updated 12/4/2012 11:33:11 AM ET 2012-12-04T16:33:11

December 3, 2012

Guests: John Feehery, Jonathan Chait, Bob Shrum>

CHRIS MATTHEWS, HOST: Obama to Boehner, Get serious.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

"Let Me Start" tonight with this. So the Republicans have their plan,
and it`s great news for the rich. Speaker John Boehner just put it out.
Those at the top, the 2 percent, are safe. Your Bush tax cuts are going
keep on giving.

One problem, Mr. Boehner. You lost. That was your position before
the election, and you lost. Mitt Romney campaigned on keeping the tax cuts
for the wealthy, and he lost. And he promised to do what John Boehner is
doing right now, and he lost.

How about some respect for the electorate? How about seeing what the
2012 presidential debate was about? Obama championed tax fairness and won.
Republicans championed protecting that 2 percent, ignoring the 47 percent
that he talked about, and they lost.

Today Boehner said he`s willing to raise revenues by the same amount
he agreed to back in August of 2011, the last time they had this fight.
Again, he`s willing to act like the election never happened. No wonder,
again, he lost.

Joining me right now is Joy Reid of TheGrio and Howard Fineman of the
HuffingtonPost. Both are MSNBC political analysts. Joy, you`re chuckling
because it is weirdly true. It`s almost like "Groundhog Day." This guy,
Boehner -- he`s not a bad guy, but he`s operating on a bad thought here.
The election didn`t happen.

amazing watching John Boehner reach for anything, Simpson-Bowles, which, by
the way, assumed that the tax cuts for the top 2 percent would be gone, but
he forgets about that. And Boehner is trying to offer the same exact
policies that Mitt Romney ran and lost on, that the Republicans tried to
negotiate with the White House last -- it is incredible.

And the only way I can explain this, the only way I can possibly
figure it is that maybe Boehner feels like he has to protect his caucus to
the end, look like he fought until the last dog died for those two 2
percent rates because then when he caves at the end, which he`s going to
have to do, he can at least say he tried.

MATTHEWS: Right. By the way, the White House has rejected his latest
offer, which is basically where he was in August of 2011. By the way,
here`s the details of what Boehner put forward, for what it`s worth. It
would consist of $2.2 trillion in net savings over a decade. It would
include, as I said, $800 billion worth of revenue from changing the tax
code, but not by raising rates.

By the way, that`s the same figure that they both agreed on back in
August of 2011 during the last debt fight. Another $1.2 trillion in the
plan would come from other programs, including Medicare and Medicaid, as
well as discretionary spending. That`s appropriations.

Republicans would also make changes to the Consumer Price Index. Now
they`re monkeying with that CPI this time. They would reduce Medicare and
Social Security benefits, which they say would save another $200 billion.
That`ll be interesting to fiddle with that one.

Later this afternoon, the White House rejected the Boehner offer,
saying in part, quote, "The Republican letter released today does not meet
the test of balance. In fact, it actually promises to lower rates for the
wealthy" -- do you believe it? -- "and sticks the middle class with the
bill. Their plan includes nothing new and provides to details on which
deductions they would eliminate, which loopholes they will close, or which
Medicare savings they would achieve."

Howard, it`s a rich melon (ph) for you to reach into and bite in to.
You know this stuff so well. Do they seriously propose, at this point in
our political history, after this resounding election, a clear election
with a result and a winner and a loser -- Romney`s off in La Jolla
somewhere, riding roller-coasters -- that they would come out and say, Not
only are we going to protect the top 2 percent, but we`re going to give a
tax cut?

Yes, that`s their idea of tax reform. That`s what tax reform is all about.

MATTHEWS: It`s ludicrous!

FINEMAN: It`s both a bargaining position -- and I think Joy might be
right about what Boehner is up to here. But it`s also what they believe,
and it`s also what they are clinging to. You know how the president was
once criticized for talking about people clinging to their guns and their

MATTHEWS: Rightfully so, actually.

FINEMAN: Yes. Yes. OK. These people are clinging to this idea
because it`s all that`s left. It`s the only thing that they have that they
can identify with as a core Republican belief, that they`re -- it`s a
matter of faith that they`re clinging to. And the White House is saying
the numbers will not add up in any other way unless you change the top
rates. You have to change the top rates.

I talked to Jay Carney just a little while ago...

MATTHEWS: It doesn`t work mathematically.

FINEMAN: He said it just can`t work. And even though they don`t want
to, the White House says it doesn`t want to let the Bush tax cuts expire
and have everybody`s taxes go up, if we go into next January, if we go to
the next Congress...


FINEMAN: ... which is more Democrats in both the House and the
Senate, I think this White House would be willing to take its chances that
they can pass a bill to cut taxes again for the middle class and leave the
rates expired for the top. That`s their -- that`s their...


FINEMAN: ... ace in the hole strategy.

MATTHEWS: That is a dangerous game, though, because...

FINEMAN: I know.

MATTHEWS: ... you do not know what the world markets are going to do.
They`re watching this in Tokyo. They`re watching this in Hong Kong.
They`re going, These Americans...

FINEMAN: I know.

MATTHEWS: ... can`t get their act together.

Joy, let`s get back to the equity issue here. You know, I sometimes
think -- remember the British -- the Raj days of the Indian army all
fighting for British rule, but it was the Indian army fighting for British
rule, these Gurkhas running around with rifles and banded legs supporting
the British empire, OK?

Is that the Republican Party? Is that who they are? They`re not 2
percent. The Republican Party is not 2 percent, but yet half the country
almost, the 47 percent that voted for them, are still out there fighting
for that top 2 percent. They`re the Gurkha army.

REID: It`s amazing...

MATTHEWS: Why are they doing this?

REID: You sound like you`ve just described the Tea Party because
that`s exactly what I think of the Tea Party...

MATTHEWS: They`re not rich.

