Guests: Mark Halperin, David Corn, Michelle Caruso-Cabrera, Gene Sperling, Marsha Blackburn, Stephen Moore, Christian Weller, Ed Rollins, Steve McMahon
CHRIS MATTHEWS, HOST: Obama answers the call.
Let‘s play HARDBALL.
Good evening. I‘m Chris Matthews in Washington.
Leading off tonight: The great debate. Do we want a government to do what it‘s doing and pay for it, or do we want to dump a whole lot of what government‘s doing right now and get by with the current tax rates?
Well, today the president took sides in that big debate. He said we‘ve made commitments, it‘s called the social compact, and we simply have to pay our bills. President Obama made it clear cutting waste, fraud and abuse is a campaign slogan, not a solution. He drew a line in the sand. He said he will not renew Bush tax cuts for the wealthy and Medicare will not be shelved.
Well, the Republicans attacked before, during and after his speech today, and we‘ll have it all for you at the top of the show.
Plus, behind this is a more fundamental argument about who we are as a society. Do we believe that the rich should get to keep all the money they make because they take the risks and create the jobs? Or should the wealthy owe some of their wealth to the people who do the work and also to the less fortunate? We‘ll have that debate tonight. That‘s the one behind the debate.
Also, what‘s behind this sudden rise of Donald Trump? Surely, it‘s mainly the birther talk to start with, but could it be that Republican voters out there just want to see someone going into the president‘s face?
Finally, listen to this declaration from Tim Pawlenty last night.
(BEGIN VIDEO CLIP)
TIM PAWLENTY ®, FMR. MINNESOTA GOVERNOR: I‘m running for president. I‘m not putting my head in the ring rhetorically or ultimately for vice president. So I‘m focused on running for president.
(END VIDEO CLIP)
MATTHEWS: “I‘m focused on running for president.” You heard it. Well, that sounds like Pawlenty said he was running for president. Join the crowd. But Pawlenty now says he never really said what he said last night. He said he said something he‘s not supposed to say, the truth, apparently. Well, we‘ll tell you what Pawlenty really meant to say, or actually, what he did say. It‘s fascinating stuff, isn‘t it?
“Let Me Finish” tonight with the gap between that skinny little government we like to say we want and the big, muscular government we actually expect.
We start with President Obama‘s speech today. Gene Sperling is the director of the White House‘s National Economic Council. Gene, it‘s great to have you on. Let me focus for just a minute or two on what most of the people watching really care about, and then we‘ll get to what the president talked about and the Republicans are fighting about today.
The main question I have is, a while back, in the first year of this administration, Christina Romer, the economic adviser to the president, said we‘re going to have the unemployment rate down to 8 percent. Is that an achievable target before the next election? Will you reach it?
GENE SPERLING, DIR. NATIONAL ECONOMIC COUNCIL: Well, there‘s no question we learned after we took office that we had a much deeper recession, everybody did, and that‘s made—given us a tougher hole to dig out. But I think what we‘ve seen is we‘ve seen the president take the necessary emergency efforts to prevent us from going into a great depression. We‘re seeing the economy start to recover now. We‘re seeing strong job growth, private sector job growth at 200,000 a month. And what you‘re seeing today is the president saying that part of that—
SPERLING: -- economic growth strategy has to be a comprehensive deficit reduction plan that‘s done in a way—
SPERLING: -- that will not inhabit this recovery but strengthen it.
MATTHEWS: This program is a political show, Gene, as you know well. It‘s HARDBALL. And I want an answer to the question. Will we get below 8 percent by the time the voters go to the polls next November?
SPERLING: I‘m not going to make projections. I think that we‘re making more progress than anyone could have thought. We were at 9.8 percent. The drop to 8.8 percent in three or four months is one of the largest drops we‘ve ever seen. So we‘re hopeful, but I‘m—we‘re going to worry less about making projections and more about doing the right economic policy—
SPERLING: -- and keeping our focus on job growth.
SPERLING: And that‘s why things like the payroll tax cut that the president passed are very important and are helping this recovery right now.
MATTHEWS: Let‘s talk about the president today. Here he is, the president. Let‘s listen to the president. You interpret. Here he is, making his case for why the rich should pay more in taxes. I thought it was fascinating. Let‘s listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So here‘s the truth. Around two thirds of our budget—two thirds—is spent on Medicare, Medicaid, Social Security and national security. Two thirds. Programs like unemployment, student loans, veterans‘ benefits tax credits for working families take up another 20 percent. What‘s left after interest on the debt is just 12 percent for everything else.
(END VIDEO CLIP)
MATTHEWS: You know, that sounds like a heavy lift, Gene, for the president to ever get near anybody balancing a budget or even getting close back to what we used to think was sort of a normal balance of spending and taxes. What are we going to do about it? Seems like the American people don‘t want to give up a big defense budget. They don‘t want to give up Medicare. They really don‘t want to give up Social Security. They don‘t want to give up Medicaid even. What can we really cut?
SPERLING: Well, I think you should look at what the president put forward today. His message was, as you said, there are no easy choices. If we‘re going to bring down the deficit in a way that allows us to still invest in our future, protect Medicare and Social Security, we‘ve got to make tough, balanced choices across the board.
And what‘s he‘s really saying in terms of the most well off is just that we need a sense of shared sacrifice. We have to make choices in the budget, and you can‘t ask people to make very difficult choices in terms of Medicare, Medicaid and spending, and then at the same time suggest that those savings, rather than going to reduce the deficit and the debt, are being used just to afford tax relief to the most fortunate Americans.
It‘s just a matter of making sound choices and having a sense of shared sacrifice when you‘re doing deficit reduction.
MATTHEWS: Are we going to keep the household deduction for interest payments? Are we going to keep the deduction when you itemize for charitable contributions? Or are we going to get rid of those?
SPERLING: What the president put forward in his budget already is he suggested that we limit the amount of deductibility for those at the higher end so that they‘re not getting two, three—more than two or three times more than what most middle class families are getting.
