group enough.

FINEMAN:  OK, but it‘s—it‘s the successor to his campaign—

MATTHEWS:  I know.

FINEMAN:  My point is, he disappointed the left wing of his own party on taxes here, OK?


FINEMAN:  They didn‘t want this tax bill.  But he‘s going to give them something on the cultural front, if he can, which is the repeal of “Don‘t ask, don‘t tell.”  My point is that the president‘s own political organization is working on this very hard.  They were silent on the tax bill.

MATTHEWS:  Suppose—

FINEMAN:  But they‘re working very hard on this.


MATTHEWS:  -- Superman movies where they roll back history and time for, like, 24 hours and stop—and stop the—


MATTHEWS:  Exactly the point.  If the—would the left, the progressive left—would they—had he said, I‘m with you guys, had he gone right to the mat with them right through Christmas and New Year‘s, no tax cut, the taxes going up next January, no DADT, no new START, no Dream Act, would they have said hurray, or would they have blamed him for that?  That‘s my question about critics per se.  Are they always critical?

FINEMAN:  A lot of them.  Yes, a lot of them.

MATTHEWS:  No matter what you do.

ROBINSON:  Some of them would have—would have—would have—

MATTHEWS:  Said that was good.

ROBINSON:  -- applauded what I think would have been a Pyrrhic victory, but—

MATTHEWS:  They would have liked it, though.

ROBINSON:  But you know, the time to go to the mat was before the election, frankly.


FINEMAN:  He didn‘t do it many months ago.  The one other thing, Chris, is this.  There are lots of signs that the economy is, in fact, improving now.  That‘s a good—


FINEMAN:  On a top level, not for the unemployed at this point.  And the fact that—

MATTHEWS:  When are the $2 trillion going to get spent by corporate American they‘re sitting on right now?

FINEMAN:  Well, that‘s what the president was taking to the CEOs at the Blair House about the other day.  But they needed this.  The White House wanted and needed this bill—


FINEMAN:  -- so as not to get in the way of whatever movement that is that‘s going on—


MATTHEWS:  Erin Burnett the other morning on “Morning Joe” said it was the best meeting with business people that there‘s been in two years now.  It‘s the second honeymoon—

FINEMAN:  Well, it‘s a pretty low bar because there weren‘t any good ones until now.

MATTHEWS:  OK, Grinch.


MATTHEWS:  OK, thank you.  Erin Burnett says it was a good meeting, and you say it was a good meeting.

FINEMAN:  I‘m sure it was.  No, I agree.  I agree.

MATTHEWS:  Anyway, thank you, Howard Fineman.  Trying to put the fine point on there.  Eugene Robinson.  Gentlemen, have a nice holiday.

Coming up: Turns out the repeal of “Don‘t ask, don‘t tell” could become reality after all.  Who would have believed this one was going to get happened (ph)?  All those three new Republican senators have seen the light.  Sometimes debate matters.  Sometimes you have relatives, friends turn out to be gay.  You‘re looking out for people you never thought you‘d look out for.  I think human development‘s going on here on this issue of DADT.  The one thing in my life I‘ve seen people change their minds on, for open service.  People are changing their minds.  Anyway, that gives the Democrats the 60 votes they need.  It‘s another big victory for the president, if it happens, and it looks like it will.

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Well, here‘s one more nail in the coffin for that idea out there sometimes that President Obama will face a primary challenge come 2012.  A new Magellan poll from “The New Hampshire Journal” finds the president trouncing three hypothetical challengers in the New Hampshire primary.  The president would beat former Vermont governor Howard Dean 78 to 10.  He‘d beat Vermont senator Bernie Sanders 79 to 8.  And against a more formidable opponent, Hillary Clinton, President Obama would still win easily, 59-28.  Well, that was more—that‘s obviously closer.

We‘ll be right back.


MATTHEWS:  Welcome back to HARDBALL.  After 15 Republicans helped House Democrats pass the repeal of “Don‘t ask, don‘t tell” this week, the Senate appears to have the 60 votes now necessary to end that 17-year-old ban on open service by gays in the U.S. military.  A Senate vote is expected this Saturday.  That‘s tomorrow.  Is this finally going to get done?

With us now, Democratic senator Kirsten Gillibrand.  We are so lucky to have one of the real stars of the United States Senate, from the Empire state, herself.  Senator Gillibrand, it‘s so great to have you on, on an issue which I thinks‘ going to make you happy.  Is this going to be history you‘re going to be part of this weekend?

