updated 7/18/2011 12:17:03 PM ET 2011-07-18T16:17:03

Guest Host: Chuck Todd
Guests: Charlie Cook, Hampton Pearson, Stephanie Gosk, Richard Wolffe, Chris Van Hollen, Susan Page, Michael Shear, Sarah Smith, Jonathan Martin

CHUCK TODD, GUEST HOST: We all know how it‘s going to end.
Let‘s play HARDBALL.

Good evening. I‘m Chuck Todd here at the White House—it‘s a beautiful day, so why not have class outside, right? -- in tonight for Chris Matthews tonight.
Leading off: The adult in the room? That‘s how President Obama is trying to portray himself, the calm daddy trying to discipline the group of unruly children on the other side of Pennsylvania Avenue.
The president again positioned himself as the sensible centrist, insisting the public agrees with him on not just cuts but taxes and that Republicans in Congress are dug in for ideological reasons. Fact is, we all know how it‘s going to end, with the debt ceiling being raised, no real big agreement on spending and taxes. All that‘s left now is about a week of political posturing.
Plus, what would happen politically if no deal was reached and the U.S. does default? Would voters blame the president for a faltering economy, or hold Republicans responsible for refusing to make a deal? The answer to that could determine who wins the 2012 election.
Also, let‘s go to the videotape, Michele Bachmann‘s husband denying that he ever referred to gays as barbarians, despite the tape that indicates differently, referring to gays as barbarians. We have the full, unedited tape on that. And that tops our 2012 coverage tonight.
And the drip, drip, drip of the Rupert Murdoch scandal continues. First Rebekah Brooks, the head of his newspaper operations on the other side of the pond, resigned. Then late this afternoon, we learned the CEO of Dow Jones, which publishes Murdoch‘s “Wall Street Journal” here in America, is stepping down. Can this Murdoch—can Murdoch himself stop the scandal from completely overwhelming his empire?
And finally, Kumar, as in “Harold and Kumar,” is leaving the White House for a recurring role in “How I Met Your Mother.” That‘s in the “Sideshow.”
But we‘re going to start with tonight‘s question, who‘s holding up the agreement? Congressman Chris Van Hollen is a Democrat from Maryland, and he joins me now, who was in on the Biden talks when those were the center of debt ceiling—of the debt ceiling negotiations.
Congressman, let me start with this. We know, I guess, at this point, how this is going to end, some sort of raise in the debt ceiling, some form of cuts, but not the “grand bargain.” Do you feel as if your party is politically in a better position today than it was a week ago, when these talks began?
REP. CHRIS VAN HOLLEN (D), MARYLAND: Well, Chuck, I don‘t know exactly what the end game is going to be. It could play out the way you talked about. It could take another turn. And I‘m not sure exactly where all the dynamics between the House and the Senate are right now.
What I do know is that the president said today that he still held out hope to try and get a grand bargain. Speaker Boehner said the same thing. Of course, in the next breath, Speaker Boehner said that he wasn‘t willing to close any of these corporate tax loopholes, which have been a big obstacle to trying to get a deal done.
So again, I think there‘s a growing consensus something will be pulled together, but I think there‘s a whole lot of—there are lot of hurdles along the way still to go.
TODD: The president in the press conference finally put some details to the speculation on what it is exactly he put on the table when it comes to entitlements. Here‘s what he said about Medicare means testing.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We‘ve said that we are willing to look at all those approaches. I laid out some criteria in terms of what would be acceptable. So for example, I‘ve said very clearly that we should make sure that current beneficiaries, as much as possible, are not affected, but we should look at what can we do in the out years so that over time, some of these programs are more sustainable.
I‘ve said that means testing on Medicare, meaning people like myself, if—you know, I‘m going to be turning 50 in a week, so I‘m starting to think a little bit more about Medicare eligibility.
OBAMA: The—the—yes, I‘m going to get my AARP card soon, and the discounts.
TODD: Congressman, Medicare means testing. President‘s for it. Are you?
VAN HOLLEN: No. But let me say this, Chuck. Medicare—there‘s been a lot of misunderstanding about this because Part B of Medicare, which is your physician reimbursements, and Part D, which is prescription drugs, are already means-tested. In other words, the higher your income, the more co-insurance that you put in.
TODD: Sure.
VAN HOLLEN: That‘s current—that‘s current law. So if what the president is saying is, as part of a big deal, we can look at some of those things, that‘s one thing.
But what happened was that the—you know, the Republicans in the House totally pulled the rug out from under Speaker Boehner when he said, All right, we‘re going to get the president to make some changes, possibly, in Medicare and maybe some other areas, but we‘ve got to close corporate tax loopholes. And his, you know, caucus said, No way.
Now, as of today, if you go to their Web site, their current position is that unless you enact the Republican budget plan that passed the House a little while ago—
TODD: Right. Right.
VAN HOLLEN: -- which ends the Medicare guarantee, slashes Medicaid—unless do you that, we‘re going to allow the United States to default on its debt obligations. So they‘re right back in the corner, no compromise, which is where they started.