So I think we do have to look at itemized deductions, and the president said we should look at the type of bipartisan tax reform the Bowles-Simpson commission called for. That suggests that if you reduce those type of tax exemptions, you use that money both to lower tax rates on Americans and to also at the same time try to bring down our deficit.
MATTHEWS: Well, take a look at—here‘s something more of the president today. Here he is talking about the need to tax more of the rich. Tax the rich more. Let‘s listen.
(BEGIN VIDEO CLIP)
OBAMA: Some will argue we should not even consider ever, ever raising taxes, even if only on the wealthiest Americans. It‘s just an article of faith to them. I say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more. I don‘t need another tax cut. Warren Buffett doesn‘t need another tax cut. And here‘s the thing. I believe that most wealthy Americans would agree with me. They want to give back to their country, a country that‘s done so much for them. It‘s just Washington hasn‘t asked them to.
(END VIDEO CLIP)
MATTHEWS: Well, what is this? I mean, if you look at the polls, people will say the wealthy, the millionaires should pay more taxes, but the Republicans in Congress—well, they control the House. That‘s where the revenue decisions are made. How in the world can the president get this done?
SPERLING: Look, what‘s the president‘s making clear is you need shared sacrifice for shared prosperity. And look, the fact is that 1983, President Reagan, Speaker Tip O‘Neill, 1990, the elder President Bush, a Democratic Congress—they came together and did bipartisan debt reduction plans. And they—you do things that are painful across the board, but they all included revenues and they all asked those—
SPERLING: -- who are most well off to pay a somewhat higher share, not because you want to raise taxes on anybody, but you want to bring down our deficit in a way that involves shared sacrifice. And if you do that right, the whole economy will benefit and everyone will benefit and you‘ll have shared prosperity.
MATTHEWS: OK. Thank you very much, Gene Sperling from the White House.
Let‘s go now to Republican congresswoman Marsha Blackburn of Tennessee. Will you—let‘s get to the point of taxes here. Will you support a tax increase for any income class, zillionaires, millionaires, billionaires, anybody? Yes or no?
REP. MARSHA BLACKBURN ®, TENNESSEE: I do not support tax increases.
We have—many of our—
MATTHEWS: In any income group? For any income group?
BLACKBURN: -- small businesses—our small businesses are telling us
and most of these, Chris, file on individual income tax forms.
BLACKBURN: And our small businesses, 90 percent of the employers in this country, are telling us, Do not raise our taxes, we can‘t afford it. The uncertainty—
MATTHEWS: Of course they do.
BLACKBURN: -- of regulation, the heavy hand—we‘re trying to create jobs.
BLACKBURN: And if you look at the small business numbers, about 70 percent of the jobs we‘ve created—
BLACKBURN: -- over the past decade have come from small businesses.
So no, you don‘t want to tax those small businesses.
MATTHEWS: So let me ask you about billionaires, trillionaires,
whatever, anybody that makes millions of dollars a year. Should they pay -
I‘m just wondering how we‘re ever going to balance the budget. You can‘t come up with $1.6 trillion in cuts right now. So in the end, you‘re going to have to do something with revenues. Why shouldn‘t the very rich be those people providing those revenues for the government?
BLACKBURN: Chris, you—
MATTHEWS: You can‘t cut it enough to balance the budget, can you?
BLACKBURN: What people don‘t—yes, you can.
MATTHEWS: Where are you—
MATTHEWS: Tell me where you‘re going to cut $1.6 trillion in government spending.
BLACKBURN: What the president doesn‘t seem to understand, Washington does not have a revenue problem, it has a spending problem.
MATTHEWS: I know—OK, I know this song.
BLACKBURN: We are in the middle—
MATTHEWS: That‘s a song.
BLACKBURN: -- of a spending-driven debt crisis—
MATTHEWS: That‘s lyric. That is a lyric to a song, Congresswoman.
BLACKBURN: No, it isn‘t a lyric. It‘s a fact.
MATTHEWS: I‘m asking you, though—
BLACKBURN: It‘s a fact.
MATTHEWS: Let me ask you for a fact, not a song. How do you reduce the federal deficit by $1.6 trillion—that‘s the deficit right now—by cutting? Give me your cuts for $1.6 trillion. That‘s how much we‘re over right now.
BLACKBURN: Let‘s start with the Ryan budget.
MATTHEWS: Let‘s start with it? OK.
BLACKBURN: It is going to hit the floor tomorrow. That is $6.2 trillion in spending reductions over the next decade. Go to the Republican Study Committee budget—
BLACKBURN: -- that is going to be even more of that. And they‘re listed—you can go to my Web site—
BLACKBURN: -- Blackburn.house.gov.
MATTHEWS: Will you vote for it?
BLACKBURN: You can follow the links. They‘re there. And my buddy—
MATTHEWS: Will you vote for the Ryan budget?
BLACKBURN: Yes, I‘m going to vote for Ryan budget and I‘m going to vote for the Republican Study Committee budget, too. It is time that we get this—
BLACKBURN: -- country on the road to fiscal health.
MATTHEWS: What are we going to do—
BLACKBURN: And there is a way to do it.
MATTHEWS: OK, let‘s talk about the two big issues. Let‘s talk about Medicare and defense. Medicare—everybody knows that‘s driving the budget. Let me ask you this right now. Can we tell seniors that instead of paying for their health benefits, which we do now—the federal government does now under Medicare—that we‘re going to give them a check which will pay a portion of their medical cost, and then they have to go out and find an insurance company to insure them. Do you think that‘s good idea? That‘s the Ryan idea. Is that a good idea?
BLACKBURN: What we have in the Ryan budget, where seniors have more options, more—things that are—more familiar to them via Medicare Advantage. What you‘re going to see is more options for seniors, but these won‘t kick in until you get to—I think it‘s 2021. So people that are under 55, 54 years old—
BLACKBURN: -- are going to see a change and it will be—
MATTHEWS: What‘s the option here?
BLACKBURN: -- similar to the Medicare Advantage program.