REID: ... a bunch of guys who are middle class themselves fighting
until the last dog dies to make sure rich people get their tax cuts. Its

And they`ll say, Well, it`s because I never got a job from a poor guy.
OK, but if you give somebody that`s got millions and millions of dollars
another $100,000, they`re not going to spend it into the economy and hire
somebody with it, they`re going to send it to the Caymans, which is what
Mitt Romney did with his hundreds of thousands of dollars in tax cuts.
That`s what they`re going to do.

So the economic theory is not sound. If you give somebody with
$50,000 another $1,000, they`re going to spend it.


MATTHEWS: At Christmastime, instead of everybody -- a working stiff
gets 50 bucks in an envelope for a thank you, working in the coal mine,
they gave their 50 bucks to the boss?

REID: To the boss!

MATTHEWS: Is that how...


FINEMAN: By the way, a long time before the Tea Party existed or had
a name...


FINEMAN: ... Grover Norquist, the famous anti-tax lobbyist in


FINEMAN: ... was running around, beginning to enforce ayatollah-style
his edict about taxes. And he got Republicans beginning back in the `80s
to sign these tax pledges, which, as I say, that tax pledge has really
become the core identity of the modern conservative Republican Party.

MATTHEWS: OK. We got a new cut at this. Fred Barnes -- Fred the
beetle (ph) Barns as he was called for years on McLaughlin -- he`s a smart
conservative. He`s not some crazy, anyway. He would like to give the tax
cut off (ph) at a million. Here`s what he wants to do. "An increase in
the individual income tax rate for the affluent may be unavoidable. Obama
did spend the last two years proselytizing for such a hike, and as he says,
voters well -- knew well. They were aware of it when they reelected him.
But the White House has said the rates don`t have to return to Clinton-era
levels to a 39.6 percent rate for the current 35 percent. And Republicans
can take advantage of this concession. Obama`s nemesis, as he often told
us, are millionaires and billionaires. So why not urge that the higher tax
rates be applied only to those with incomes of $1 million and more and not
to couples earning more than $250,000, individuals" -- (INAUDIBLE)

Now, I`m talking pure politics, not equity in this case. Joy, can
they hang their hat on the fact, OK, you`re against millionaires, we`re
going to take back the cut for the millionaires?

REID: Chris...

MATTHEWS: But below that, they`re going to have to -- they`re going
to get the deal.

REID: Well, the problem is with this is that Chuck Schumer and other
Senate Democrats tried to offer this to Republicans last time.


REID: Remember the last time we did this, they rejected it.

MATTHEWS: Well, that works for them now, though, doesn`t it?

REID: Right. Exactly.

MATTHEWS: Yes, but it works for them now. They can say, yes, all we
want is the Schumer deal.

REID: Right now, they don`t have the leverage to get the Schumer
deal. They rejected the Schumer deal when he offered it.

MATTHEWS: OK, that`s what you say.

REID: And they don`t have the leverage to get it.

MATTHEWS: OK, here we disagree. I think they may have a case here.

FINEMAN: I think so, too.

MATTHEWS: The bogeyman is the millionaire, right...


FINEMAN: And I think that`s where it`s going to end up. I think
that`s the flexibility in the negotiations at the end is over to whom the
higher rates apply.

MATTHEWS: But they don`t raise that much money if you do it this way.

FINEMAN: It`s true. It`s a sliding scale. The higher up you go, the
less money you raise, but I think...

MATTHEWS: Is it really a debt reduction thing or an equity thing at
that point?

FINEMAN: At this point...

MATTHEWS: Do we really accomplish anything...


FINEMAN: For the president, it`s both about the arithmetic and about
the point. It`s about the point of everybody paying their fair share.

MATTHEWS: OK, let`s talk now about where we`re at. People tuned in
tonight to find out where it`s at. Roughly speaking, what happened on
Sunday is Geithner went on -- he`s a smart guy, not a political guy at all
-- he`s kind of soft-spoken, unlike some of us, me especially. So he goes
on the Sunday shows. He does a full Ginsburg. We call that because that
was Monica -- Monica...

FINEMAN: All the shows.

MATTHEWS: ... Lewinsky -- Lewinsky`s father, and he went on five
shows. He did the full Ginsburg, made the full case...

FINEMAN: The lawyer, not the father.

MATTHEWS: The lawyer went -- I`m sorry...


MATTHEWS: That`s why the names are different!

Anyway, they made the whole point over the weekend where they stood.
Basically, the administration position is clear. We want the rich to pay
their share. That`s what we ran on. That`s what the voters voted for.
And damn it, that ought to be the case it is right now. Listen to the
voters. Respect the voters.

Today the Republicans came out and said, No, we don`t hear that in the
voters out there. The House has been reelected Republican, so all we`re
going to do is go back to basically where we were the last time we had this
head to head, this donnybrook, and we`re going to offer an $800 billion tax
cut -- or tax increase, but we`re not say where it`s coming from.

REID: Exactly.

MATTHEWS: And by the way, we`re going to throw in some tax cuts for
the rich besides. Then the White House came back today late this
afternoon, just before we went on the air, about five minutes before we hit
the air tonight, and said, No deal. This is no deal because all it is, is
more breaks for the rich. It`s not giving (ph) anything on what this
election was about.

So where are we at, Joy?

REID: Yes, I mean, we`re nowhere. And Boehner keeps saying, Well, we
offered revenue, but just like before the election with Mitt Romney, they
won`t specify where this revenue comes from. What are they going after,
the mortgage interest deduction? Are you going to go after the deductions
for health care? You going to sock it to the elderly and not -- you know,
in the tax treatment of Medicare? What are you going after?

They won`t be specific, either. And then they say the White House
won`t be specific. So I think that Lindsey Graham is probably right, that
we`re not going to be able to get a deal by the end of the year because
each has staked out negotiating positions that the other cannot possibly

MATTHEWS: I don`t believe this deduction thing. I don`t buy this
deduction (INAUDIBLE) The minute you come out and take away charitable

REID: Exactly.

MATTHEWS: ... every philanthropic and church and temple...

FINEMAN: It`s never going to happen.

MATTHEWS: ... organization is...

REID: You can`t do it.

MATTHEWS: ... going to go crazy!