SEN. KIRSTEN GILLIBRAND (D), NEW YORK:  Definitely.  I am so excited about this vote because, fundamentally, Chris, this is one of the most corrosive policies we could have as a government.  It fundamentally undermines our integrity in armed services and as a nation.  And it really goes to the heart of who we are because in this policy, we‘ve lost 13,000 personnel.  We‘ve lost more than 10 percent of our foreign language speakers.  And we‘ve lost more than 800 in mission-critical areas that we cannot easily replace.

So these are the men and women we need.  And you know, we need all our best and brightest fighting when we have two wars and we have terrorism, you know, all around.  And this is something we really need to repeal.

MATTHEWS:  Well, speaking of best and brightest, you have about four Republicans joining you in this now at the last minute, the two senators from Maine—I know you know these people up there on the Hill—Susan Collins, Olympia Snowe, Scott Brown, and Lisa Murkowski, who just won that write-in race.

What do you think turned this into something of a bipartisan push?  And I‘m also hearing this rumor—I‘d love it if you could tell me it‘s true.  The word‘s out that once this comes to a vote and you pass the 60 mark for getting it to a vote—you know, big (ph) getting closer- that you‘re going to have a lot of Republicans jump on the bandwagon at the last.

GILLIBRAND:  That would be fantastic.  I would be delighted to welcome all of those Republicans to be among those to believe this is a corrosive policy that has to be repealed.  I think it‘s just a generational issue, Chris.  I think over time, people‘s views have changed.  And people realize now that this is also about military readiness, that fundamentally, we need all of these men and women serving because we‘ve lost so many.  And think of the countless number of people who haven‘t joined the services because of this policy.

So I think there‘s a lot of issues at play here.  And for my part, I also think it‘s the Civil Rights march of our generation.  This is truly about equality.  It‘s about equal rights.  It‘s about civil rights.  And these men and women, they want nothing but to serve this country and are literally being told that they can‘t based on who they love.  And that is not who we are as Americans.

MATTHEWS:  Let‘s take a look at what Senator John McCain said back in 2006 on the HARDBALL “College Tour,” a golden oldie, speaking of age differences.  Let‘s listen.


SEN. JOHN MCCAIN ®, ARIZONA:  The day that the leadership of the military comes to me and says, Senator, we ought to change the policy, then I think we ought to consider seriously changing it because those leaders in the military are the ones we give the responsibility to.


MATTHEWS:  Well, that may not sound familiar, but he actually did say that, Senator.  He said if the military high brass thought it ought to be changed, he‘d be with them.  He‘s since demurred on that.  We‘ll see how he ends up on the vote.

Let me ask you about something I know you‘ve been involved with very much with Senator Schumer, as the two senators from New York, the first responders‘ health issue.  What is the health crisis facing people who were involved in dealing with the initial horror of 9/11?

GILLIBRAND:  Well, as you remember, Chris, these are our first responders.  These are the ones who were running up the towers when everything was coming down.  They‘re the ones who went to the pile day in, day out, first looking for survivors, then remains, then doing the clean-up.  And what happened is the toxins that were released from these towers were so awful and so horrific, they are now dying of cancer and other terrible diseases because of the health effects of these toxins.

And also, you have to remember, the families that lived at Ground Zero, a lot of the children, who are most vulnerable, they‘re experiencing asthma and other lung ailments.  And so we really need to make sure they have the health care that they need.

MATTHEWS:  Well, what‘s going to happen?  You have got about a few days left in this session.  Is it going to get done? 

GILLIBRAND:  Well, we are—it is going to get done. 

We‘re going to have a vote.  It will be an up-or-down vote just on the 9/11 health bill.  And I think we will have the Republican support that we need now to pass that bill. 

What I‘m looking for, Chris, is a Christmas miracle, and I really believe that people of goodwill can come together and really stand behind these first-responders. 

MATTHEWS:  Senator Gillibrand, please come back to HARDBALL often. 

Thanks for coming on.

GILLIBRAND:  Thank you, Chris. 

MATTHEWS:  Merry Christmas to you—

GILLIBRAND:  Merry Christmas to you.

MATTHEWS:  -- and to everybody in the Empire State. 

Let‘s turn now to U.S. Congressman Jared Polis.  He‘s a Democrat from Colorado. 

Congressman, thank you very much for joining us. 

And people tell me that you‘re the first openly gay person who‘s actually been elected as such.  You didn‘t come out afterwards.  Let me ask you about this—this whole question of dealing with this issue of open service.  Are we going to get there? 

REP. JARED POLIS (D), COLORADO:  You know, we—absolutely.  We should have gotten there 20 years ago. 

This issue is going to meet with a collective sigh when it‘s done.  The public, the military, they have so moved past this.  We‘re fighting the battles of 20 years ago here.  It‘s time to pass this and move on. 

