updated 1/4/2013 10:55:16 AM ET 2013-01-04T15:55:16

HARDBALL
January 3, 2013

Guest: Bob Shrum

MICHAEL SMERCONISH, GUEST HOST: Deficit masquerade.

Let`s play HARDBALL.

Good evening. I`m Michael Smerconish in New York for Chris Matthews.

Leading off tonight: Bait and switch. If you watched the follies of the
fiscal cliff negotiation, you surely heard one thing, Republicans want to
cut the deficit. Well, here`s a headline for you. No, they don`t.

According to our first two guests tonight, Republicans are hiding behind
deficit cutting to mask their true goals, protecting the rich from taxes
and shrinking the size of government. Keep that in mind when the next
self-imposed crisis comes calling in a couple of months.

Also, the best news of the day, the 112th Congress is history, and it made
history in many ways, the least productive, most unpopular Congress since
people have been tracking this sort of thing. The 113th can`t be worse,
can it?

Plus, Speaker John Boehner was shamed into scheduling a vote on Hurricane
Sandy relief after being humiliated by fellow Republicans. Is it possible
that the House didn`t vote because a Southern rural right-wing Republican
Party just doesn`t care about people in the mostly Democratic Northeast?

And 1st Amendment meets 2nd Amendment. On the day children from Sandy Hook
go back to school, a debate heats up over a newspaper that published the
names and addresses of every gun permit holder in two New York-area
counties. Now the paper wants to do it for a third county, but the county
clerk says no way.

And remember this?

(BEGIN VIDEO CLIP)

REP. BEN QUAYLE (R), ARIZONA: Barack Obama is the worst president in
history.

(END VIDEO CLIP)

SMERCONISH: That`s Congressman Ben Quayle walking off camera. Now he`s
walking out of the Capitol, one of the many members of Congress we won`t
see this term but whom you will see in the "Sideshow."

We begin with whether Republicans are pulling a bait and switch on the
deficit. MSNBC contributor Jared Bernstein was chief economist to Vice
President Biden, and Bob Shrum is a Democratic strategist.

Gentlemen, allow me to read to you something that former labor secretary
Robert Reich published today. Quote, "If the ongoing war between
Republicans and Democrats was really over those future budget deficits, you
might expect Republicans and Democrats to be focusing on ways to hold down
future health care costs. But they`re not debating this because the
federal deficit is not what this war is about. It`s about the size of
government. Tea Party Republicans want the government to be much smaller."

Jared, I say, yes, but surely, a $16 trillion debt is serious business and
requires attention.

JARED BERNSTEIN, FMR. BIDEN CHIEF ECONOMIST, MSNBC CONTRIBUTOR:
Absolutely. And in fact, if you look -- I don`t really do the kind of pox
on both their houses in this discussion because I don`t think it`s
accurate.

If you actually look at, for example, the offer that the president made in
mid-December, or for that matter, if you look at the president`s budget, he
actually accomplishes a stabilization of the debt as a share of GDP over
the budget window, and it involves tax increases and spending cuts.

Where I think the hypocrisy is so clear here is that it is -- every
nonpartisan budget analyst -- I`m thinking of the Congressional Budget
Office, major scorekeeper in this town -- agrees, you simply can`t achieve
a sustainable budget path without both.

And we have a group of Republicans who have stonewalled on both and were
only recently forced into swallowing what is actually a relatively small
tax increase in this fiscal deal after we`ve already cut a trillion in
spending.

SMERCONISH: Well, educate a neophyte like myself. Why should it be
measured as a percentage of GDP? Why is that the appropriate way to go?

BERNSTEIN: That`s a great question. Because as the economy and the
population gets larger, we`re going to, by definition, spend more.

So you know, I was arguing with someone today. I was pointing out that in
order to stabilize the debt, we need $1.2 trillion over the next 10 years.
That`s just the way the math works out, given these recent deals. And they
started pulling their hair out, saying, $1 trillion, that`s a big number!

It`s a half a percent of GDP over the next 10 years. So you have to look
at this relative to the size of the economy or you`ll just be swamped by
big numbers that sound impossible but they`re not.