FINEMAN: It`s never going to happen. Now, I know that the White
House people are planning to leave town starting on the 23rd, you know,
22nd, 23rd. They`re all saying, Hey, we`re out of here. There`s no deal.

MATTHEWS: What does that mean?

FINEMAN: Well, I think that means that they`re willing to say -- and
I know you`re concerned about world markets...

MATTHEWS: I`m worried about the way the world looks at us.

FINEMAN: I think the world markets are pretty sophisticated about who
we are and the way we operate. And what the president...

MATTHEWS: What, that we`re clownish?



FINEMAN: That we`ll push the argument as long as we possibly can.
And there is a case to be made that the president and the Democrats will be
in a stronger position when the new Congress arrives. And I think, even
though this is not their favorite -- favored outcome, that the White House
is willing to roll the dice on that and they`re willing to wait to January
and allow the Bush tax cuts to expire.

MATTHEWS: I think it`s playing a very dangerous game.

FINEMAN: Well, I`m just...

MATTHEWS: You saw what happened...

FINEMAN: They certainly weren`t...



REID: I`m with Howard.

FINEMAN: ... ruling it out.

MATTHEWS: I know. I`m against both of you on this because I saw what
happened in August of 2011, when this thing went on last time. And we had
a credit downgrade in what we`re worth in the world. We are the currency
of the world. We have a responsibility to the world. I don`t want to
sound too grown up here...

FINEMAN: No, no.

MATTHEWS: ... but I am, and I do worry about -- the president of the
United States is the leader of this country. The Democratic Party is the
government party and the governing party. If the Republicans want to play
British parliamentary politics and vote as a unit against anything good,
that`s their screw-up.

FINEMAN: Well, but look at it from the president`s point of view.
He`s saying he ran on this for the last two years, and he`s got to stick...

MATTHEWS: Shove it down their throat now before Christmas.

REID: Well, and the problem is...

MATTHEWS: He`s got to do it.

REID: I think that we have the -- we have two problems. One, that we
look ungovernable. I`m with you on that, Chris, that we look like we have
a party that will not allow the president to assume the governing authority
he earned with an election.

On the other hand, I think the world markets would -- have priced in
(INAUDIBLE) I know we disagree on this -- and we could get...

MATTHEWS: No, they priced in we`ll get the deal done.

REID: ... away with getting -- well, no, yes, and that a deal will
eventually get done. Exactly. That`s the exact point because I think that
the markets believe we will eventually do the deal. It`s just whether we
do it before or after January 3rd.

MATTHEWS: When you pay your bills on time, you`re impressive. When
you pay them late, you`re not. Anyway, thank you, Howard Fineman. Thank
you, Joy Reid.

REID: Thank you.

MATTHEWS: Coming up: Maybe Grover`s not over. There`s a great
phrase. For a couple weeks, Republicans could be seen saying they were no
longer bound -- human bondage -- to Grover Norquist`s "no new taxes"
pledge. But lately some of them have been quietly over the telephone
slithering back into Grover`s embrace.

This is embarrassing for some of these senators. They come out
against the guy. They say it doesn`t matter, then sneak back in on the
phone -- I`m sorry, Grover, I`m sorry.

Plus, the election is over, but it could already be beginning for
2016. Let`s watch.


think we`ve heard the last of Hillary Clinton.

that the best is yet to come.


MATTHEWS: A lot of basking in that by the secretary of state. It
sure looks like -- I saw that video, it looks like she enjoyed the proposal
that she run for president. We`ll be back with that later.

And Republicans are still stunned over what happened on election day.
They blame the urban vote -- I love these codes -- the underclass. They
really are talking about is (ph) America today. Get used to it. Those are
the people that voted for President Obama, Americans. You`re stunned --
they`re stunned because they hate Obama and only talk to other Republicans
who also hate Obama. Get it? They`re in this bubble and when the bubble
bursts, they start to cry.

Finally, "Let Me Finish" with how the nobodies finally won.

And this is HARDBALL, the place for politics.


MATTHEWS: Wow, President Obama`s asking Florida congresswoman Debbie
Wasserman Schultz to stay on as chair of the Democratic National Committee.
That`s big news for her. Wasserman Schultz, a frequent guest on this and
other TV networks, has been the head of the party since the spring of 2011.

She had a good year. Democrats, of course, won seats in both the
Senate and the House this year, besides President Obama`s reelection
victory, an all-around big victory for her. The DNC will meet the day
after the inauguration to elect its officers.

We`ll be right back.



SEN. CLAIRE MCCASKILL (D), MISSOURI: The question is -- I feel almost
sorry for John Boehner. And in some ways, he has got to deal with this
base of the Republican who Grover Norquist represents, and you know,
everybody has elevated Grover. I mean, I met him for the first time this
morning. Nice to meet him, but you know, who is he? Why is he this guy
that has captured so much attention in this?


MATTHEWS: Welcome back to an embarrassing segment of HARDBALL that`s
(INAUDIBLE) That was Senator Claire McCaskill on "MEET THE PRESS" yesterday
-- she`s not the embarrassment -- asking a good question. Who is Grover
Norquist, and how does one man who doesn`t even get elected by anybody to
anything become such a force in a political party?

As Senator McCaskill put it, Norquist has come to represent the base
of the party and the heart of the opposition to any potential fiscal cliff
Speaker Boehner can work out with the president. He can`t work anything
out without this guy`s approval.

Anyway, could that force a revolt from the right if he does? Well,
yesterday, Grover Norquist warned of a wave of Tea Party anger, a "Tea
Party 2" that would dwarf anything we`ve seen before. Let`s take a look at
the threat from Grover.


next four years are going to get. Everything in "Obama care" that Obama
didn`t want you to focus on or think about, the 90 percent of his trillion-
dollar tax increase, was pushed over until after he got himself safely

All those regulations you`re now hearing about, OK, that are being
(INAUDIBLE) those all hit after the election. We got four bad years of
regulation, taxes. He wants to add higher taxes to that. Tea Party 2 is
going to dwarf Tea Party 1 if Obama pushes us off the cliff.