MATTHEWS: Tell them there‘s no more Medicare—but you say they have an option, but they don‘t have an option of keeping Medicare as it is. They don‘t have that option under the Ryan plan.
BLACKBURN: They have an option of expanding the coverage that they have. Talk to people that are in the Medicare Advantage program. It works.
MATTHEWS: No, no.
BLACKBURN: They‘re happy with it.
BLACKBURN: They like having—
BLACKBURN: -- the opportunity to have—
MATTHEWS: This is where we go into—I respect you, Congresswoman.
You‘ve been elected so many times, and you‘re great to come on the show. But here‘s the problem. The reason Medicare was passed in the ‘60s is because the private sector wasn‘t providing medical care for people. Once you reach your 70s and 80s, nobody‘s going to bet on you having great health. They know it‘s going to be expensive. You‘re going to be making a lot of costs for that company. So the government has to pay it. That‘s why people have Medicare, why they like it. You‘re saying a private company is going to go out and insure somebody in their 70s and 80 against not having big medical costs? They‘re going to think that‘s a good investment?
BLACKBURN: Chris, I‘ve got to tell you, as we have talked with our near-seniors and with seniors, those that have more options like having more options. They will tell you that. But the Ryan budget does not touch those that are seniors and near-seniors. It moves back down—remember, Medicare is a program that has been coming—that money has been coming out of your paycheck. The government has first right of refusal on your paycheck. What we want to do is preserve the program.
The way you do that is to move back down the age tables a little bit and then say, Let‘s look at options and give you more options. And do I think it‘s going to work? Yes, I do. Did the prescription drug benefit program come in under budget? Yes, it did. Have seniors responded and have insurance companies responded to the opportunity to provide—
BLACKBURN: -- seniors with more options? Yes, indeed, they have. And I think that what we need to do is realize that cutting what the federal government spends—
BLACKBURN: -- beginning to make some serious decisions and have some adult conversations needs to be done. And for the future—
MATTHEWS: I agree with you. I agree with you about that.
BLACKBURN: -- of my two grandsons, I‘m willing to have those conversations.
MATTHEWS: OK. I‘m worried about—I keep asking people, both parties, including yours, how do you get rid of as $1.6 trillion deficit right now?
BLACKBURN: You stop spending.
MATTHEWS: And I get answers that have nowhere near come through with the money. The money is nowhere near even—
BLACKBURN: I‘ve just given you two. I‘ve just given you two.
MATTHEWS: It is not $1.6 trillion—
BLACKBURN: The Ryan budget—
MATTHEWS: -- this year. It just isn‘t.
BLACKBURN: Well, the Ryan budget comes into primary balance—
MATTHEWS: It doesn‘t kick in—
BLACKBURN: -- in 2015, and the Republican—
MATTHEWS: -- until people turn 55 at some point down—
BLACKBURN: -- Study Committee budget comes into primary balance in 2014.
BLACKBURN: Great country song, when (INAUDIBLE) hole, stop digging, and that‘s exactly—
BLACKBURN: -- what the U.S. House of Representatives needs to do.
MATTHEWS: OK. Thank you very much, Congresswoman Marsha Blackburn.
BLACKBURN: Thanks, Chris.
MATTHEWS: Thanks for coming on HARDBALL.
Coming up: What‘s behind all this nowhere (ph) -- well, it‘s a hell of a rise out of nowhere for Donald Trump. He‘s now leading the pack—maybe it shows you what the pack‘s up to. All of a sudden, he‘s leading the field. He‘s talking a lot about the birther issue. Is that what‘s pricking the balloon of the Republican Party? Let‘s find out.
You‘re watching HARDBALL, only on MSNBC.
MATTHEWS: Well, this is serious business. President Obama may have a Pennsylvania problem. According to a new PPP poll, the president is virtually tied now in the Keystone state with three potential Republican challengers, Mitt Romney, Mike Huckabee, and the home-grown Rick Santorum. Against Romney, President Obama trails 43-42. No difference there.
Against Huckabee, the president leads by just 45-44. No difference there. And against Santorum, who‘s from Pennsylvania, the president leads by just 2, 45-43, no real difference there. Well, the poll shows the president‘s biggest problems are—and I could have told you this—with independents and with white Democrats. Could have told you that.
We‘ll be right back.
(BEGIN VIDEO CLIP)
DONALD TRUMP, TRUMP ORGANIZATION: I‘m only interested in Libya if we keep the oil. If we don‘t keep the oil, I‘m not interested.
(END VIDEO CLIP)
MATTHEWS: Well, where do you go from there? Welcome back to HARDBALL. That was Donald Trump, of course, talking tough about foreign policy last week on the “TODAY” show. Well, he‘s been stirring up headlines lately due to his birther comments, but he‘s certainly not afraid to take on the president when it comes to jobs, the economy and everything else he might be asked about in his questioning. Anyway, it‘s not been the toughest questioning so far. Anyway, his willingness to fight seems to be resonating with Republicans out there. They love the fact that he has no respect for the president. He‘s dissing him every time he goes on television.
One of the people who believes that is Mark Halperin, who‘s a smart analyst. He‘s MSNBC senior political analyst. And we also have “Mother Jones‘s” David Corn, who‘s also an MSNBC contributor.
Mark, I‘m trying to get to this because I think you‘re right. I‘m looking at who‘s getting killed by this guy. Just a month ago, Mitt Romney, the voice of American business, you know, was up there at 18 points, and he was basically in second. Now he‘s down to fifth, thanks to Trump. Trump has basically replaced him as the business leader in this fight. Your thoughts? In fact, it is your thought.
MARK HALPERIN, “TIME,” MSNBC SR. POLITICAL ANALYST: Well, I mean, I think it‘s the case that a lot of focus is on Trump and can he be the nominee or not, his riding the birther issue, which obviously has resonance.
But, again, I think the bigger things to look at is, what are the things he is doing stylistically and substantively that are striking a chord, not just with hard-core Republicans, but with independents, and I think have potential to strike a chord with Democrats?