MATTHEWS:  What do you thinks‘ going to be implementation?  Look, I want this to happen.  I have said—I‘m allowed to have an opinion on this program, and I‘m for it. 

I do—I am concerned about the differences it‘s going to create.  I mean, you don‘t have to get weird about it, but asking how you‘re going to deal with sexual attraction in the military when you have men in close quarters, women in close quarters.  They used to separate by gender in barracks and all that stuff. 

How do you deal—is there any need for any further rules, or is it just going to be common sense or what? 

POLIS:  Nonissue.  I mean, look, we have gays and lesbians living in college dormitories today.  Oh, gosh, oh, my, what are they going to do? 

MATTHEWS:  Yes.  Yes. 

POLIS:  And firefighters, police forces. 


POLIS:  Look, we have strict rules of behavior that members of the military undertake, whether it‘s same sex, opposite sex, around harassment, around fraternization.  Those rules all hold. 

They‘re all important rules to have about what people do and what their conduct is.  But it‘s just simply a nonissue for this generation. 


POLIS:  -- big collective sigh.

MATTHEWS:  I agree with you.  And you‘re a young guy, but isn‘t a nonissue for—we look at these polls.  We study them intently here.

And, generally, 70 percent of the serving military want this change.  They‘re all for it.  They don‘t see a problem in it.  But then you see those guys in the fighting—and women—in the fighting units of the Marines and the fighting units of the Army.  That‘s where you get that pushback.  What do you make of that?  It‘s about 50/50.

POLIS:  Yes.  Part of the reason that poll was done so well by the military, this research project, is not only did they ask, what do you think, would you be worried about serving with someone who was gay?  But then they said, are you serving with somebody who is gay?  And many of them thought that they were, and they didn‘t have a problem with it.

So, the problems are hypothetical.  They‘re not real. 

MATTHEWS:  Well, were you surprised by this?  As a gay person, were you surprised by this statement in the polling?  I found it wonderful in a way because it showed it‘s not the caricature people, older-generation people have. 

Five out of six gay people serving in the military said that even if they were allowed to come out, if you will, to use the common term, even if they were allowed to serve openly as gay people, they wouldn‘t make any statement to that effect.  They would go along in effect with the way it is now, but voluntarily.  They wouldn‘t make an issue or a statement about their identity. 

POLIS:  I mean, who goes around making a statement?  You don‘t wear a sign that says you‘re gay or you‘re straight everywhere.


POLIS:  But if it comes up with your friends, your partner happens to be the same sex or the opposite sex, they kind of figure out whether you‘re gay or not.

MATTHEWS:  I got you.

POLIS:  But it‘s not something that you go around declaring.  That is just a really strange way of looking at it.  I certainly don‘t. 

MATTHEWS:  You‘re so cool. 


MATTHEWS:  Anyway, thank you, Jared Polis.  Thanks for joining us. 


MATTHEWS:  You‘re so casual about these—thank you very much.  You are the new generation.

POLIS:  Thanks, Chris. 

MATTHEWS:  Sir, I salute you.  Thank you very much for your service.

Up next:  What did Newt Gingrich do to win himself a lifetime membership at a Dallas strip club?  OK, I will admit right up front it was a mistake, although he deserves credit for this mistake.  Check out the “Sideshow” next.

You‘re watching HARDBALL, only on MSNBC.  


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

First, what‘s the Zipper Club?  Well, here‘s a hint.  Bill Clinton and Larry King are both members, but don‘t get the idea—or the wrong idea.  Listen to this unscripted exchange from last night‘s finale edition of “Larry King Live.” 


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES:  And I‘m really glad to see you here and still up and going.

LARRY KING, HOST, “LARRY KING LIVE”:  We‘re both in the zipper club. 

By the way, you looked very good last week in the Briefing Room at the White House.

By the way, the suits want me to remind you what the zipper club is.  It‘s if you‘ve had open-heart surgery.  They have to zipper it up.  So, I thought everyone in the world knew it, but apparently—

RYAN SEACREST, HOST, “AMERICAN IDOL”:  Bill and I looked confused. 


KING:  I‘m sure you did. 

Ryan, do you have any question for the president? 

CLINTON:  I‘m glad you clarified that. 


KING:  I see what you mean.  Oh!  Oh, oh. 


MATTHEWS:  Well, folks, this proves that “Larry King Live” really was live. 

Next:  Reality bites.

Last night, Bill O‘Reilly needled Sarah Palin on her reality show appearance with TLC, tabloid regular Kate Gosselin.  Watch the mama grizzly hit back at Bill. 