MATTHEWS: Boy, there`s a Doctor Strangelove. Anyway, how many
Republicans will be willing to stand up to that threat?

Well, David Corn is here to talk about it, the Washington bureau chief
for "Mother Joins" and the author of the ebook "47 Percent." He`s an MSNBC
political analyst, a member of the Gridiron Society.


MATTHEWS: And John Feehery is a Republican strategist. Thank you,

Grover, you`re -- you`re playing defense here -- one man elected to
nothing. The fact that Saxby Chambliss comes out, I don`t have to live up
to some pledge I made 20 years ago, then calls up and has Grover on the
phone going through his transcript of what he said, and he`s apologizing
for each segment of it.

What`s going on? A senator has to kiss butt...

JOHN FEEHERY, REPUBLICAN STRATEGIST: Let me -- let me say this...

MATTHEWS: ... to this guy?

FEEHERY: I`ve known Grover for a long time and I like him, and he
represents something...

MATTHEWS: You`re afraid of him, too!

FEEHERY: I`m not afraid of him. Let me say this...


FEEHERY: He represents a cause and his cause has been anti-tax. And
you know what? He`s been amazingly successful because taxes have gone down
for a long time because of Grover Norquist.

MATTHEWS: I don`t...

FEEHERY: Now, the question -- now, the question is, what do we now?
Because taxes are automatically going up. And Republicans understand
there`s got to be -- if you got to cut a deal, you got to cut a deal
eventually -- I think it`s easier to cut a deal after the taxes
automatically go up because then you`re fighting for tax cuts, not tax
increases. But you know, we`ll see. And the fact of the matter is that
Grover is just a vessel for a bigger issue. Taxes used to be...


MATTHEWS: ... because he seems to be calling the shots. It`s not

FEEHERY: Oh, no, he`s not calling the shots.

MATTHEWS: Last week, by the way -- just to figure out (INAUDIBLE)
Last week on the media, there was a lot of reporting that Senator --
Georgia senator Saxby Chambliss stood up to Grover or even broke with him.

Here`s what he said. Let`s take a look at that first.


SEN. SAXBY CHAMBLISS (R), GEORGIA: I care more about this country
than I do about a 20-year-old pledge.

UNIDENTIFIED MALE: Do you think that Grover Norquist would hold a "no
new tax" pledge that you signed 20 years ago -- would he hold that against
you in an upcoming reelection bid for the U.S. Senate?

CHAMBLISS: Well, you know, in all likelihood, yes, but I don`t worry
about that because I care too much about my country. I care a lot more
about it than I do about Grover Norquist.


MATTHEWS: Well, "The Washington Post" reports today that five days
after making those comments on television -- on radio, rather, Chambliss
and Norquist spoke on the phone.

And the senator sounded a conciliatory note -- quote -- "As Norquist
read allowed a transcript of Chambliss` earlier remarks item by item,
Norquist recalled later, the senator repeatedly assured him on each one of
those points that he did not mean to imply they had major differences."

When it came to GOP principles on taxes -- quote -- "He said he wished
he hadn`t invoked my name and wished that he had been clearer, Norquist
recalled from the Monday conversation."

Now, I don`t know how you explain that. Now, we are going to have to
hear from Saxby Chambliss, who I do respect. But I`m going to hear -- the
fact that he had to call this guy and let this nobody read a list of
complaints and have to apologize for each one is outrageous.

DAVID CORN, MSNBC POLITICAL ANALYST: Now, Grover is not really the
big issue here.

MATTHEWS: Oh, he ain`t?

CORN: No, no, it ain`t.

It`s the Tea Party itself and the fact that the Republican Party, we
saw it in the primaries, we see it in the congressional races, too, that
they`re basically being held hostage by the far-right ends of the party.
The reason why Boehner has trouble cutting a deal is not because Boehner
can`t cut a deal. I think in five minutes` time, he and Obama would come
up with something very...


MATTHEWS: Excuse me. Excuse me. You`re wrong. No, You`re wrong.


MATTHEWS: David, you`re wrong, all that Grover has to say, all he has
to say is, we`re in a particular fiscal crunch right now and we have got to
make allowances for that. And if he did that, a lot would change.


CORN: Grover only counts because these Tea Party guys, the 50, 60, 70
in the House, they have a theological opposition to any...

MATTHEWS: Those 50 or 60 are fine.


CORN: They`re worried about being primaried from the right.


MATTHEWS: I know those people are...


MATTHEWS: Let`s talk about the caucus you used to work with. And you
know the caucus.

FEEHERY: Very well.

MATTHEWS: Aren`t there a lot of people over there if Grover Norquist
came out and said, look, these are particular times now, we have got a real
fiscal crunch here, we have got to make a couple adjustments?

FEEHERY: Listen...


MATTHEWS: Wouldn`t that move the members? Wouldn`t that move the


FEEHERY: Members of Congress should not have to negotiate with Grover


MATTHEWS: But I`m asking you an open question. Would that have an
influence, positive influence?

FEEHERY: It could, but it would actually -- for Grover, he`s an
activist. He`s someone -- he has his ideals, and if he compromises on
that, that`s harder for him.

The fact of the matter is that -- listen, Saxby Chambliss is a hero.
He`s a guy who is in the arena trying to cut deals. And it`s hard because
you have people on both sides attacking you all the time.

David, you`re absolutely right. These members of Congress and
senators are worried about primaries. If you don`t get -- that`s why it`s
so hard to cut deals these days.


CORN: And they`re more of the drag than Grover.


MATTHEWS: But I see guys on your end of the...


MATTHEWS: I`m not tying you into this. You seem like a regular


MATTHEWS: No, I mean it. There`s a difference. Every time somebody
offends Rush Limbaugh -- we have been through this for years here -- they
call up and apologize.

Every time we see a guy question Grover Norquist`s power, they call up
and apologize. What is it about that you have back to the altar every time
if they don`t matter, that particular man has to be apologized to?

FEEHERY: I don`t think it`s...


MATTHEWS: Well, why did Saxby do it?

FEEHERY: Because. You know what?


CORN: He`s worried about a primary challenge.