One of them is, he is in Obama‘s face.
Romney has taken a purposely low-key approach. His style is pretty low-key. Same with Tim Pawlenty. Even people like Haley Barbour and Newt Gingrich, who can be rougher, they do not have the same no-holds-barred style that Trump has engage in with a real focus on the president.
And I think that is part of why he has risen in the polls. People say it is because he is well-known. Sarah Palin is well-known. Newt Gingrich is well-known, and they‘re not where Trump is in these couple polls.
MATTHEWS: Yes, he seems more streetwise, David, and I think he‘s a tougher sort of attitude guy, attitude, as we stay in Philly, and it‘s much more mouthy, to be blunt about it, than the other guys.
CORN: Well, he is, but he is also playing this like a reality show.
MATTHEWS: That is my phrase.
CORN: Well, I‘m sorry. I took it.
CORN: But, you know, and he—
MATTHEWS: Well, I will say—let‘s do one line. Jump on your line, but when he gets mad at people you call up to get your computer fixed or something, in a boiler room, somewhere, it‘s in India. And the guy says, I‘m from here. I‘m from Georgetown and he‘s got a foreign accent.
He is making that somebody‘s fault. Whose fault is that? He is
saying that is the Indians‘ fault for picking up the jobs. What—what is
is that just chauvinism?
MATTHEWS: Here he is on Monday night. Then you can answer this.
MATTHEWS: What is he talking about? Who is he blaming here for this world view? Let‘s listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, CHAIRMAN & CEO, TRUMP HOTELS & CASINO RESORTS: When you
look at what the world is doing to us, they don‘t respect us, they don‘t respect our leaders, they certainly don‘t respect Obama.
When you look at what—what‘s happening on the outside in, meaning what China is doing, what OPEC‘s doing, what many other countries are doing to us, where you call up about a credit card and you‘re calling India, because they outsource so many jobs, you look at our unemployment, you look at our lack of jobs, our lack of good jobs and real jobs, a lot of things can be done to reduce that deficit, and I mean really quickly.
(END VIDEO CLIP)
MATTHEWS: Nobody wants those jobs to answer the phone in India. He is saying a lack of good jobs, and he‘s complaining about outsourcing the answer-the-phone jobs.
CORN: It‘s Citibank and the credit card companies here that are outsourcing those jobs.
MATTHEWS: And he is blaming the Indians.
CORN: Well, listen, this gets to the heart of the matter. He doesn‘t know what‘s talking about.
MATTHEWS: But the people listening like it.
CORN: Right now, he is all hair and no cattle. And if he wants to be serious about this, he has to deal with the birther issue and put that aside. And he has to start—
MATTHEWS: No, he doesn‘t.
CORN: Well, I think he does.
MATTHEWS: Who is going to make him do it? I can‘t do it. He won‘t do quit that one.
CORN: That won‘t play with independents. And when he comes to Iowa, he‘s going to have explain his flip-flop on both abortion rights and on gay rights.
MATTHEWS: Oh, you got him all the way to Iowa next year.
CORN: Listen, if he does this. I actually don‘t think he is going to do it.
MATTHEWS: He‘s made progress.
CORN: Right now, he‘s—right now, it‘s still just a reality show for him.
MATTHEWS: You know, I think he‘s lot like the—you know, the LaRouchies were very good at this, you know, Mark, over the years, and David. They would find anything that bugged the average business guy, whether it was Jane Fonda, anti-nuclear, and whatever that was, whatever button that was, the LaRouchies would put it at the airport, usually, with a card table set up like that, right?
CORN: And LaRouche ran for president.
MATTHEWS: It seems like he is doing that, Mark. Your thoughts.
HALPERIN: I don‘t disagree what David is saying about his seriousness and what you suggested about the lack of scrutiny.
But I will say again what is interesting to me in trying to figure out who the Republican nominee is going to be eventually is what are these hot buttons he is pressing which are clearly resonating? He was the best-received speaker at CPAC, which would not be a normal audience for him.
MATTHEWS: Right. Is it economic nationalism? Is it the Pat Buchanan argument?
HALPERIN: It‘s part of it. It‘s saying, why should we be fighting wars for Saudi Arabia, when they are not paying for it?
The clip you played—my hats off to your P.A., because that was like a greatest hit of populist buttons in the Tea Party, amongst independents, extraordinary resonance. And if he stopped making mistakes, and just—and developed these things a little bit more clearly, I think he could go higher in the polls than he has gone so far, because no one else is talking with the brashness and the style and bringing it back to Obama.
One of the big things Republicans think is, Obama is an illegitimate president, he shouldn‘t be there, we need somebody tough to go in there and say I can school this guy. And Trump can do that, stylistically.
MATTHEWS: But it‘s unscrupulous, right? You do acknowledge it is unscrupulous?
HALPERIN: Wholly and completely.
MATTHEWS: OK. Here he is on “The Today Show” last week with Meredith Vieira. Let‘s watch it, because this was one of his big performances. She asked him if there‘s a Trump doctrine. Let‘s listen.
(BEGIN VIDEO CLIP, “THE TODAY SHOW”)
TRUMP: Foreign affairs is, we take care of ourselves first, OK? We don‘t build schools in Afghanistan. We go to Afghanistan. We build a road. We build a school. Two days later, they blow up the road, they blow up the school, we start building the road and the school again.
In the meantime, we can‘t build schools in Alabama, in New Orleans, in Texas, in New York. We‘re spending trillions and trillions of dollars. My thing and my doctrine would be build, build, build.
(END VIDEO CLIP)
MATTHEWS: That‘s me. He has found my button, guys.
Mark, I have been pushing—I‘m not—I don‘t have—I don‘t have buttons, but that‘s one.
CORN: That‘s the Democrats and Ed Rendell and the infrastructure bank and build, build, build.
MATTHEWS: It‘s Bloomberg. It‘s everybody. It is Arnold.
CORN: He is like a cartoon character of—
MATTHEWS: No, he‘s not.