BILL O‘REILLY, HOST, “THE O‘REILLY FACTOR”:  Is that presidential, you and Kate Gosselin in a forest?  People would say, you know, look, it doesn‘t elevate the governor, the former governor of Alaska.  And you would say?

SARAH PALIN ®, FORMER ALASKA GOVERNOR:  Oh, I‘m sorry that I‘m not so hoity-toity. 


PALIN:  And, you know, I don‘t do this before I make a statement or endorse a person or portray reality.

O‘REILLY:  You would not appoint her, Gosselin, to a Cabinet position if you were in Washington or anything?  She wouldn‘t—wouldn‘t—


PALIN:  What do you think? 

O‘REILLY:  I‘m just giving you a little jazz, Governor.  You know how I am. 


MATTHEWS:  What do I think?  I think Bill O‘Reilly doesn‘t think Palin has what it takes to run the most powerful country in the world.  And he shows it.

Finally:  Oops, did it again.  Last year, Newt Gingrich gave his entrepreneur of the year award, which is really offered to contributors to his PAC, to Dallas area‘s Dawn Rizos.  Dawn Rizos is indeed a businesswoman, but also the owner of the Lodge, a topless strip club. 

Gingrich‘s team said they didn‘t realize the nature of her business, so they rescinded the award, returned Rizos‘ contribution, and disinvited her from the awards dinner. 

But catch this.  One year later, Gingrich‘s PAC sent Rizos a membership card and once again asked for a political donation.  In a show of goodwill, Rizos responded by sending Newt a VIP membership in her strip club.


MATTHEWS:  Now for tonight‘s “Big Number.”

Congressman Patrick Kennedy‘s retirement as congressman from Rhode Island next month will be the end of the huge era in American politics.  How long has a member of the Kennedy family been in federal office?  Sixty-three years, as long as I can remember -- 63 years of history leave Washington with Patrick Kennedy—tonight—tonight‘s incredible “Big Number.” 

Up next: the five biggest political whoppers of 2010.  This is going to be great fun, I think, except for those who committed them, as we count down the biggest ones of the year. 

You‘re watching HARDBALL, only on MSNBC.  


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

Stocks ending narrowly mixed, the Dow Jones industrials slipping seven points, the S&P 500 clinging to a two-year high with a one-point gain, and the Nasdaq the strongest of the three today with a 5.5 increase. 

A relatively quiet day on Wall Street, despite being the quarterly quadruple witching, when four different type of stock options and futures expire.  The euro moved lower as Moody‘s downgraded Ireland‘s debt rating by five notches and the E.U. agreed to create a permanent financial safety net starting in 2013. 

Pharmaceutical stocks were the biggest drag today, led by AstraZeneca.  The drug company was hurt by a ratings downgrade and news that approval of its new blood-thinning drug was delayed.  But GM shares bouncing back with solid late-day gains, despite an SUV recall, after naming marketing guru Joel Ewanick to head of worldwide promotions. 

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


MATTHEWS:  Welcome back to HARDBALL.

Election years always guarantee a good dose of political fudging—

I‘m using a nice word here—and 2010 was no exception.  PolitiFact conducted a readers poll of the top examples of the year.

And, tonight, we bring you the biggest whoppers in the world of politics in 2010.  It ain‘t going to be pretty.

Joining me in this fun exercise for some, like us, is former San Francisco Mayor Willie Brown and political analyst Ron Reagan. 

Ron, you‘re smiling.  I‘m reading your book.  All I can say is, wow. 


MATTHEWS:  Wow.  When that book comes out, wow.  It‘s finally written. 

It‘s going to stagger people. 

Anyway, let‘s go.  The fifth biggest whopper of the year, Charlie Rangel‘s claim that the House Ethics Committee report cleared him of wrongdoing, the report itself did.

On the day the report came out in February, he defiantly said—quote

“I‘m glad for the wording of it because it clearly exonerates me.”

Ron Reagan? 

REAGAN:  Well, we all know Charlie.  And you got to feel kind of sorry for him, but he got caught with his hand in the cookie jar.  And he‘s just dancing as fast as he can to try and put a good spin on it.  But if we‘re going reward that kind of lying, we ought to mention John Ensign‘s parents as sort of honorable mention for claiming that they gave $90,000 to his mistress just out of the goodness of their hearts, not to keep her quiet or anything, you understand.

MATTHEWS:  I like the way you do this, Ron.  I‘m going after a Democrat you like, so you switch to a Republican you don‘t.

REAGAN:  Well, you know.


MATTHEWS:  Let‘s go to Mayor Brown. 