TODD: So what you‘re saying is, you would have accepted Medicare means testing as part of a grand bargain if it meant some sort of reform in the tax code that meant the wealthier might be paying more to help pay down the deficit.
VAN HOLLEN: What I‘m saying is, Chuck, in the context of a very large agreement, we were willing to give the president some running room to see what he could negotiate. Without seeing the specifics, I wouldn‘t say today whether I would vote yes or no. I would say that that is—that particular example is a feature of certain portions of Medicare.
I would not agree to that with respect to, you know, Part A, which are the hospital reimbursements, and I‘m not saying I would agree with it with respect to the other things, either.
But the difference between the Republicans and the Democrats is we said, We may not like these things, Mr. President, but at least talk about them, bring them to us.
TODD: Right.
VAN HOLLEN: We will not, from the beginning, say, as the Republicans say, We‘re not going to agree to it because, you know, you guys won‘t close the corporate jet loophole or get rid of—
TODD: Right.
VAN HOLLEN: -- you know, subsidies for oil and gas. That‘s the difference.
TODD: Well, the president also talked about some of the politics I think that we‘re going to see in the next week before an eventual deal. Here‘s what he said.
OBAMA: My expectation is that you‘ll probably see the House vote on a couple of things just to make political statements. But if you‘re trying to get to $2.4 trillion without any revenue, then you are effectively gutting a whole bunch of domestic spending that is going to be too burdensome and is not going to be something that I would support.
TODD: You know, Congressman, it seems as if the eventual deal—
Speaker Boehner today almost dictated (ph) -- and he talked about, Well, look, let‘s get these votes, then we‘ll talk about this plan C, but it‘s going to be some version of a commission, a binding commission about (ph) Congress that Harry Reid‘s pushing for, a trillion in cuts, it looks like, and this idea that the debt ceiling would raised would be—the burden would put on the president. If that‘s the eventual deal in order to raise the debt ceiling, are you going to support that?
VAN HOLLEN: Well, Chuck, again, I‘d be crazy to say in advance without seeing the particular language on this deal, how I was going to vote. We all know that the devil‘s in the details. Let me give you one example. Of the about $1.1 trillion that we were talking about with respect to discretionary spending—
TODD: Yes.
VAN HOLLEN: -- one of the sticking points throughout the Biden talks, and something that continues to be a sticking point, is to create firewalls so that all the cuts don‘t come out of education, out of research, and you know, cures for cancer, that we also say that the Pentagon and some of the security agencies are going to take their fair share of the cuts. And until we know what that what we call firewall is, to make sure that there‘s a fair allocation—
TODD: Right.
VAN HOLLEN: -- of the cuts, it‘s impossible to say, at least speaking for myself, how I would—how I would move forward on that particular proposal.
TODD: All right. Congressman Chris Van Hollen, the ranking Democrat on the House Budget Committee, who‘s been involved in these talks and all the details, thanks for coming on HARDBALL.
VAN HOLLEN: Good to be with you, Chuck.
TODD: OK, well, Susan Page is the Washington bureau chief for America‘s newspaper, “USA Today.” Susan, nice to see you. Sorry you‘re not outside here. It‘s a beautiful day, a wonderful day here—
TODD: -- in Washington. Look, here‘s the president today, about that he—he actually has kind of switched his position. There was a time he wanted a clean debt ceiling vote, and now he‘s saying, hey, he wants more than that. Here‘s what he said.
OBAMA: You know, I‘m glad that congressional leaders don‘t want to default, but I think the American people expect more than that. They expect that we actually try to solve this problem, we get our fiscal house in order. And so during the course of these discussions with congressional leaders, what I‘ve tried to emphasize is we have a unique opportunity to do something big. We have a chance to stabilize America‘s finances for a decade, for 15 years or 20 years, if we‘re willing to seize the moment.
TODD: You know, Susan, it was an odd press conference in this respect. I know we‘re not done, but it feels like we‘re done.
PAGE: Well, it feels like, to me, that President Obama now feels
pretty confident he‘s got the upper hand and that Republicans need to
figure out exactly where they‘re going to be, but that he knows where he is
and he‘s pretty sure the Republicans are divided. And he‘s portraying
himself as it‘s him and the American people outside the Beltway, and
Washington is now defined kind of as the Republicans trying to figure out -
you know, trying do the old things, not really solve the problems—

TODD: Right.
PAGE: -- rely on commissions down the road and that sort of thing, which is a—which is a neat trick for a president to do because nobody defines Washington more than the president of the United States.
So you did feel—I did feel like he was sort of confident and kind of projecting that he was in control and in command of this kind of messy situation we‘ve got.
TODD: You know, it was interesting, is that actions speak louder than words. In watching the Republicans, watching Mitch McConnell basically do legislative gymnastics to come up with an escape hatch, is an acknowledgement that politically, they were losing—
PAGE: Oh, yes.