CORN: No, listen, listen—of Ross Perot. Ross Perot took this sort of same angry businessman populist.
MATTHEWS: He got 19 percent in the general election.
CORN: And he got 19 percent.
MATTHEWS: And he was certifiable.
CORN: Well, we will see --
MATTHEWS: This guy is not certifiable.
CORN: Listen, I think—
MATTHEWS: Does Trump know what he‘s doing?
CORN: Trump could run a serious campaign, if he chooses to.
CORN: So far, he hasn‘t chosen to.
MATTHEWS: Mark, is he going to run the race—is he going to get in the race and do any of the debates? What happens?
HALPERIN: I think, if the field remains this weak, and no one emerges and takes up the space Trump is taking up, he will run. And I think he will be a player.
Other candidates would be smart to look at what Trump‘s saying, try to figure out how to incorporate that into their own rhetoric, if they believe in it and it has resonance.
MATTHEWS: The difference between him and some of these other far-out right-wingers—first of all, he‘s not a right-winger.
MATTHEWS: He will study, and study and study. And when he goes in that debate, he will be awesome. That‘s my thought.
Anyway, Mark Halperin, thank you, David Corn.
He won‘t like be Palin or one of the other ones.
Up next, Tim Pawlenty says he is running for president, but he didn‘t mean to say he is running for president. Here he is.
(BEGIN VIDEO CLIP)
TIM PAWLENTY ®, FORMER MINNESOTA GOVERNOR: I‘m running for president. I‘m not putting my hat in the ring rhetorically or ultimately for vice president, so I‘m focused on running for president.
(END VIDEO CLIP)
MATTHEWS: Well, he‘s tricked into that.
Now, Pawlenty says—his camp says he is not really running yet.
Anyway, he‘s not supposed to say it, not supposed to do.
That is next in the “Sideshow.”
You‘re watching HARDBALL, only on MSNBC.
MATTHEWS: Back to HARDBALL. Time for the “Sideshow.”
First up, Tim Pawlenty‘s false start. Well, yesterday on CNN, he was asked whether he would accept the vice presidency. His response?
(BEGIN VIDEO CLIP, CNN)
PAWLENTY: I‘m running for president. I‘m not putting my hat in the ring rhetorically or ultimately for vice president, so I‘m focused on running for president.
(END VIDEO CLIP)
MATTHEWS: Oh. The problem? You‘re not supposed to say you‘re running until you make the actual announcement. Well, it‘s like seeing the bride before the wedding. Pawlenty‘s campaign realized what he had done and came out this tweet—quote—“He didn‘t announce anything. CNN took quote out of context”—close quote.
Anyway, Pawlenty‘s spokesman added that a formal announcement would come later this spring. So, he is running.
Next up, the anatomy of a gaffe. It started when Republican Senator Jon Kyl of Arizona made this claim on the Senate floor last week.
(BEGIN VIDEO CLIP)
SEN. JON KYL (R-AZ), MINORITY WHIP: If you want an abortion, you go to Planned Parenthood. And that‘s well over 90 percent of what Planned Parenthood does.
(END VIDEO CLIP)
MATTHEWS: Abortions are 90 percent of what Planned Parenthood does.
The reality? Three percent.
The disconnect was catnip for Jon Stewart and Stephen Colbert.
(BEGIN VIDEO CLIP, “THE DAILY SHOW WITH JON STEWART”)
JON STEWART, HOST, “THE DAILY SHOW WITH JON STEWART”: I get those numbers mixed up a lot. Is it 90 percent? Is it 3 percent? Is it 90 percent?
That‘s why I have been buying 90 percent milk.
STEWART: And very hard to pour. You really have to eat it with a fork.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP, “THE COLBERT REPORT”)
STEPHEN COLBERT, HOST, “THE COLBERT REPORT”: But 90 percent certainly feels true—
COLBERT: -- especially since, thanks to Jon Kyl, that number is now in the congressional record.
COLBERT: But I guess feeling true isn‘t good for some people. So, Kyl‘s office silenced his critics by issuing this inspired bit of forward-thinking backpedaling.
T.J. HOLMES, CNN ANCHOR: And you know what? I just want to give it to you verbatim here. It says, “His remark was not intended to be a factual statement.”
COLBERT: It was only meant to be taken as one.
(END VIDEO CLIP)
MATTHEWS: Well, that‘s precisely right.
Senator Kyl wanted to use rhetoric to make a point that wasn‘t true, that Planned Parenthood doesn‘t do important work in women‘s health, all kinds of important work, including birth control, which prevents unintended pregnancies and—let‘s face it—sharply reduces the number of abortions. And it does all those things.
Anyway, up next, let‘s get to the fundamental debate about the president‘s plan vs. Paul Ryan‘s. Let‘s get to the heart of this, the real philosophy behind this. Are we a country that believes the wealthy should keep all their money, or do we believe they owe something back to those society, to those who aren‘t as fortunate? Let‘s debate who we are as a country. That‘s coming up. Couldn‘t be better.
You are watching HARDBALL, only on MSNBC.
MICHELLE CARUSO-CABRERA, CNBC CORRESPONDENT: I‘m Michelle Caruso-Cabrera with your CNBC “Market Wrap.”
Stocks moved slightly higher in choppy trading today. The Dow Jones finished seven points in the green. The S&P 500 tacked on a fraction of a points. The Nasdaq added 16.
Trading was pretty thin and directionless, as investors absorbed the president‘s plan for cutting the deficit. And the Federal Reserve delivered another steady-as-we-go assessment on the economy.
Oil prices reversed a two-day slide on a report showing that crude inventories are up, but gasoline inventories are sharply lower.
J.P. Morgan posted a better-than-expected 67 percent jump in first-quarter profit, but it‘s still setting aside more than $1 billion to cover bad mortgage loans.
Wal-Mart was up for the second day in a row on word that it is trimming its electronics department to make room for hands-on products, like fishing poles and fabrics.