Mayor Brown, Speaker Brown, I know Charlie is very lovable and very likable, but his spin on this thing is world-class.  That‘s all I can say.  Your thoughts?


WILLIE BROWN (D), FORMER MAYOR OF SAN FRANCISCO:  Well, I think he genuinely believes that.  He still believes it today. 

If you notice that, when he was finally convicted, when he was finally censured, he said, I‘m very pleased with what you have done.  I believe I‘m innocent. 


BROWN:  He did not in any way apologize.  So, he believes it.

And, frankly, when it comes lying you have to separate the person who‘s uttering the words.  If they really believe it, they have a problem. 


I agree with his argument.  It should have been a reprimand, by the way.  And I do believe something that was said by Chaka Fattah here on the show, the congressman from Philly.  You don‘t want to be judged by a jury of politicians in a hot political season, because every one of them is going to vote to condemn.  That‘s the way it goes.

Let‘s take a look at this next one, the fourth biggest whopper of the year, a frequently circulated conservative talking point that Democrats were going to raise taxes on small business owners.  Republican Congressman Randy Neugebauer claimed that 94 percent of small businesses will face higher taxes under the Democrats‘ plan this year to limit the tax cuts to $250,000 a year.

Mayor Brown, 94 percent of small businesses are going to get whacked because the Democrats want to limit the additional marginal tax cut to the people who make under $250,000. 

BROWN:  Well, that‘s just an out-and-out lie.  And the man who uttered those words know it‘s an out-and-out lie.

But that‘s not unusual.  For those of us who are politicians, we regularly say what we need to say in a situation in order to enhance ourselves.  That‘s just standard politics. 


MATTHEWS:  Spoken as a true ex-office-holder. 

BROWN:  Which is a little depressing, but—


MATTHEWS:  OK.  Ron, you take this one. 

Here‘s governor-elect Rick Scott.  He clearly believes in the stimulus.  And we know the stimulus has not created one private sector job.  There‘s his statement, Rick Scott‘s ridiculous charge about the stimulus bill that he made during his campaign against Alex Sink.  Let‘s listen to him do it here. 


RICK SCOTT ®, FLORIDA GOVERNOR-ELECT:  She clearly believes in the stimulus, when we know the stimulus has not created one private sector job. 


MATTHEWS:  Now, this is one real big mistake I think voters made this year. 

Mayor Brown, I really think a mistake was made by the voters of Florida.  And I don‘t—I rarely say that.  I think they are discerning.  They have generally made smart decisions.  Here‘s one.  This guy should not be in office with that kind of claim, not a single job.  We spend a trillion dollars in stimulus.  A third of that is in tax cuts and doesn‘t create a single job.  That‘s his claim. 


REAGAN:  Yes, go ahead, Mayor.  I‘m sorry. 

BROWN:  He is just out-and-out wrong. 

As a matter of fact, I suspect that even his wife probably told him, you can‘t say that.  Just think.  At Goldman Sachs, they created jobs with that money. 


BROWN:  At the auto industry, they created jobs with that money.  So, don‘t say it didn‘t happen.  You can say Democrats didn‘t do enough or they‘re not—they shouldn‘t get any benefit from them.  But one job?  Are you kidding me? 

REAGAN:  Well, Rick Scott is such a trustworthy guy, though.  Wasn‘t it his health care firm that was fined over $100 million for defrauding Medicare?  So, this guy, you can take what he says to the bank, I‘m sure.

MATTHEWS:  There‘s a claim to fame.


MATTHEWS:  That will get you elected governor of Florida. 


REAGAN:  Yes, apparently.

MATTHEWS:  Let‘s take a look at this.  My hero and heroine, Michele Bachmann, here, who‘s been named today, by the way, to the Intelligence Committee—there‘s a whopper. 


MATTHEWS:  Anyway, this is the second biggest whopper of the year.  It spread like wildfire across the conservative TV and radio.  It was the outrageous charge that President Obama‘s trip to India cost $200 million a day.  And the false rumor was picked up and repeated by none other than Republican Congresswoman Michele Bachmann.  Let‘s listen.


REP. MICHELE BACHMANN ®, MINNESOTA:  The president of the United States will be taking a trip over to India that is expected to cost the taxpayers $200 million a day. 


MATTHEWS:  You know, you know where they got that, Mayor? 

Let‘s go with Ron on this one.

You know, they got that from some local Indian newspaper.  And, of course, they wanted to believe it, so they ran it like it was truth.  The non—apparently, a president does cost money to travel, about $5 million a day, if you throw in Secret Service, security, and everything on the ground.

BROWN:  Sure.

MATTHEWS:  They did estimate that based on Clinton‘s trips, but they just come out with $200 million a day.