TODD: -- and they knew it and Mitch McConnell was throwing himself in front of a bullet, essentially, for Speaker Boehner. This political win for the president, though—it seems short term. Can he somehow—does he build on it in any way, or is the air out of the balloon a little bit because, ultimately, he couldn‘t get Washington to come together, he couldn‘t bring this together? You know, and some are arguing, you know, where was he the last six months, rather than the last six weeks?
PAGE: Right. And he does need to have a deal happen. I mean, he definitely loses if for some reason, this doesn‘t come together in some fashion and time because his political career is staked on this economy doing a little better. And the White House has been warning us right and left that if the debt ceiling gets close and not raised in time, that that fragile recovery is going to have the pins kicked out from beneath it.
So he needs that. And I think one reason he‘s no longer saying he wants a clean debt ceiling is we know from our polling that Americans are more concerned about spending than they are about failing to raise the debt ceiling. So he needs to be on that side of things. He needs to be saying, I had to spend a lot of money because of the economic crisis when I took over, but I‘m trying to take steps now to deal with it.
TODD: You know, it was interesting. He had a message to progressives, as well. He said, you know, We can‘t have the conversation be on the—he was making the case that you want a big deal and you want to try to do this, even after the debt ceiling, because if we‘re always—if the debt is an excuse not to do something, then you can‘t do an investment in a new education program or you can‘t do a special investment in a new infrastructure project. Is that going to resonate?
PAGE: Well, I think he‘ll have some problems with liberal Democrats, who are not going to be happy with changes in Social Security and Medicare, who will want higher taxes for the wealthy to be a big part of this. That‘s not at all clear that we‘re going to have any of that kind of tax—any of those tax steps in this final deal, depending on how big it is. So I think there will be some unhappiness on this.
On the other hand, Democrats are likely to follow the president. You know, we find that even the most liberal Democrats still support the president, want him to be reelected.
TODD: Right.
PAGE: He‘s not getting challenged in primaries. So he‘s I think still in a pretty relatively strong position there.
TODD: Yes, it‘s a big difference. The progressive elite may think one thing, but when you look at the rank and file and you look at these polls, they‘re with him. All right, Susan Page, bureau chief for America‘s newspaper, “USA Today”—
TODD: -- thank you.
PAGE: Thanks, Chuck.
TODD: All right, coming up: What happens politically if Republicans and Democrats they don‘t reach a deal and the U.S. does somehow go into default? Look, the deals not done-done. Will voters blame the president for the economic consequences, the Republicans for not making the deal, all of Washington?
You‘re watching HARDBALL, only on MSNBC.
TODD: Well, in Minnesota, we have one deal done. State government is set to reopen after those folks reached a deal to end the longest state government shutdown in a decade. And in many yes, what‘s happening in Minnesota looks a lot like what‘s happening here in Washington.
The Democratic governor, Mark Dayton, was pushing for tax increases on the rich, while Republicans wanted deep spending cuts. The deal came after Governor Dayton abandoned his push for tax hikes and Republicans gave up on some of their proposed social government cuts. But even though the standoff is over, the deal is just a temporary fix that glosses over the state‘s bigger budget problems. We‘ll see if Washington can avoid also kicking the can down the road. We shall see.
We‘ll be right back.
TODD: Welcome back to HARDBALL. It‘s clear that if no deal is reached and the U.S. defaults, the results for the American economy are catastrophic. So what would the political impact be if no deal was reached? Who will Americans hold responsible, and what does it mean for the 2012 election?
Charlie Cook is an MSNBC and NBC News political analyst and editor of “The Cook Political Report,” and Michael Shear covers politics for the old “grey lady,” “The New York Times.” My apologies to “The New York Times” for referring to “USA Today” as “America‘s newspaper,” but hey, you get one thing, you get the other.
TODD: Charlie Cook, let me start with you. Your column today—you basically pinpointed Republicans as political losers on this, even regardless of whether a deal is reached. Explain.
CHARLIE COOK, MSNBC POLITICAL ANALYST: I think Republicans right now
I mean, I sort of started off talking about the punch line, the old joke, What‘s mine‘s mine, what‘s yours is negotiable. And what‘s happening is that we don‘t know whether President Obama could have made stick with Democrats on Capitol Hill, you know, entitlement cuts, domestic spending cuts. We don‘t know whether they‘d have been willing to compromise and sort of do the right thing or not.

But the thing is, Republicans are coming across right now as so inflexible, so doctrinaire, playing to their base as opposed to independent voters, that I think they‘re losing this fight and—because I think this is a fight for independents because there‘s -- 90, 95 percent of the people in each party vote for candidates of its party, and the thing is, turnout does not vary that much from year to year. It‘s about independents, and what Republicans are doing is playing a losing hand, I think, towards independent voters.
TODD: And Michael Shear, the president seems to believe that. He almost cloaked himself today in polling numbers. Here‘s what he said, for instance, about the fact that a grand bargain—that the American public was already for it and he almost didn‘t understand why Republicans weren‘t. Watch.
OBAMA: The notion that somehow the American people aren‘t sold is not the problem. The problem is members of Congress are dug in ideologically. You know, so this is not a matter of the American people knowing what the right thing to do is. This is a matter of Congress doing the right thing and reflecting the will of the American people.