That‘s it from CNBC. We are first in business worldwide—now back to HARDBALL.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This larger debate that we‘re having—this larger debate about the size and the role of government—it has been with us since our founding days.
And during moments of great challenge and change, like the one that we‘re living through now, the debate gets sharper and it gets more vigorous.
As a country that prizes both our individual freedom and our obligations to one another, this is one of the most important debates that we can have.
(END VIDEO CLIP)
MATTHEWS: Welcome back to HARDBALL.
Today, President Obama identified the debate he sees that‘s in the background to every political fight we have been having over the years:
What is the proper role and size of the American government?
Joining us right now is a real expert with a point of view, Steve Moore. He‘s a member of “The Wall Street Journal” editorial board.
Steve, thank you for coming on.
STEPHEN MOORE, SENIOR ECONOMIC WRITER, “THE WALL STREET JOURNAL”:
Great to be with you.
MATTHEWS: And Christian Weller is with the Center for American Progress.
And I hope we can keep this tight. We only have the usual amount of television time.
I want you to look. First of all, I think, Steve, if you look at this, you will have a point of view on it. I want to know what it is and then I want Christian. I think this is very telling the way the president said something today. I‘m not sure I agree with the tone of it, but let‘s listen to it.
Here is the president on the role of the wealthy in financing the costs of government in our society. Let‘s listen.
(BEGIN VIDEO CLIP)
OBAMA: As a country that values fairness, wealthier individuals have traditionally borne a greater share of this burden than the middle class or those less fortunate; everybody pays, but the wealthier have borne a little more.
This is not because we begrudge those who‘ve done well. We rightly celebrate their success.
Instead, it‘s a basic reflection of our belief that those who benefited most from our way of life can afford to give back a little—a little bit more.
(END VIDEO CLIP)
MATTHEWS: The one of that last phrase—and I was caught by it—
“Those who have benefited most from our way of life,” in other words, capitalism or free enterprise, “can afford to give a bit more back.”
Steve, do you notice some attitude now? It wasn‘t just ability to pay, but there‘s some—they deserve to pay more because they benefited from our society, with all its positives and negatives socially.
Your thoughts? Do you agree with what he said? Did you agree with what he said?
MOORE: I partly do. It‘s true that they benefited a lot from our free market capitalism system.
It‘s also true that you and I and millions of workers in this country have benefited from people like Bill Gates and Warren Buffett. But, you know, it comes—here‘s the problem with what Barack Obama said.
They already do pay a lot of taxes. I mean, if you look at—you know these statistics, Chris. I have cited them on your show before. The top 1 percent pay 40 percent of the income tax. The top 10 percent pay 70 percent of the income tax. The bottom 40 percent don‘t pay any—virtually any income tax.
MOORE: It is already a highly progressive system. The way you get more tax revenues, because I agree with you, we need more revenues—the way to do that is to grow the economy.
MOORE: And you don‘t do that by increasing rates.
MATTHEWS: Christian Weller, your thought on that very topic. Should the wealthy pay, even now, a higher percentage of their income? I think the net difference, by the way, is still growing between after-tax income on the very rich and after-tax income on the worker bees out there.
There is still a growing gap, so I‘m not sure they are getting screwed at the top. But your view. Should they pay a higher percentage? If we are going to balance this budget, should they pay the lion‘s share of doing it?
CHRISTIAN WELLER, CENTER FOR AMERICAN PROGRESS: Well, I think we should definitely look at having them paying little bit more, because the choices, if we don‘t have them pay more, we are going to burden them, we‘re going to gut the middle class.
That‘s very clear, if you look at the Paul Ryan budget proposal, what the alternative looks like if we don‘t ask the wealthy to contribute a little bit more to fixing the deficit. It means higher taxes for the middle class. It means gutting health care for the middle class, particularly Medicare, Medicaid, which is a crucial program for middle-class families.
MATTHEWS: I agree with you.
WELLER: And I think that it‘s a choice issue here really, and it‘s a clash of visions that we are seeing.
MOORE: I agree entirely with that. I actually like what Barack Obama said at the beginning of his speech. This is a conflict of visions.
It‘s a question for the American people about whether they want to raise taxes. And, look, Chris, we shouldn‘t—if—if the question—the answer is we should raise taxes, let‘s not pretend we can do this by just taxing rich people. If we are going to have to—if we‘re going to raise the revenues you need to balance this budget, you got to raise taxes on everybody. This is—this is voodoo economics to say only the 1 percent are going to pay off the—
WELLER,: That‘s not what President Obama says. But what Paul Ryan is saying is let‘s raise taxes for the rich.
WELLER: Let‘s raise taxes for the middle class so we can get—
MOORE: He wants to keep the rates were they are. He wants to keep the rates were they are.
MATTHEWS: Two extreme views. Steve and Christian, two extreme views. I know this will bother both of you—one is the right libertarian view is the Ayn Rand view. And I love “The Fountainhead.” I didn‘t like—
MATTHEWS: OK. I know. Well, let‘s watch a scene here from a movie, that they believe that the top guy, the geniuses, the entrepreneurs, the Bill Gates create all the wealth and everybody else gets a job. The Marxists used to argue, all wealth comes from sweat labor, actually going into the factory --
MOORE: You don‘t believe on that.
MATTHEWS: Well, I‘m not arguing—what do think, I‘m on the far left. When did that start?
Let‘s take a look here at “The Fountainhead.” This Gary Cooper, a bit old for the part as Howard Roark, and the great film, “The Fountainhead,” which makes your case—and I‘m sure you‘ve watched this 4,000 times. But here it is, “The Fountainhead.”
(BEGIN VIDEO CLIP)
GARY COOPER, ACTOR: The world is perishing from an orgy of self-sacrificing. I came here to be heard in the name of every man of independence still left in the world. I wanted to state my terms. I do not care to work or live on any others. My terms are a man‘s right to exist for his own sake.
(END VIDEO CLIP)
MATTHEWS: For his own sake, self-reliant cowboys, objectivist philosophy—that‘s where you‘re at. Is that right, Steven Moore?