REAGAN:  Based on nothing.  As you said, some paper in India throws this figure out there with no attribution whatsoever, and the Republican Party picks it up and begins to run with it.  And suddenly, it‘s all over the Internet.  And there are people that this nonsense.  It‘s incredible.

MATTHEWS:  You know why, I‘ve suggested that Michele Bachmann does sort of represent sometimes the behavior of a zombie, that she does seem somewhat like she‘s hypnotized.  I‘m serious.


MATTHEWS:  But why does she just mimic something that somebody puts in front of her and states it as a fact, Mayor?  It‘s absurd.  Can‘t she do any discernment and say, well, this doesn‘t quite make sense?

BROWN:  You‘re making an assumption that people who get elected to office in all cases are people who can think, people who pursue and reduce themselves for sure to quality information.  She is not in that category.  The voters elected her and the voters deserve her idiocy.

MATTHEWS:  Do you know that you‘re talking about a member of the House Intelligence Committee, sir?  Do you know who you are addressing here?  A woman (INAUDIBLE) who‘s in power?

BROWN:  It‘s a reality.  She clearly believes $200 million.  And if she believes $200 million, that doesn‘t have to be a factual foundation.  That‘s just how out to lunch she really is.

MATTHEWS:  I know she spends a lot of time going through the newspaper racks for the latest news from the Indian press.  That‘s her regular source of information.


REAGAN:  We laugh about her—we laugh about her being on the intelligence committee, but that‘s an important sort of post.  It‘s actually a little disturbing that she‘s going to have access to—you know, to top secret cables and things.  She‘s a loon.


MATTHEWS:  Let‘s not escalate this.

BROWN:  She may not be able to find the meeting room.

MATTHEWS:  Anyway, it‘s getting worse.  I‘m going to change the subject.

Let‘s go to PolitiFact‘s biggest whopper of the year, as they see it. 

Drum roll, please.

The Americans attack line, the Republicans attack line, that the Democrats‘ health care reform was a government takeover. 

Here‘s a greatest hits.  Listen.  Let‘s listen to this one.


SEN. JIM DEMINT ®, SOUTH CAROLINA:  Pushing through a massive government takeover of our health care system was certainly not a good idea.

SARAH PALIN ®, FORMER ALASKA GOVERNOR:  This isn‘t reform.  This is government takeover.  This is about control.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER:  All we need is enough Democrats in the House of Representatives to do the right thing for the American people and they can be spared this big government takeover of one sixth of our economy.

REP. MIKE PENCE ®, INDIANA:  This is not the president‘s House.  This is not the Democrats‘ House.  This is the people‘s House and the American people don‘t want a government takeover of health care.

REP. JOHN BOEHNER ®, OHIO:  Listen, the American people are concerned about the takeover of health care.

REP. ERIC CANTOR ®, VIRGINIA:  I want to go and expose to the American people how egregious this government takeover of health care is.


MATTHEWS:  Are we watching a Woody Allen movie here?  If the keyword here is government takeover, Mayor, the keyword here, did they get all their talking points from Frank Luntz?  I mean, where are—some guy down on the beach in Santa Monica is knocking out the terminology, the lingo in these people.  It is reciting.  Don‘t they know they sound like parrots?  Just a thought.

BROWN:  Well, Chris, this guy—Frank Luntz is basically a genius on words and what he was paid to put these words together, he deserves literally whatever he was paid because every single solitary Republican bought it.  Not only did they buy it, they sold it to the American people.

And the way they got away with selling it to the American people, there were not the clear outside, uninterested, with no agenda to push voice saying, wait a minute, it‘s a lie.  Whenever these Republicans were interviewed, they got away, because nobody said, what do you mean, takeover?  Define that word for me.


BROWN:  Walk through it with me.  Are you talking about a coup?  Are you talking about something that happened in South America or Africa?  Come on, give it me.


BROWN:  None of them would have been able to answer.  And Frank Luntz would have been laughing his rear end off.

MATTHEWS:  I know.  Years ago, I remember reading about these two guys who live on a boat off in San Francisco.  They were liberals.  And they used to knock out these fiery fundraising letters.  I mean, it‘s like Luntz has replaced with -- 


BROWN:  He‘s a genius, Chris.  The guy is really a genius.

MATTHEWS:  Government takeover.

You know, I don‘t want to government getting involved with Medicare either.


REAGAN:  Hands off my Medicare.

MATTHEWS:  And by the way, you know who took over health care in this health care bill, the insurance companies.  They‘re the ones getting all the money.  The requirement is you buy insurance from an insurance company.  There is no public option.  This is a private sector approach all the way.