TODD: Michael Shear, there is a political reality here, though, for Speaker Boehner, for a lot of these Republicans, in that they‘d get primaried and they would lose if they cut sort of a grand bargain.
MICHAEL SHEAR, “NEW YORK TIMES”: Right. Right. They‘re sort of stuck. And I agree with Charlie. They sort of positioned themselves in a way that they probably re looking at more of the blame as this thing goes forward. The president is—was clearly today looking beyond—beyond the next couple of weeks and looking to 2012 and trying to start that conversation about who has—you know, who is responsible.
But I will say this. I think the original question you asked, which is, what if no deal would be reached and we were to go into some sort of default? I think perhaps the Republicans still get blamed initially, but, ultimately, if the secretary of the treasury is right and the calamity happens that he suggests would—
TODD: Right.
SHEAR: -- I don‘t see how anybody, any politician in office escapes the blame, and especially the president, who, you know, would be the one presiding over the country at a time of, say, 10 percent, 11 percent unemployment—
TODD: Right.
SHEAR: -- if all of these terrible things happen, and that‘s got to be bad for him.
TODD: You know, Charlie Cook, we know that the American public has a
short attention span sometimes, but they have been angry for three or four
three straight elections. They have thrown out Republicans, fired them in ‘06, fired again in ‘08. Then the public was mad at the Democrats, fired them from control of Congress.

If Washington‘s not working right now, at what point does the public throw up their hands, fire both of them and look a third way? I mean, not since Perot ‘92 has there been a vacuum, it seems, that somebody from the outside could fill, and yet there‘s no obvious outsider.
COOK: Well, I think in presidential elections, it‘s hard enough to find a viable, credible third-party, independent candidate, but, you know, in congressional elections, it‘s pretty binary.
I mean, it virtually never happens. And I don‘t think it‘s a legitimate possibility, you know.
TODD: But then where does the angry turn I guess is my question.
COOK: I think they start throwing out—I think they‘re going to start throwing out incumbents in both parties.
I think that you can see, if you‘re—they‘re angry and they throw out Republicans in two elections, Democrats in the next election, and if things seem just as dysfunctional or more so, I think they just start throwing a bunch of bodies out of windows and some of them wear red jerseys and some wear blue, but it‘s people that weren‘t seen as responsive.
I think that‘s a more likely scenario than anything else, but I don‘t
you know, I think these guys are on very, very thin ice here, because I think people look at Washington, they see it as dysfunctional and they throw the in party out. And right now, in the House of Representatives, the in party is Republicans.

TODD: And, Michael Shear, Mitch McConnell, who, as one person said to me, is the—and this was a fellow Republican—said, he‘s the ultimate tactician, always thinking in tactics—said on a radio show that if there is default, that the president will blame the Republicans and that there will be some merit to it when the economy tanks.
Mitch McConnell‘s almost as much worried about his own chances to be Senate majority leader as anything else?
SHEAR: Well, I think so, and I think—and I think part of what he was recognizing was the fact that, you know, the Republicans backed themselves in over a period of not just the last couple of weeks, but the last several months, with a whole range of their members saying they will never vote to increase the debt ceiling.
And I think he was recognizing that the Democrats by contrast have repeatedly been saying, of course we will raise the debt ceiling and then we will move on to these other subjects separately. And so it really is a bad hand to play, if you‘re staring down the possibility of economic calamity, to be the ones who have said, yes, that‘s OK.
TODD: You know, Charlie, whatever deal happens, it‘s going to be a
little convoluted, it‘s not going to be big. The markets are going to be
like, OK, fine, at least you didn‘t default, but they‘re not going to be
ecstatic about the deficit reduction either and the economy might just be -
keep clunking along.

At what point do voters also say, hey, where‘s all this focus on jobs that at first Republicans were promising, then Democrats? And instead it‘s all been debt talk.
COOK: Well, I think—I don‘t think that—voters want to see the economy turn around and I think they have lost faith in government and government‘s ability to turn an economy to create jobs.
And so I think that‘s kind of off the table. It‘s just no longer a rational incentive for voters, because I just don‘t think they think these people have a whole lot to do with creating jobs.
SHEAR: Although, Chuck, let me just—let me just say, Chuck, that I think that that was one of the things that appealed to the president about the grand bargain --
COOK: Sure.
SHEAR: -- the idea that if—if the markets and everybody else in this town were surprised that they had managed to come up with this massive plan—
TODD: You would over perform, yes.
SHEAR: Over perform, right, that that might kick-start the economy in a way that nothing else that he can do would.
TODD: And, Charlie—and, Michael, you—you want to finish that thought?
SHEAR: No, no. I think that‘s what appealed to him about that idea of the grand bargain, is that that might have done things that he couldn‘t have done otherwise.
TODD: Right. Right.
Well, I‘m going to have to leave it there.
Michael Shear, Charlie Cook, as always, thank you both.
Up next: the actor who famously played Kumar, as in “Harold & Kumar,” is leaving the White House for a role on “How I Met Your Mother.” That‘s ahead in the “Sideshow.”