FEEHERY: I think what Saxby is trying to explain the hard work he`s
trying to do. And also Grover knows that and everyone knows that these
taxes are automatically going up. At some point in time, you got to go and


MATTHEWS: It`s December 3. Ready?

CORN: Right.

MATTHEWS: We got to get this done by December 31 under ideal
circumstances. What is Grover`s role going to be the next three weeks?

FEEHERY: Well, I think he`s going to continue to be the guy who is
against taxes. He`s not going to change at all.

MATTHEWS: And if we don`t have any taxes on the deal, there won`t be
a deal. The Democrats will never sign a deal with no taxes.

CORN: No, there is no deal. The president`s -- White House people
have told me again and again that the president doesn`t want to go over the
cliff. He`d rather cut a deal, but...

MATTHEWS: No, let`s talk about the taxes.

CORN: But he`s willing to on the tax deal.

MATTHEWS: To get the taxes up on the rich.


CORN: Wait a second. Let me just finish this point.

Two years ago, when he gave in on a temporary extension of the Bush
tax cuts to get a second stimulus bill, the president said at the time, I`m
not doing this again. A lot of people didn`t pay attention to his vow, but
I think he`s damn serious.


FEEHERY: And, Chris, and my view there`s only one issue that really
matters and that`s, what are you going to do about entitlements? If you
don`t cut entitlements, if we don`t deal with entitlements, there should be
no deal.


MATTHEWS: They`re going to do that. They`re going to do that.

How damaging is a fight over the fiscal cliff to the Republican Party
right now, to their brand?

Let`s take a look at what conservative commentator Bill Kristol said
yesterday on FOX. Let`s watch Bill.


real risk in my view now of looking like they are defending keeping the
current tax rates for the wealthy.

At the end of the day, President Obama is selling a simple very
message: I want to keep taxes low for middle class Americans.

And Republicans look like -- I`m worried are in the position of
looking this as if they don`t care about the middle class and just want to
keep tax rates low for wealthier Americans.


MATTHEWS: Yes or no, is he right? Yes or no?

FEEHERY: I don`t think so. I think it`s far too easy.

CORN: Well, I think he`s right.

Democratic strategists are giddy. For two years, they have been
trying to make this argument. The Republicans are going to hold your cuts
up for the 2 percent.


FEEHERY: Let me go back.


MATTHEWS: Is he right or wrong?

FEEHERY: I think he`s wrong. But I think, ultimately, if we don`t
get a deal, it`s bad for President Obama, it`s bad for his legacy, and it`s
bad for Democrats. I think that`s a fact.

MATTHEWS: OK. I think you`re right, by the way, but I also think
that your party lost this election. They should act accordingly, and
they`re not doing it.

MATTHEWS: John Boehner didn`t lose. John Boehner is still speaker of
the House.


CORN: He lost seats, though.

MATTHEWS: That is an irrelevant -- that is exactly where you`re all
screwed up.


MATTHEWS: You know, when Tip O`Neill was speaker with a lot more
seats than you guys have, he never claimed he had a national mandate,
because he saw Reagan had one. We vote for president of the United States.
The American people do not vote for John Boehner.

Anyway, thank you, David Corn.

You`re dead wrong on this one.

Anyway, and John Feehery.

And I`m thrashing you.



MATTHEWS: Up next: some wishful thinking from John McCain and John
Kerry, losers of two presidential elections. Watch how Kerry stays out of
this. He`s not campaigning. He`s careful here.

And this is HARDBALL, the place for politics.


MATTHEWS: Back to HARDBALL. Now to the "Sideshow."

At the Kennedy Center Honors last night, comedian Ray Romano paid
tribute to honoree David Letterman, but slipped in a bow to President


RAY ROMANO, COMEDIAN: Do you quit -- you want to win the World
Series. Do you quit? You`re down one game to nothing. No, you keep
going. You keep going. Do you quit when you`re down 1-0 in debates? No.




ROMANO: You keep going.


MATTHEWS: Well, that`s true.

This year`s honorees included Dustin Hoffman, Led Zeppelin and more.
And President -- and the president spoke to them at a White House reception
and pointed out a hiccup in his own speechwriting process.


sitting next to Dustin Hoffman.


OBAMA: We have got Dave Letterman alongside one of the greatest
ballerinas of all time. I don`t think Dave dances.

I worked with the speechwriters. There`s no smooth transition from
ballet to Led Zeppelin.


OBAMA: Of course, these guys also redefined the rock `n` roll


OBAMA: We do not have video of this.


OBAMA: But there was some hotel rooms trashed and mayhem all around.


OBAMA: So it`s fitting that we`re doing this in a room with windows
that are about three inches thick.



MATTHEWS: Anyway, here is Meryl Streep, by the way, also in town for
the event, taking a picture of herself. There she is and of course
Secretary Hillary Clinton.

Bill Clinton, among others, has said that if there`s ever a movie made
about Hillary Clinton, Meryl Streep should get the part, which makes
perfect sense.

Next, secretary who? At a U.N. event to benefit people with
disabilities today, John McCain took off -- he took on the rumors of who
will be the next secretary of state after an introduction from John Kerry.



SEN. JOHN MCCAIN (R), ARIZONA: Thank you very much, Mr. Secretary.



MATTHEWS: Well, Kerry stepped up again after McCain, but refused to
bite on that one.


KERRY: Thank you very much, Mr. President.


KERRY: This is what happens when you get two losers up here, folks.



MATTHEWS: Actually, that was a good line.

Kerry has been careful, by the way, to stay clear of the public
speculation about whom the president will actually pick to replace Hillary

Also, Arizona Governor Jan Brewer, boy, she`s a heavyweight, in a
comment about global warming, she doesn`t think it`s manmade, of course,
but her own explanation for climate change is rather lacking. Here is what
she told a local reporter.


GOV. JAN BREWER (R), ARIZONA: Everybody has an opinion on it, you
know, and I probably don`t believe that it`s manmade. I believe that, you
know, that weather and certain elements are controlled maybe by different


MATTHEWS: Another pathetic comment by an enemy of science.