Anyway, I don‘t know.  I think it came from the Heritage Foundation and they‘re calling it socialist.

Anyway, thank you, Mayor Brown.  Have a nice Christmas.

You, too, Ron.  Good luck with the book, although, I‘m telling you, I‘ve read enough, but I know it‘s going to be a major, major explosive bit of publication, a hell of a book already.  I‘m loving it.  You know, I‘m stunned by it, but anybody who doesn‘t read it is crazy.  This is a hell of a book coming up, “My Dad at 100.”

Anyway, thank you.  We‘ll be getting you on to talk about it when it comes out officially.

REAGAN:  Yes, we will.

MATTHEWS:  Up next, the Tea Party has its eye on congressional Republicans, warning that the tax cut deal with President Obama violates Tea Party principles.  Is the relationship between Republicans and the Tea Party who put them in power already on the rocks?  Will this marriage last?

Let‘s get the founder of the Tea Party Nation coming here to tell us how he‘ll hold Republicans accountable once they do get control of the House.

This is HARDBALL, only on MSNBC.


MATTHEWS:  Former President Jimmy Carter says America is now ready to elect a gay president.  Carter told the Web site BigThink.com that the country has made tremendous strides forward with the issue of gays, and says while he doesn‘t think it will happen in the next election, well, I‘m not sure if there‘s anybody (INAUDIBLE), he says he thinks it will in the near future.

HARDBALL will be right back.



SEN. MARK KIRK ®, ILLINOIS:  It seems that change has come to the Senate tonight with the death of this $1.1 trillion plan.


MATTHEWS:  Welcome back to HARDBALL.

That‘s newly-elected Senator Mark Kirk from Illinois, and last night‘s collapse of the trillion dollar spending bill, the C.R. as they called it, continuing resolution.  The bill was stuffed with earmarks by both Ds and Rs—just in the kind of spending that‘s exactly the kind of Tea Party deplores publicly and privately.

Howard Fineman wrote in “The Huffington Post,” “The new, more Republican Congress won‘t arrive in town until next month, but the Tea Party era unofficially began on the Hill Thursday night.”

So, will the Tea Party and the GOP clash or join together.

Judson Phillips is the founder of the Tea Party.

John Feehery is joining us as well.  There is John.  He‘s in crewneck sweater I think—a Republican strategist.

Well, gentlemen, I want you two to sort of lay out for me sharp on the issue, what‘s the difference between somebody who cares about how government is run and somebody who is inside it?  It seems to me one of the people inside it, one of their differences is, they want to stay inside and they think it helps them, packing bills up with pork.

JUDSON PHILLIPS, FOUNDER, TEA PARTY NATION:  Well, the two are not necessarily mutually exclusive but you‘re right.  Alex Tocqueville once said democracy in America will remain safe until the politicians discover they can bribe the Americans with their own money.  And that‘s kind of what has happened now.

And Americans have finally gotten tired of it.  They‘re finally saying, no.  They‘re finally saying, hey, you can work inside of the system if you want, provided you listen to us, and if you don‘t, well, we‘ll just like they do at Wrigley Field and you‘re out of here.

MATTHEWS:  Yes, yank the pitcher.

John, it seems to me, though, that you and you grew up—I‘m older than you—but we grew up thinking that a Congress person, R or D, d likes to write those newsletters home.  You know?  The quarterly newsletter that was paid for by the taxpayer, listing what they brought—they got a bridge fixed that has been made something in a historic site.  These little doo-dads go on the front page of their newsletters.

Isn‘t that what they all want to do, is claim particularly beanies they brought home?

JOHN FEEHERY, REPUBLICAN STRATEGIST:  You know, Chris, I‘ve been up here for about 20 years and we‘ve gone through these periods where politicians get the message.  Did not spend any more money and every Republican I talk to up on the Hill, they have a simple message—cut spending, create jobs, let the private sector create jobs.  And I think that‘s what the Republicans are going do.  I think that‘s what they‘re going to continue to do.

And I think that‘s why they defeated these earmark bill in the Senate yesterday.  I think it was a big victory for the Republicans.  There‘s no doubt about that.

MATTHEWS:  Well, how do the appropriators—how the appropriators who have all the clout because they can decide who gets the beanies, how can you beat the appropriators?  What changed?

FEEHERY:  Well, it‘s fascinating, Chris.  No one wants to be on the appropriations committee anymore.  It‘s actually a sea change from when you are on the Hill and when I was on the Hill.


FEEHERY:  People got on the appropriations committee and they stayed on the appropriations committee.  Now, they don‘t want to be on the appropriations committee, and they are in the appropriations committee, they have a tough time get reelected.