You‘re watching HARDBALL, only on MSNBC.
TODD: All right. Back to HARDBALL and the reason why I love subbing, because it‘s time for the “Sideshow.”
First up, it‘s not just the debt ceiling negotiations sparking intense partisan politics in Congress this week. Yesterday marked the 50th annual Congressional Baseball Game at Nationals Park, the final score, 8-2, Democrats over the Republicans.
But the Democrats had a bit of a ringer, freshman Representative Cedric Richmond Louisiana, who also happens to be a former college baseball pitcher. He struck out 13, carried a no-hitter into the sixth inning. And even though they didn‘t play in the game, Eric Cantor and Nancy Pelosi did stop by to cheer on their teams. By the way, Cedric also knocked in a bunch of runs.
Members of Congress aren‘t the only ones taking a break from politics, by the way. Kal Penn, an associate director in the Office of Public Engagement at the White House, will be leaving his post to pursue his alternate career as an actor. Think you haven‘t heard of Kal Penn, well, remember. You will recognize him now? That‘s right.
Penn is best known for his roles in the “Harold & Kumar” movies, took a break from acting to pursue a career in politics back in 2009 to work for the Obama administration. This time, Penn is heading out for a recurring role on the hit series “How I Met Your Mother” starring Neil Patrick Harris. Neil Patrick Harris, by the way, got his career restarted thanks to Kal Penn and those “Harold & Kumar” movies, so one helping the other.
All right, next up, the crew on the space shuttle Atlantis and the International Space Station got a VIP call from the president this afternoon. But before turning to serious matters, the president could not hold back from having a little fun with the crew members. Let‘s listen.
UNIDENTIFIED MALE: Hello, this is the International Space Station.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, this is President Obama. Who am I talking to?
UNIDENTIFIED MALE: Hello, Mr. President. You‘re talking to the Increment 28 crew and the crew of the space shuttle Atlantis.
OBAMA: Oh, that‘s funny, see, because I was just dialing out for pizza. And I didn‘t expect to end up in space.
TODD: Well, the old pizza joke. Why not? Well, the president then thanked both crews for their hard work and dedication to the mission, both the International Space Station and, of course, the shuttle crew.
All right, up next: turmoil for Rupert Murdoch, as two major executives of his media empire stepped down today in the wake of that hacking scandal. Will the resignations be enough to save the Murdoch empire and save him from facing too much scrutiny both in the British Parliament and here in the United States?
You‘re watching HARDBALL, only on MSNBC.
HAMPTON PEARSON, CNBC CORRESPONDENT: I‘m Hampton Pearson with your CNBC “Market Wrap.”
Stocks ending higher today, but lower for the week, the Dow Jones industrial climbing 42 points, the S&P 500 adding seven, the Nasdaq surging 27 points.
Pretty hefty losses for all the major indices this week, as Europe and the U.S. wrestle with some daunting debt issues. Banks slipped after investors found some details they didn‘t like in Citigroup‘s better-than-expected earnings. And S&P warned American financial firms that the downgrade of the U.S. credit rating could mean downgrades for them as well.
Google shares soared on last night‘s outstanding earnings report. Natural gas firms advanced on word BHP Billiton is buying Petrohawk Energy for $12.1 billion.
And news breaking just after the closing bell, Dow Jones CEO Les Hinton has resigned, the latest executive casualty in the News Corp. phone hacking and bribery scandal.
That‘s it from CNBC, first in business worldwide—now back to
UNIDENTIFIED MALE: There‘s been a lot of controversy around one key manager at News International, Rebekah Brooks. Should she stay?
PRINCE ALWALEED BIN TALAL, SAUDI ARABIA: The indications are for her involvement in this matter is explicit. For sure she has to go. You bet she has to go.
TODD: Ah, the sunglassed-billionaire from Saudi Arabia.
Back to HARDBALL. Welcome back.
That was Saudi billionaire Prince Alwaleed bin Talal, who is the second biggest shareholder in News Corp. And he called for the resignation Rebekah Brooks last night. And guess what? Late today, that happened. And then late today, another News Corp. executive, “Wall Street Journal” publisher Les Hinton, he resigned.
This all comes as Rupert Murdoch met with the family of the murdered teenager whose phone was hacked by those “News of the World” folks earlier this afternoon.
Now, joining me now to talk about all the latest in this News Corp. problem are NBC News correspondent Stephanie Gosk. She‘s in London and covering this for us. And ITN‘s Washington correspondent Sarah Smith.
Stephanie, let me start with you.
Two executives in one day. Tell us a little bit about Les Hinton.
STEPHANIE GOSK, NBC CORRESPONDENT: Well, Les Hinton is probably stepping down for the time he served here, between 1995 and 2000, as the head of News International.
Rebekah Brooks, current head of News International, also resigned today. She served under Hinton when phone hacking and bribes to police are alleged to have taken place. The worst case, the one that triggered this crisis, is the case you just mentioned of that teenage girl whose phone was hacked after she disappeared. It turned out that she had been—that she had been murdered.