SMERCONISH: Bob Shrum, let`s talk about the politics of this because if
the House Republicans are sort of in on the cabal, that`s it`s really not
about the deficits, then I`m here to argue that surely, their constituents
are not because I take telephone calls from them each and every day. My
father fits that mold of sort of an old-school Republican who`s terrified
about a $16 trillion debt.

BOB SHRUM, DEMOCRATIC STRATEGIST: Well, two things about that. First of
all, they want to hide behind the rubric of reducing spending. The truth
is -- and Grover Norquist has said this, sort of the high priest of
Republican economics and the Tea Party -- they want to starve the
government. They want to shred the social safety net.

They lost the last election. They not only lost that, they lost the last
century. So now they`d like to repeal much of the New Deal, much of the
Great Society, get rid of health care reform.

But secondly, the hypocrisy -- and Jared is right about this -- is
extraordinary. Where did most of this debt come from? It came from Bush`s
two unfunded wars, from an unfunded Medicare prescription drug benefit,
from the decision that was -- the set of decisions that led to the Bush
economic collapse in 2008. If you put all that together, that`s
responsible for most of this debt.

And by the way, the people who are now talking about spending cuts and we
really have to reduce the size of government were the folks who brought us
all that.

SMERCONISH: But are you saying that as a political matter, they`re aware
of the concern that exists among their constituents, people who call a talk
radio program like mine, and they are using that as a subterfuge to get to
what they really desire, which is to reduce the size of government?

SHRUM: Oh, sure. And look, the reason that they talk about, quote,
unquote, "entitlement reform," but the leadership itself, at least, will
not put out specific proposals is because what they want to do is very
unpopular even with constituents in very deep red districts.

For example, people do not want large cuts in Social Security. They don`t
want to see Social Security privatized. They don`t want to see Medicare
voucherized. They don`t want to see the age on Medicare raised.

Now, there are some changes that you can make, and Jared could describe
them, as part of a grand bargain. That`s not what these guys really want
to do.

SMERCONISH: Well, I think to your point -- and Jared, you know this, I`m
sure -- "New York Times" columnist Paul Krugman has called Republican
economic rhetoric a "con game," quote, unquote.

Last month, he observed this. "When you put Republicans on the spot and
demand specifics about how they`re going to make good on their posturing
about spending and deficits, they come up empty. There`s no there there.
Republicans claim to be for much smaller government, but as a political
matter, they`ve always attacked government spending in the abstract, never
coming clean with voters about the reality that big cuts in government
spending can happen only if we sharply curtail every -- all popular
programs."

And when I read that quote, what I immediately think of is the debate where
Governor Romney identified Big Bird because the best that he could come up
with in terms of a cut was PBS, which I guess makes the point.

BERNSTEIN: Michael, it`s a lot worse than that because you may recall that
President Obama, through the Affordable Care Act, generated $700 billion
over 10 years of savings in Medicare. Did Mitt Romney and Paul Ryan say,
That`s exactly what we mean when we talk about stabilizing the entitlements
or reforming the entitlements? No. They attacked him for those cuts and
they said, We`ll put them back in. So the hypocrisy is very deep.

But let me -- let me make two points about this. First of all, you know,
Bob is absolutely right. Do this -- this is a little economic-y, but just
do this thought experiment. Suppose you found an honest Republican -- and
there are some -- and you said, We can balance the budget if we collect 25
percent of GDP in revenue and spend 25 percent of GDP in outlays. Those
balance out, but those percentages are considerably higher than what we
usually spend. They would run from you in horror.

They`re not interested in balancing the budget, they`re interested in
shrinking the government. However, when it actually comes to plans,
Krugman is partially right. Now, there are Republicans who talk about
things like block granting Medicaid, who talk about premium support. In
every case, what do those do? They go after poor people while they`re
cutting the heck out of taxes for rich people!

SMERCONISH: But concern...

BERNSTEIN: So it`s vicious...

SMERCONISH: But concern about...

BERNSTEIN: ... class warfare!

SMERCONISH: Concern about the debt and deficit does not only come from the
right. Bob Shrum, the president, as part of his common parlance, is always
today talking about the need to control the debt and deficit.

SHRUM: As Jared said earlier, he presented a budget that would stabilize
the debt and then begin to reduce it over a period of time. The GOP and
the House just wasn`t interested in it, paid no attention to it.