It‘s a real sea change.  And I think you‘ll see the appropriators are going to change their tune.  And they‘re going to find programs to cut.  And I think that‘s a good thing for the country.

MATTHEWS:  Yes, Arlen Specter of Pennsylvania, moderate Republican all these years, right?  For years—

PHILLIPS:  Liberal.

MATTHEWS:  Oh, you call him a liberal, fine.  For years, for years, he got reelected, and reelected and reelected because he was on appropriations, and would say I did this for Scranton, I did this for Pittsburgh, blah, blah, blah.  It didn‘t work this sometime.

PHILLIPS:  No, it didn‘t.  And that‘s the sea change that John was talking about.  The American people are just truly—

MATTHEWS:  What about states like West Virginia that live completely on pork?  I mean, Bobby Byrd covered that state in asphalt in buildings, right?

PHILLIPS:  Well, how many buildings in West Virginia are there that are not named after the man?

MATTHEWS:  It worked.  He got re-elected every six years.

PHILLIPS:  He did.  He‘s proof of the Tocqueville theory.

MATTHEWS:  Yes.  Well, let‘s take a look at this.  The national director of the Tea Party Patriots put out a memo that reads in part, quote, “We must not rest.  There is more madness to come and they are just waiting for us to go to sleep.  We will be vigilant and we will be watching.”

How do you guys keep a lot—I mean zealotry by its nature is short-lived.  How do you keep zealotry alive in that?  Because you guys aren‘t getting paid.  Your membership are kitchen table people?  How do you keep them involved when they‘re not employed by this business of Tea Party work?

PHILLIPS:  Keeping people involved can be tough because there‘s ups and downs.  And we‘re fixing to go into a lull with the holidays and everybody leaving Washington.  We just keep them informed.  I know at Tea Party Nation, we send stuff out a lot.

MATTHEWS:  I hope that you can cut a deal with this president even though you don‘t like him on long-term spending cuts, that would be a great thing.

Thank you, John Feehery, it‘s a short segment tonight because I don‘t want to get in the way of my speech I‘m giving in a few minutes.


MATTHEWS:  John Feehery, thanks.  I like you in that Catholic-looking crewneck by the way.  You obviously went to Catholic school.

FEEHERY:  Appreciate it, yes.

MATTHEWS:  When we return, “Let Me Finish” with why President Obama did the right thing when he cut this deal with the Republicans, politically, because he‘s got a lot of other things coming the right way now because of it.

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  “Let Me Finish” tonight with our president.

Some have been brutal toward him of late, they‘ve used terrible words to describe the decision that he made about the tax cuts.

Well, here‘s my cut at it: people who say he sold out—and they have a right to say if they want to—have it wrong.  There‘s a difference between what the French did in World War II and what the English did.  The French sold out.  They turned their country proud France into a collaborator with the Third Reich.  That‘s what Petain did, that‘s what the De Gaulle, the greatest man in French history refused to do.

What did the British do?  They pulled the greatest strategic retreat in the war.  They got their troops off of the continent (INAUDIBLE).  They evacuated; and by doing so, saved the British army to fight again.  They avoided catastrophe.

What did Obama do, he knew what was coming.  The Republicans won the House of Representatives in the election.  They‘re coming into power this January 5th, their first order of business H.R.1 would had been to cut taxes for everyone, to take historic credit for cutting the taxes on everyone that the Democrats let go up.  It was as clear as day for anyone willing to look straight ahead and see what was coming.

This is what President Obama did and made the necessary decision: cut the best deal he could to get extended unemployment benefits and a cut in the payroll tax for employees.  He got that, plus a number of other Democratic measures and avoided in the decision giving the Republicans a giant hammer to use against them in 2012 and future elections—that they, the Republicans, cut taxes after the Democrats had let them rise again.

And one more time, there‘s a huge difference between a sellout and a strategic retreat.  Our president did the smart, and, therefore, good thing for the country, for his party and for history.  Their critics—well, they‘re critics.  They have a right to criticize.  He, Barack Obama has the job to lead.

As a result, we‘ve got a good shot at two vital successes that could have easily been crushed, the end of “don‘t ask, don‘t tell” and ratification of the new START nuclear arms treaty.  The alternative, again, let‘s never forget, was to end this Congress with taxes rising on the Democratic watch, the Republicans ready to lower them, a continuation of DADT and a very good chance of renewed hostility with Russia.

If President Obama can do this well with a pair of twos in his hand and that‘s certainly the best that you can say he got handed to him by the election in November, just think what he‘ll be able to do the moment and it will come when he gets dealt a decent hand.

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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