That prompted Rupert Murdoch to meet with the family today and apologize for the behavior of one of his newspapers.
TODD: Well, as we know, money talks. Here‘s Prince Alwaleed talking about his confidence when it comes to News Corporation now that these moves have been made. Take a listen.
BIN TALAL: What I say to Mr. Rupert Murdoch and James Murdoch, who are my friends, who are my allies in News Corp. and then my company in Saudi Arabia, Rotana, I said to them that you have to cooperate fully.
And they are going to fully cooperate with the commission that has been appointed by the prime minister to dig deep and get the truth out. They know exactly my high ethics when it comes to business. And, frankly, speaking from my dealings with them, I have noticed nothing but high ethics in the past 20 years.
TODD: Sarah Smith, that‘s a classic case of money talks, and it seems Rupert Murdoch is listening.
SARAH SMITH, ITN REPORTER: Well, he has to listen to these shareholders. I have talked to some of them in America who are deeply unhappy about what is going on and say they would be very happy to see Murdoch sell all of this British newspapers, because they‘re frankly more trouble than they‘re worth. They don‘t make a huge amount of money for the company, but they are causing all kinds of problems.
And there are rumors in London that Murdoch has been looking for a buyer for the three titles he still has there, but nobody wants to pick them up at the moment. And the British investors are still furious about this. It‘s very rare to see shareholders talking openly to journalists about these kind of things. There are people are going on camera. There are a lot of people talking on the phone saying they‘re still not happy with what‘s going on at the corporation.
TODD: Right.
SMITH: And several of them want to see James Murdoch stand down.
TODD: Well, look, Rupert Murdoch is going to run a full-page apology in all of Britain‘s national papers tomorrow.
Here‘s what it says. It‘s going to say—quote—“We are deeply sorry for the hurt suffered by the individuals affected. We regret not acting faster to sort things out. I realize that simply apologizing is not enough,” signed “Rupert Murdoch.”
Stephanie Gosk, explain why this is such chaos in London. I mean, I have had some people explain it, look, this is a—explain it for an American audience, that London, it‘s a very small clique, this newspaper world in many ways, and that‘s why it‘s having such a large effect, because the elites are so angry.
GOSK: Well, it is a small clique. And you also have to remember that a lot of people read these papers.
“News of the World” was one of the most popular tabloids, and when it closed, it came out of nowhere. Now, people here rely on that paper. It has a history. But there‘s real anger here, not just amongst the public that reads the paper, but also amongst politicians, who conveniently have been able to separate themselves from Murdoch and his empire in the last week-and-a-half or so.
And what you‘re seeing now is a reaction by News Corp. to that anger, finally. One of the things that they say in this apology is, they apologize for taking so long to react. And today you see a day of contrition and apologies, but a lot of people are asking if it‘s come a little too late—Chuck.
TODD: And, Sarah, obviously, they‘re—everybody on this side of the pond is wondering, is this going to touch—is it going to touch “The New York Post”? Is it going to touch “The Wall Street Journal”? Is it going to touch FOX News?
In the case of “The Wall Street journal,” we saw that it touched it a little bit today, but that‘s because of what happened overseas. How concerned is News Corp. that U.S. investigations are going to find something?
SMITH: Well, it touched “The Wall Street Journal” a lot today. They lost their publisher. And this has huge implications for News Corp. in the U.S. Firstly, you‘ve got Rupert Murdoch, a hugely powerful figure in Britain, a very influential figure in America, deeply humiliated by this. He‘s the public face of News Corp. and he‘s a man whose brand is now toxic.
Can you imagine when Rupert Murdoch has ever said sorry to anybody in the last 50 years and now is having to write a letter in everybody‘s newspaper apologizing and apologize in person to the Dyler (ph) family, the parents of that murdered teenager? This is utterly humiliating for him.
He didn‘t want to lose these executives. It looks like he‘s losing control of the company. And then, of course, there are these rumors that there‘s a possibility that the victims of 9/11 might have had their phones hacked, as well. If any evidence is turned up for that—
TODD: Right.
SMITH: -- that will be hugely poisonous for the company here. No one‘s got any evidence that “New York Post” journalists were doing this, but people are looking for it. And if that was ever found, that would be very damaging.
TODD: And Stephanie Gosk, do we expect to see Rupert Murdoch come over to America and sort of do these same apologies?
GOSK: You could see Rupert Murdoch taking questions from Congress.
But first, his biggest problems, Chuck, are really still here in the U.K.
TODD: Right.
GOSK: He has agreed to show up in front of Parliament on Tuesday, along with his son, James, along with and Rebekah Brooks, now showing up with her former employers to face questions from angry members of Parliament.
They have already said that they won‘t address questions that in any way jeopardize the ongoing investigation by Scotland Yard. But what they are going to face is that public anger, and these questions are going to come at them. And whether they answer them or not, it is going to be a bit of a circus and a venting and a humiliation, to some degree, as they sit there and have to face these issues.
TODD: All right, Stephanie Gosk of NBC News in our London bureau and Sarah Smith from ITN, our British partner. Thanks very much.