MOORE: Well, one of my favorite movies. And by the way, “Atlas Shrugged” is out. So, you got to get a scene from that new movie.
MATTHEWS: OK. Let me go to Christian Weller, what do you make of that argument? That the rich shouldn‘t have to pay tax, they should be left alone to be geniuses like Billy Gates?
WELLER: Especially Billy Gates is a good example. I mean, he only has become so rich because he could enter partnerships with the public, with benefit public investments in the Internet, in information technology. I think there is a symbiosis when people become very rich. They can benefit with the infrastructure investment.
MOORE: Chris, the way to balance the budget is to have more rich people. If we create more wealth—look, we got to grow this economy.
WELLER: I don‘t disagree with you. I don‘t disagree with you, Steve. We do need to create more, but we need a strong middle class to accomplish that.
MATTHEWS: But we have to balance the budget, guys. It comes down to practicality. Somebody has got to give the money and as Willie Sutton said, go where the money is.
Steve Moore, Christian Weller—
WELLER: -- tax cuts for the top 2 percent.
MOORE: I love rich people.
MATTHEWS: You are honest. You belong on “The Wall Street Journal” editorial page where you live.
Some breaking news to report right now—this is not good news—baseball‘s all-time home run leader Barry Bonds of the San Francisco Giants has been convicted of obstruction of justice. A jury in San Francisco found Bonds guilty of obstruction, but deadlocked on three other counts, including perjury. The case against Bonds centered around whether he lied to a grand jury when he testified he never knowingly took illegal steroids. This is news.
We‘ll be right back.
MATTHEWS: Well, talked a lot about how Republicans aren‘t thrilled with their presidential candidates, well now, Iowa Senator Chuck Grassley says he is pining for General David Petraeus to get in the race—another Ike, I guess. When asked whether he‘s open to Donald Trump‘s candidacy, Grassley told “The National Review,” “I‘ll listen to anybody, but I wish that General Petraeus would get interested. I have only had one person in Iowa ask me about Donald Trump.” Grassley added that if Petraeus got into the race, he‘d escort him to all 99 of Iowa‘s counties but Petraeus has rejected a presidential run in Shermanesque terms.
We‘ll be right back.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle class Americans. But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can‘t afford it. And I refuse to renew them again.
(END VIDEO CLIP)
MATTHEWS: We are back.
President Obama drew a line in the sand today, as you just heard it, renewing the tax cuts for the rich he will not do. He said he‘s going to defend Medicare in the face of Republicans‘ attempt to radically restructure or demolish, if you will.
For more on the president‘s plans to reduce deficits, let‘s go right now to our strategists: Democratic Steve McMahon and Republican Ed Rollins.
Ed, I guess you‘re skeptical of the president‘s will power here because he said the last time went along with tax cuts for the rich, continuing the Bush tax cuts for people over a quarter a million a year, because he wanted to protect those below a quarter million, he will be faced with the same question, I think, at the end of 2012, and then again the hostage-taking could continue.
Won‘t he be in the same situation?
ED ROLLINS, REPUBLICAN STRATEGIST: Well, he may not be president. He may just have been defeated in December of 2012.
MATTHEWS: Well, he still gets to act in December.
ROLLINS: Yes. But I don‘t think it‘s going to be much if he‘s defeated, I promise you. At the end of the day, there are 23 Democrat senators who are up in that election. Obviously, the dynamics could change dramatically to where Republicans control both. So, I think this is all rhetoric.
And I think, to a certain extent, Joe Biden had it right. He slept through part of the speech today. It was pretty boring.
I have been around as long as you have and I‘ve heard this $3 cut for every $1 in tax increase. And as we used to say—a tax increase is forever, budget cut is to the next supplemental.
MATTHEWS: Well, it seems like a tax cut is forever, because Obama does have that challenge.
Do you think he‘s credible with liberals, saying he will raise the taxes on the rich to help reduce the deficit, or isn‘t he?
STEVE MCMAHON, DEMOCRATIC STRATEGIST: I do think—I do think he‘s credible with liberals, and I think what the liberals like to see is for him to pick a fight on this, because this is one where the public is absolutely in Obama‘s corner. He made an interesting point today about the bottom 90 percent of wage earners in this country actually had their average incomes go down in the last 10 years and for the top 1 percent, they‘ve gone up by an average of $250,000.
Those people are in a position to be able to pay a little bit more. They have benefited from the tax code for a very long time and now, perhaps, it‘s time, at a moment of fiscal crisis, for the country, for them to give a little bit more back.
MATTHEWS: Well, a lot of people read the president‘s speech today as basically a whack at Paul Ryan‘s Republican budget plan. Let‘s listen to the president today talk about that and then also the whole question. Let‘s listen to it.
(BEGIN VIDEO CLIP)
OBAMA: This is a vision that says even though Americans can‘t afford to invest in education at current levels or clean energy, even though we can‘t afford to maintain our commitment on Medicare and Medicaid, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.
They want to give people like me a me a $200,000 tax cut that‘s paid for by asking 33 seniors each to pay $6,000 more in health costs. That‘s not right. And it‘s not going to happen as long as I‘m president.
(END VIDEO CLIP)
MATTHEWS: You know, the big question is when reality is going to bite on this budget deficit. The average person doesn‘t know how the deficit affects them, but they will know if their Medicare is radically changed and no longer do they get automatic payments for pills and everything else and hospital expenses, that they have to go out and shop for a health insurance plan in their 70s and 80s.
When do you think it‘s going to cut? When are the deficits going to matter to average people? I say it‘s when they start losing real benefits. What do you say?
ROLLINS: I think it‘s when they start losing real benefits and also when they start thinking about their kids and their grandkids. And I think that‘s the serious challenge here.
There‘s no easy answers here. If there was an easy answer, the Democrats would have done it, the Republicans would have done.
Everyone of these commitments that have been made whether it‘s Medicare, Medicaid, defense spending, or what-have-you, are all basically end up being to some special interest or to take care of some particular group, which is our military that‘s now in three wars.