Anyway, up next: It sure looks like Hillary Clinton is running for
president. We have got the latest signs next.

And you`re watching HARDBALL, the place for politics.


SUE HERERA, CNBC CORRESPONDENT: I`m Sue Herera with your CNBC "Market

Worries about the fiscal cliff send stocks lower. The Dow fell 60
points, the S&P lost about seven, and the Nasdaq is off eight points.

An industry report on manufacturing showed activity contracted last
month, falling to the lowest level in more than three years. Meanwhile,
construction spending actually rose 1.4 percent in October due to increased
spending on homes.

And Ford and GM both ended lower after reporting their latest sales

That`s it from CNBC. We are first in business worldwide -- and now
back to Chris and HARDBALL.

MATTHEWS: We`re back.

Hillary Clinton is running for president. Those are the words of "New
Yorker" editor David Remnick this week after he attended the Saban Forum
here in Washington last week. Remnick writes of a tribute video produced
for the forum last week in which American and world leaders display their
love for the secretary of state and leave the door open for her future
plans, I would say wide open. Here it is.


thing or two about political comebacks, I can tell you I don`t think we
have heard the last of Hillary Clinton.

that the best is yet to come.


MATTHEWS: Well, it was quite a tribute. I watched it this afternoon.

Remnick, by the way, goes on to say: "There was much chatter about
what Clinton would do after she steps down from the Cabinet next month, get
a haircut, take a few weeks sleeping it off, sleeping off the jet lag at
Canyon Ranch, read the polls and the political landscape, do good works, do
good works for the good people of, oh, say, Iowa, and so on? Everyone had
a theory of which they were very proud and were 100 percent certain of.
Anyway, that wasn`t much doubt about the ultimate direction; 2007-2008 was
but a memory, 2016 was within sight. She`s running."

This is the editor of the "New Yorker" magazine, a very smart guy who
has written about everybody in the world.

Ed Rendell is the former governor of Pennsylvania and future chief of
staff to President Clinton.


MATTHEWS: He`s the editor at large for -- she`s the editor at large,
Joan Walsh.


MATTHEWS: I`m sorry, Ed. I`m sure you have a bigger job in mine.
But you could do either of those.

Both are MSNBC political analysts.

So, let`s go to Mr. Inside first before we go to the speculations of a
brilliant liberal commentator.


MATTHEWS: Let`s go to the knowledge base of an insider who is close
friends with not just Bill, but very close friends with Hillary Clinton as
well, who knows them and I believe would get the first call when they do
decide to make the run probably next year or the year -- early the
following year.

But when they do make the call, tell me what you think will be in
their thinking when they call. How to do it differently? How to do it
differently? How to do it better? How to do it faster? How to lock it up
easy? How to scare off the opponents? All that.



believe what Hillary says right now. I believe she`s tired, she`s beat up,
and if you injected her with sodium pentathol and said, are you going to
run for president, she`d say no.

Is she persuadable? Of course she is. And are the hundreds and
thousands of people who want to see her run going to take a shot at it?
Yes, they are. When she`s relaxed and not so tired, could she make a
different decision? Very possibly yes.

But I don`t think it`s a done deal by any means. And if they do, do
it, the answer to your question is, yes, they have got to do it totally
differently. They have got to get out early, husband there -- raise a
whole boatload of money. Make sure that there are resources if it is a
fight down the road.

And if I would, if I was advising Hillary, try to get her to preempt
the field. And I think she has a chance to preempt the field.

MATTHEWS: And don`t forget the caucuses either. They forgot them,
those places like South Dakota that they overlooked, those places.


MATTHEWS: Joan, your thought, because I want to get to the governor
about the inside here too.

Your thoughts about the will she or won`t she? I think that what it
sounds like from the governor is it`s going to be like Ike back in `52,
where Henry Cabot Lodge and people like Hugh Scott, they had to go beg him
to run. This could be the first time in history where people had to go to
the candidate, the governor is saying.

JOAN WALSH, MSNBC POLITICAL ANALYST: I think she`s -- I think that`s
true, Chris, but I think -- and I agree with the governor. She`s probably

She would -- she probably thinks she doesn`t want to go do it, but
when she gets cajoled and guilt-tripped by liberals and by women and by
people who really believe in her...

MATTHEWS: Why wouldn`t she want to be president if it`s offered to
her? I`m just asking.

WALSH: Well, you know why? Because it`s not being offered to her,
and that`s the one thing that I want to -- that`s the point I want to make
the most strongly.

I have to say, I had a very weird reaction to that video. I supported
her in 2008. I hope she runs. And if she runs, I expect to support her in
2016, although we don`t know what the future will hold.

But the most dangerous thing for Hillary Clinton is to believe what
people are telling her about how she walks on water. We had an inevitable
front-runner in 2007 in the Democratic Party. Only, she lost. And I would
hate to see that happen again.

But the fest shrift of that video and the adulation and the sense
that it`s just hers for the asking I think is poison for Hillary Clinton.

MATTHEWS: I think you`re right.

WALSH: And so I would advise her to put that video away and never
watch it again, and make a decision based on the future of 2016.

MATTHEWS: You`re so smart, Joan.

Let`s go back to a candidate that Governor Rendell backed back in
1980. You know, I am Irish so I remember everything, especially travails
in my life. When I was sitting there writing speeches for Jimmy Carter and
you were running around in Philadelphia, yes, building the case with Billy
Green, young Billy, to build the case for the inevitable nomination of Ted
Kennedy, it was inevitable for about a week and then he announced and it

So tell me, are you a little afraid of that?

possibility, but I think Hillary learned from 2008. I think she`s
burnished her resume. I mean, if Americans thought, and a lot of them did,
a majority of Democratic voters -- I hate to open up old sores -- but a
majority of Democratic voters voted for her in 2008, and if they believe
she was ready to be president in 2008 after her incredible performance as
secretary of state, I think Democratic voters do respond to a Clinton
presidency bid.

There`s no question --

MATTHEWS: How does she -- go ahead, Governor.