All right, up next, let‘s get back to the 2012 presidential race and the statement from Michele Bachmann‘s husband that his clinics are not run and are not trying to be anti-gay. Is the Bachmann campaign more worried about this issue than perhaps they let on at first?
This is HARDBALL, only on MSNBC.
TODD: California has become the first state in the country that will teach gay history in public schools. Governor Jerry Brown—he signed a bill into law that would require schools to teach about the contributions made by gay, lesbian and bisexual and transgender Americans and Californians. Governor said history should be honest, and supporters say the new law will help curb the bullying of gay students. Critics say it tramples on the rights of parents who don‘t want their kids exposed to such lessons.
We‘ll be right back.
TODD: Well, with front-runner status, at least in Iowa, comes extra scrutiny. And Michele Bachmann husband—Michele Bachmann‘s husband, Marcus, has been under scrutiny recently for the practices at his Christian counseling clinic and a radio interview that he gave last year where he referred to gays as “barbarians.”
So for more on this and other 2012 politics, let‘s bring in MSNBC political analyst Richard Wolffe and Jonathan Martin, a senior political reporter for Politico, the man who is all over the 2012 campaign.
So Richard Wolffe, I want to start with this. On this issue of the “barbarian” comment, Marcus Bachmann actually today—he tells “The Minneapolis Star-Tribune” that he believes that radio interview was doctored.
He told the paper, quote, “I was talking in reference to children, nothing, nothing to do with homosexuality. That‘s not my mindset. That‘s not my belief system. That‘s not the way I would talk.”
We‘ll play—we‘ve got the whole unedited version of that radio interview. And the blogger who posted it denies that it was somehow doctored. Here‘s the full context.
UNIDENTIFIED FEMALE: What do you say when your teenager says she‘s gay? What do you say to Christian parents who come up with this?
MARCUS BACHMANN, HUSBAND OF REP. MICHELE BACHMANN: Well, I think you clearly say, what—what is the understanding of God‘s word on homosexuality. And I think that this is no mystery that a child or pre-adolescents, particularly adolescents, will question and wonder about sexuality. That‘s nothing new under the sun since the beginning of time.
BACHMANN: But we—I don‘t think we should take that as because we wonder or we think or we question, does that take us down the road of homosexuality?
UNIDENTIFIED FEMALE: Would you add the word experiment to that?
BACHMANN: Well, certainly. There‘s that—there‘s that curiosity. But again, we—we—like, you know, it is as if we have to understand barbarians need to be educated. They need to be disciplined. And just because someone feels it or thinks it doesn‘t mean that we‘re supposed to go down that road. That‘s what‘s called the sinful nature. And we have a responsibility as parents and as authority figures not to encourage such thoughts and feelings to move into the action step.
TODD: Richard Wolffe, clearly, the Bachmann campaign is concerned enough about the perception of this—of this radio interview that was making the rounds that they put Marcus Bachmann out there to have this interview with “The Star-Tribune.”
RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Yes, well, who knew that someone with the name Bachmann would be in the Romney situation of trying to deny the undeniable? I mean, you can‘t make such an emphatic statement as in “nothing, nothing I said has anything to do with homosexuality,” and then have the tape out there. It looks bad. It sounds bad.
And I‘m afraid it opens up what is a bigger problem not just for the Bachmanns but maybe for us and political spouses everywhere, which is what is the right role for someone, male or female, when their spouse is running for president? And I don‘t think Bachmann has found the right position, and we found that—
TODD: Right.
WOLFFE: -- President Clinton didn‘t have the right position last time around. There‘s a—there‘s a partner of a candidate situation going on here, as well.
TODD: But Jonathan Martin, I thought—I think it‘s—you do it—you saw what Marcus Bachmann did, doing that interview, trying to—trying to—
TODD: -- essentially fix this. And then there was word today that came out that they decided—that they quit their church after they found out about some practices that they thought wouldn‘t go over well, I guess, with middle America. Is that—they‘re clearly concerned that they‘re going to be marginalized.
MARTIN: Yes. It‘s interesting, Chuck, for somebody who is an unapologetic sort of anti-establishment candidate, she is taking some steps here to write (ph) the campaign and to, I think, avoid some tough coverage. So I think it is an interesting bow to the sort of mainstream demands of a national campaign.
TODD: Right.
MARTIN: But Chuck, what‘s so interesting about Bachmann is that she‘s someone who has made her name on the culture wars—
TODD: Right.
MARTIN: -- as a Minnesota state senator and then certainly when she came to Congress in ‘06. But she‘s a savvy enough player to in the last four years have recognized that fiscal issues that have saliency now—
TODD: Right.
MARTIN: -- and that are paramount—and she‘s now become this sort of reminted Tea Party candidate. And that‘s why she‘s getting traction, I think, in this campaign. But she‘s got these roots in the cultural conservative movement—
TODD: Right.
MARTIN: -- wing of the party that are now being talked about and brought (ph) about that she‘s trying to navigate.