At the end of the day, when you start taking those things away, then you basically alienate a voter group. Obviously, for Republicans, you want to reform Medicare, you‘re going to basically affect senior voters who are very important element of our party. The only way you‘re going to get this thing is for everybody to bite the bullet and go work at it together—and that‘s not going to happen in the foreseeable future.
MATTHEWS: Steve McMahon?
MCMAHON: Ed is right that there were no answers. But under the Ryan plan, the only people being asked really to bite the bullet are senior citizens and people who can‘t afford to bite the bullet because they‘ve been biting it for a long time.
And the people who get spared from any sacrifice at all are the wealthy. Paul Ryan wants to extend the Bush tax cuts, the people who have benefited the most—
MATTHEWS: OK. Let me—let‘s go where the tire hit the road, the Reagan Democrats. Ed, you brought them in for Reagan back in 1984. You were the campaign manager of President Reagan. You know what working-class Democrats who vote Republican are like.
We just saw the very close number in Pennsylvania. This next election is probably going to be decided in states like Ohio, Pennsylvania, out there.
My question to you is: are there middle class people who live and decide elections because they switch back and forth, a lot of Catholics tend to switch back and forth—are they going to be moved by a big cut in Medicare or the fact that we don‘t have—that we have higher taxes for the rich? What‘s going to move their vote?
ROLLINS: Well, obviously, you reform Medicare, you take it away from their parents or what-have-you, they‘re going to be very unhappy. Both sides are now arguing you have to do that.
At the end of the day, you know, sure, if you have the votes, you could raise taxes on the rich. I‘m not for it. I‘m not rich, either. But at the end of the day, you can get away with that. Public opinion will support that. Whether that‘s good for the economy and whether that basically affects those blue collar Democrats in places like Pennsylvania and if they‘re not convinced their jobs are going to come back, then that‘s what the indictment is.
MCMAHON: Well, listen—
MATTHEWS: Well, when asked the same question, what‘s better for the middle class? But I mean middle class, $50,000 a year. That person says, look, I‘ve got to pay my bills. I don‘t care if the rich have to pay more taxes. My grandmother or my mother—
MCMAHON: That‘s right.
MATTHEWS: -- needs that Medicare payment because I can‘t pay her hospital bills.
MCMAHON: That‘s right. One of the things that we know about these swing states, particularly states like Ohio and Pennsylvania is seniors there vote, and seniors their pay attention to this—
MATTHEWS: You know why? They don‘t have the money to move to Florida.
MCMAHON: That‘s right. When you start talking about the changes to Medicare and Social Security, which means seniors are going to get less, they‘re concerned. And when you couple that with, you know, we‘re going to ask seniors to get less and we‘re going to let the wealthiest American have more, I think a lot of people think that‘s unfair.
What you‘re seeing right now, I think, is a vision for campaign 2012.
It‘s very different between Republicans and the president.
MATTHEWS: Ed Rollins, Steve McMahon—
ROLLINS: And even if you increase the taxes, which you‘re not going to get, Republicans are not going to go along with that.
MATTHEWS: OK. We‘ve got to go.
ROLLINS: States like Florida are still going to be in play. And unless we get this economy moving again and get some growth, we‘re never going to solve this problem.
MATTHEWS: OK. Thank you. I know we got to get down well below eight.
Thank you, Steve McMahon. Thank you, Ed Rollins, as always.
When we return, “Let Me Finish” with the case President Obama made today, and why we‘re really not the cowboy country we sometimes think we are or are told we are.
You‘re watching HARDBALL on MSNBC.
MATTHEWS: “Let Me Finish” tonight with a topic the president raised today—this question of what we expect of government, what we want it to do. He quoted Abraham Lincoln on the role that the government should do for the people only what we cannot do for ourselves.
We can say we want to live like cowboy, of course. You know line:
keep government out of our business and out of our bedrooms. Live and let live and don‘t bother me with all this government stuff, all these taxes.
But look at the job we‘ve given government to do: we‘ve got the largest military in the world. When the French and the British decide to bomb Gadhafi, they tell us to send in the missiles. We‘re Officer Krupke out on the corner. We‘re the 911 everybody class—and it‘s a free call. We‘re the world‘s military solution and that costs money. You talk about stopping it and someone yells, “You don‘t love America.” We‘ve all heard it.
And yet people expect us to have lower taxes than countries that don‘t even think about having armies like we do. Think Germany. Think Japan. Do you see them out there fighting the world‘s wars? Those countries have had it with wars—and I, for one, am glad they are.
But count the places we‘re fighting in right now: Iraq, Afghanistan, Pakistan—because we‘re sending those drones in to kill terrorists—and last, but not least, Libya.
Then there are the other things—we believe once you hit 65 years of age, you get free medical bills in this country, all paid by the government. All of them.
You can be a Republican, a Democrat. You can be a big government socialist or you can be the farthest-out libertarian since Ayn Rand, and you still get your medical bills paid by the government—and thanks to George W.—your medicine as well.
Yet we live and talk as if we‘re cowboys in a prairie, living in a line shack—not needing nothing from nobody. People talk about the government these days as the enemies—like they‘re making moonshine and they‘re afraid the “revenuers” are coming.
The fact is, the government is coming all the time—to fight the wars people seem to want them fought, to pay the medical bills for people 65 up and up, and all the rest the government does.
We expect the federal government to come running to fix the seawalls whenever there‘s a flood, we expect them there whenever someone yells “emergency.” We expect the government to keep us safe when we get in an airplane or we open a tuna fish can—get there, do the job, regulate.
Yet we talk and think lie cowboys who don‘t need the government.
The time might be now as we try to think about this huge gap between what the government spends and what it can afford, to think about the big gap between what we think about government and how much we‘ve decided to use it, between the way we imagine America working these days and the way it actually works.
Well, that‘s HARDBALL for now. Thanks for being with us.
More politics ahead with Cenk Uygur.
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