MATTHEWS: Go ahead. I`m sorry. Your voice.

RENDELL: No, no, the answer to the question though is you once asked
me would I want to be president, and I said, Chris, I would be president if
I woke up and found I was president, I wouldn`t resign, but I don`t want to
run for president.

Right now, Hillary Clinton doesn`t want to run for president. She
doesn`t want to slog through Iowa. She doesn`t want to slog through New
Hampshire. That can change but I think she honestly means it right now.

MATTHEWS: You know, the question I have to ask and I`m not an
insider with her but I have warmed to her a lot over the years, and I have
been very regretful of being too tough on her. I have been very regretful
being too tough, and I really mean that even though I`m chuckling all the
time here.

But, Joan, here is the question.


MATTHEWS: How do you keep that aura of statesmanship, of being a
world leader when you get in the trenches because they are rough out there?
You get into Iowa and you got a bunch of reporters chasing you around for
every comment you make. How do you stay up there like Eisenhower was? How
do you stay up there like he was?

WALSH: Well, I think it`s very tough to be an Eisenhower figure in
this media landscape and I think the Clintons, you know, they rise -- their
stair rises and falls and were she to run, and where she to seem like the
frontrunner, there would be more people out there trying to pick her apart,
Chris. It would be worse than in 2008.

She`s also -- she`s very much tied to the Obama presidency which
could mean if he has a fantastic four years, that`s good for her. On the
other hand, the media are so fickle. We all know this. That there would
be people, you know, out there gunning for her.

Al Gore was not able to become president on the strength of the
Clinton presidency. So, you know, there`s just a lot -- there are a lot of
land mines in the way. I think she could do it, but, again, she`d really
have to decide why she wants to be president and tell that story to the
American people and make it be about 2016, not 2008 or 2000.

MATTHEWS: I think Clinton -- I think Bill Clinton rises and falls
but she always rises, but your thoughts, Governor, last quick thought.

RENDELL: Chris, just think as we discuss this issue, think of who is
out there in the Democratic Party that could actually make a serious
challenge to her right now. I certainly agree that the general election
would be, you know, nip and tuck and would be hard fought, but who is out
there that could preempt her? Possibly the vice president.

MATTHEWS: I think you`re right.

RENDELL: But his base and his fund-raisers are the same as hers.

WALSH: Right.

RENDELL: There`s just nobody out there who I think can contend with

MATTHEWS: Yes, I don`t see Martin O`Malley beating her. I see
Martin O`Malley on the ticket. I see Andrew Cuomo having the same base.
It would be tough.

Anyway, thank you, Governor. I know you thought this through and
will continue this stuff --

RENDELL: No baby boomer ticket, Chris?

MATTHEWS: I don`t know.

RENDELL: Hillary and Ed?

MATTHEWS: Hillary and Ed, that would be a great ticket. Let`s think
about that.

RENDELL: Baby boomer ticket.

MATTHEWS: I think you guys are too close to be running together.
Anyway, I don`t think the ticket is supposed to like each other that much.

Anyway, Joan Walsh, thank you. Governor Rendell, thanks for coming
on tonight.

Up next, why are Republicans so stunned that their guy lost? They
continue to be stunned that Obama won. We`re going to talk about how the
nobodies, that`s what they call the people that voted for Obama, pulled
this one off.

This is HARDBALL, the place for politics.


MATTHEWS: As we get closer to the holidays, I`d like you to think
about the hardship people in the New York area are facing from the ongoing
-- you won`t believe it -- ongoing devastation of hurricane Sandy. A good
way to help is a group in Staten Island, which is hit hard. That`s where
it`s been hit hard.

The Web site for that group is dratlasfoundation.com. The address is
Dr. Theodore Atlas Foundation, 543 Cary Avenue, Staten Island. But you get
it through the Web site, Dr,. Atlas Foundation.

They are doing great work helping people who have lost their
livelihoods, their homes and they`re really having it bad. They`re helping
kids of these families get through the holidays, helping in all the ways
the government doesn`t and needs the help to fill in the cracks.

There are other good causes out there this year. This one is a
special one right now.

We`ll be right back.



To listen to Republicans these days after the election, you would get
a sense of genuine shock at the makeup of the electorate. They`re
surprised who votes in this country. Mitt Romney infamously blamed his
loss to Obama`s gifts to minorities and young people, while his running
mate said he was surprised by the turnout from urban areas.

Let`s take a look.


REP. PAUL RYAN (R), WISCONSIN: I think the surprise was some of the
turnout -- some of the turnout, especially, in urban areas which definitely
gave President Obama the big margin to win this race.


MATTHEWS: Well, let`s watch a little more comprehensive look at
this. This is from a good by, a Republican Tom Davis. But listen how he
talks here. He`s a former congressman from northern Virginia. He talked
about the Democratic turnout efforts among the, quote, "underclass
minorities." In his words, or choice of words, were corrected by "Salon`s"
Joan Walsh in an interesting give and take last week. And we want to go
beyond that.

Let`s watch it.


TOM DAVIS (R-VA), FORMER U.S. CONGRESSMAN: Voter turnout has changed
dramatically as the underclass minorities are starting to vote.

WALSH: Mr. Davis, I just to give you free advice, I don`t think you
should refer to the underclass. I mean, that`s a really dated word and
that`s not who we`re talking about here, you know? We`re talking about a
lot of working people --

DAVIS: Economically they have less. I`ll us a more politically
correct term. Nothing -- no offense meant, obviously.

WALSH: It`s just a more accurate term. You know, when we talk about
people who make less than $50,000, a lot of those are -- those are middle
class people, too. Some of them are working poor.

DAVIS: That`s not where the voter turnout came. So, it`s really the
people making less than that polled out of the apartments, a lot of groups
that traditionally haven`t voted.


MATTHEWS: Pulled out of the apartments. A phrase used by Governor
Romney as well, pulled out of their apartments.

Given what is at stake, why exactly were Republicans so surprised
that the 50 so-called, the so-called 47 percent voted heavily this year
showed up?