TODD: Well, Richard Wolffe, I had someone say to me, Well, what part of this is gotcha? This is her belief. She doesn‘t believe you are born gay.
WOLFFE: Right, unless you‘re trying to backtrack from making that statement, in which case, is the backtracking sincere or was the first statement insincere? Was the church membership tied to the start of the campaign or not? Anything that makes her less authentic, less driven by principle—
TODD: Right.
WOLFFE: -- fundamentally weakens her brand as being the truth-teller

TODD: Yes, straight talk.
WOLFFE: -- unconventional outsider, that‘s a problem.
TODD: All right, Richard Wolffe, Jonathan Martin, stick around. After the break: We had a fun little nugget in the Newt Gingrich FEC report. Wait until you get a load of where all his money has gone. You will have to stay tuned and wait until after the break.
You‘re watching HARDBALL, only on MSNBC.
TODD: We are back with Jonathan Martin and Richard Wolffe. Let‘s talk about Newt Gingrich‘s—well, what‘s left of his campaign. Today that dreaded FEC report shows that he is more than a million dollars in debt. And ready for this? Almost half of that money is owed to a company called Moby Dick Airways (ph), a chartered flight company.
Jonathan Martin, it‘s nearly—it was over $400,000 in bills that he hasn‘t paid—
MARTIN: Right.
TODD: -- to a private plane company. Hello?
MARTIN: I will avoid the Captain Ahab temptation here.
TODD: I know!
MARTIN: This is why the speaker is now I think flying more commercial flights and trying—
TODD: Yes, he is.
MARTIN: -- to scale back some of the expenses. But it‘s hard for him to blame Washington elites or greedy consultants on his campaign meltdown when half of his debt is because he was trying to fly charter flights around the country instead of taking good, old Southwest or any of the other carriers. So this is a problem for him.
But Chuck, you raise an important question here. You know, the speaker, I think, is doing a lot of TV hits, a lot of radio hits.
TODD: Right.
MARTIN: He‘s going to parades and rotary-type events that are already set up. If he can keep going to these debates this summer and this fall, how much can he sort of live on? How much debt can he take on? Can he get some of the other third party entities—
TODD: Right.
MARTIN: -- to pay for his travel and expenses? I mean, I‘m not sure he‘s playing by the conventional rules of a Pawlenty or even a Santorum, Chuck, if you don‘t do well at Ames and you have to sort of drop out because your money stops flowing.
TODD: And Richard Wolffe, you know, at some point, you know, that debt is a real burden. It‘s kind of an—it‘s more than kind of embarrassing. You know, Hillary Clinton is still paying off debt. John Glenn is still paying off debt.
TODD: Richard, when does Newt say, you know, I don‘t want this responsibility for a decade paying down this debt?
WOLFFE: Yes, this is not a revolving line of credit at Tiffany‘s.
You know, this is actually quite real—
TODD: -- I didn‘t have to do either.
WOLFFE: You know, this is one of those moments, by the way, it‘s when the color (ph) Gods (ph) bestow their gifts upon writers because I remember in 2004, when John Kerry‘s plane pulled up and there was a stair that lined up from Million Air (ph). You know, it just—it‘s just a perfect moment for him to make the argument for fiscal responsibility at a time when we haven‘t had a first primary and he‘s already way in debt.
It‘s a tough argument for him. And generally, what happens is when they lose the first round, first primary, first caucus, the couple of people who are bankrolling him say, Sorry, we‘re out of money.
TODD: You know, Jonathan Martin, there was another FEC report that, to me—I was—I knew Rick Santorum wasn‘t going to raise a lot of money.
TODD: I didn‘t realize he was going to raise this little bit of money.
TODD: It‘s about a half a million bucks. Look, Santorum has tried to do it the conventional way—
MARTIN: Right.
TODD: -- show up to Iowa. He‘s done everything you‘re supposed to do.
TODD: It‘s not catching on. He strikes me as somebody that‘s going to be more pragmatic than a Newt Gingrich.
MARTIN: I think that‘s right, Chuck, because I think he has been on the ground more than any other candidate in Iowa over the last two years. And I think the straw poll for him could be make or break.
Look, he has seven children. I don‘t think he wants to take on hundreds of thousands of dollars in debt. And I think if Senator Santorum is not able to catch on here at some point in the next few months, the financial imperative will force his hand. But Chuck, I was surprised, too. This is somebody who raised what, $20-something million—
MARTIN: Yes, had a great national list, a conservative movement figure who‘s well known in those circles. And he can‘t even raise a million bucks?
TODD: Yes, no, to me, it was a little stunning. Richard Wolffe, very quickly, Rick Perry—are you sensing that he really is getting in or not?
WOLFFE: Well, it certainly looks that way. And there is that slot for Perry or Palin, for a populist to come in here, leave the Santorums—
TODD: Right.
WOLFFE: -- of this race behind. I think it‘s inevitable.
TODD: All right. Jonathan Martin, Richard Wolffe, I got to leave it right there. Thank you both.
That‘s HARDBALL for now. Thanks for being with us. More politics ahead with the Reverend Al Sharpton.

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