Jonathan Chait is a columnist for "New York Magazine", and Bob Shrum
is a Democratic strategist and columnist for "The Daily Beast".

Gentlemen, it`s great to have you on.

Because I find that I keep trying to figure through the mindset that
we were hearing what`s called the mainstream media, where we kept hearing
Romney has a really good thing of winning this thing and you kept hearing
it among the establishment types. And then, wait a minute, there was an
election. And all of a sudden, there`s this other America, this real
America, that`s heard from -- actually some of it was other America in the
old sense of the book.

But your thoughts, Jonathan? And this idea of still using terms to
sort of diminish or separate poor people, minorities from being of the
American electorate, like it`s, oh, it`s that over there. That`s that.

JONATHAN CHAIT, NEW YORK MAGAZINE: That`s right. Look, you know,
the franchise is a thing that`s evolved through American history and once
upon a time you had to be white and male and own property. And I think
there still is an embedded mentality among some people that those are the
only people who at least make considerate decisions, right?

Maybe the others should be allowed to vote but they`re not thinking
for themselves. So they are being pulled out of their apartments. Others
are making the decision for them and they are going along in a way that
isn`t quite the same way that you and I would make a decision. That`s the
mentality that --

MATTHEWS: That is well said.

Bob, hard to beat that thought. They are not autonomous. They are
just being driven as a group. The group identity into voting a certain
way, they don`t have any individual thinking going on.

BOB SHRUM, DEMOCRATIC STRATEGIST: Well, look, what drove a lot of
them was that Mitt Romney said he didn`t care about tax fairness, he wanted
to let the auto industry go bankrupt, basically alienated Latinos and
Hispanics, and obviously offered nothing to black people and unmarried

Now, you know, over time -- and Jonathan is absolutely right about
this -- we`ve expanded the franchise in this country. There`s always been
a plutocratic response to that.

Chris, you will remember the famous line from "Engine Charlie"
Wilson. In Eisenhower`s cabinet, he was defense secretary, saying what`s
good for General Motors is good for the country.


SHRUM: It was a perfect embodiment in the plutocratic impulse.

This year, of course, it turned out that what was good for General
Motors was bad for Mitt Romney.

MATTHEWS: Yes, it was.

You know, I was thinking of the election up in Canada which nobody
ever thinks about in this country, but they have an election which the
French-speaking people lost their effort to separate from Canada.

CHAIT: Right.

MATTHEWS: And the leader of the French-speaking people, (INAUDIBLE),
says, oh, that`s because the ethnics voted -- meaning the people that
weren`t French speaking. All the Jewish people, and Indians and everyone
else that moved into that country to become part of Canada, but they
weren`t accepted as Canadians or (INAUDIBLE) because they were not French

SHRUM: Right.

CHAIT: And there isn`t the same mentality on both sides because the
Republican voting coalition is almost entirely white. The Democrats have a
lot of white voters but also a lot of nonwhite voter.


CHAIT: So the Democrats haven`t become accustomed into thinking of
one bloc of people as not being real votes.

MATTHEWS: Maybe that`s you got -- you have to visually, Bob -- if
you look at the two conventions, not to be partisan this way, but if you
look at a Republican convention, it looks pretty much monochromatic, right?
And then if you look -- and there`s a few women there with some power, but
basically white guys.

You look at the Democratic Convention, it`s pretty wild. I mean,
it`s pretty diverse. It`s interesting. It`s like America.


MATTHEWS: It`s different.


MATTHEWS: -- move across to that.

SHRUM: When you turn the camera randomly on at the Democratic
Convention and point it in any direction, and you would see the diversity
of America. The only time you see diversity at a Republican convention is
when the camera is pointed at the podium and they have people carefully
appointed to stand up and speak.

The fact of the matter is that you have a whole bunch of entitled
Americans who think they should own this country, some on the grounds of
race, some on the grounds of wealth, and they just can`t believe that
people went out and voted divisively rejected Mitt Romney, decisively
rejected his message.

Look at the madness going on right now on the fiscal cliff stuff.
Romney lost and Boehner is insisting on the Romney plan. We have and
elections in this country for a reason.

MATTHEWS: Hey, Bob, you can be a minority obviously at Republican
conventions, you`re just not encouraged to gather.


SHRUM: It`s hard to get enough of them together.

MATTHEWS: No, you`re not supposed to get together too much. That
concerns them, then.

Your thoughts? Are they going to learn their lesson this time when
they get into these budget negotiations, that there`s an America out there,
a bigger place?

CHAIT: Look, the center has moved. I mean, you can`t say the
Republicans are in the same place as they were before the election.
They`re moving --

MATTHEWS: You must have am microscope. We haven`t found out.

Anyway, thank for joining us Jonathan Chait, a very well-spoken, very
articulate fellow. Anyway, thank you.

Bob Shrum, seriously.

SHRUM: Thanks, Chris.

MATTHEWS: We`ll be right back. Bob, you are always articulate.

We`ll be right back.


MATTHEWS: Let me end up tonight on this thing about the nobodies
having re-elected President Obama. I`m talking about the way the other
side looks at it, the people wonder at the emergence of the so-called
underclass, about people being pulled out of their apartments to vote last

Well, you know, I can remember as a kid reading in the newspaper. I
think it was the old Philadelphia Bulletin, that the people who voted for
John F. Kennedy back in `60 were the same collection of nobodies, the less
well-off, the people without a lot of sway in business or in power
generally. No, they just happened to be the people who have a right to
vote and used it.

And this is more than disturbing to the people who are calling the
shots. It`s been downright stunning, in fact. And just as stunning today
four weeks later, because they weren`t ready for it for the simple reason
they weren`t used to it. Well, it happened. And let`s assume not for the
last time.

Someone that that get down this month to actually reaching a deal on
taxes and spending on the upper income people and those who vitally depend
on things like Social Security and Medicare and Medicaid -- they should
consider who won and who needs to be considered here. Why? Because the
nobodies is the big shots like they call them also have a stake in how this
deal gets cut.

And that`s HARDBALL for now. Thanks for being with us.

"POLITICS NATION" with Al Sharpton starts right now.


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