In December, he was willing to enter into a "grand bargain." He was
willing to enter into a grand bargain before. What you have here is a
Republican Party in thrall to the Tea Party. You have a speaker of the
House who`s now a zombie. He`s less a speaker than a ventriloquist for the
Tea Party. And it`s very hard to get things done.

I never thought I would say this, but it`s quite extraordinary that Mitch
McConnell stepped forward, engaged with Vice President Biden -- who, by the
way, did a spectacular job -- and that`s how we averted going off the
fiscal cliff.

Now, what`s going to happen when we get to the renewal of the debt...

SMERCONISH: OK, I want to...

SHRUM: ... is not clear because the demand on all these people...

SMERCONISH: I want to quickly talk about that. Please take a look at what
Republican senator Pat Toomey said yesterday on "MORNING JOE" about
Republican obstructionism over the debt ceiling.

(BEGIN VIDEO CLIP)

SEN. PAT TOOMEY (R), PENNSYLVANIA: Our opportunity here is on the debt
ceiling. The president`s made it very clear he doesn`t even want to have a
discussion about it because he knows this is where we have leverage. We
Republicans need to be willing to tolerate a temporary partial government
shutdown, which is what that could mean.

(END VIDEO CLIP)

SMERCONISH: So Jared Bernstein, if the president stands his ground -- and
his ground thus far has been, I`m not negotiating on that issue...

BERNSTEIN: Right.

SMERCONISH: ... where are we going?

BERNSTEIN: Well, unless -- when the president says, I`m not negotiating,
what I very, very deeply hope he means is that, I will override, by dint of
my constitutional authority, those crazies who would default, not only
damaging our economy and -- and -- and defaulting on debt that`s held
around the world, but really, you know, hurting the global economy.

And so when he says, I won`t negotiate, I take that to mean, I`m not going
to play that game, I`m not going to let them hold us hostage.

Listen, I`ve got to make one quick point. All of this talk about debt,
fiscal policy, the deficits -- I get that you get calls about this stuff.
I do, too. But the thing I hear much more about is the economy, is the
unemployment rate, is jobs, is earnings, is family income.

And one of the things this argument has done -- it`s gotten so twisted that
politicians no longer think about what matters most to people. And Bob
probably knows this, too. If you look at the polls, all of those things I
mentioned are way above the deficit in terms of people`s primary concerns.

SMERCONISH: Bob, a final political question real quick, if I might. This
debt ceiling issue -- I think that what isn`t communicated sufficiently to
the American people is that we`re talking about making good on obligations
that the government has already made.

BERNSTEIN: Exactly.

SHRUM: Yes. Congress already voted to spend this money. If you default
on this, if you destroy the full faith and credit of the United States, you
can have an event that could be Lehman-like, the collapse of Lehman
Brothers in 2008...

SMERCONISH: I just...

SHRUM: ... and send the world...

SMERCONISH: ... wanted to make that...

SHRUM: ... economy off the edge...

SMERCONISH: I just wanted...

SHRUM: ... into disaster.

SMERCONISH: ... to make that clear. Thank you, Jared Bernstein.

BERNSTEIN: Thank you.

SMERCONISH: Thank you, Bob Shrum.

SHRUM: Thank you, Michael.

SMERCONISH: Up next: Good riddance to the 112th Congress, which was the
least effective Congress in decades. But will the 113th Congress just
sworn in today be any better?

This is HARDBALL, the place for politics.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: ... and that you will well
and faithfully discharge the duties of the office on which you are about to
enter, so help you God.

REPRESENTATIVES: I do!

BOEHNER: Congratulations, you`re now a member of the 13th Congress!

(APPLAUSE)

(COMMERCIAL BREAK)

SMERCONISH: John Boehner won reelection as House speaker today, but not
every Republican was behind him. Nine Republicans voted for somebody else,
and two of them, Georgia`s Paul Brown and Louie Gohmert of Texas, actually
voted for ex-Florida congressman Allen West. Remember him, the guy who
said there are about 80 communists in the Democratic caucus?

Brown and Gohmert are two of the more outspoken members of Congress. Back
in September, Brown, who sits on the House Science Committee, said
evolution was straight from the pit of hell. And Gohmert, who`s repeatedly
questioned President Obama`s citizenship, has suggested the Obama
administration is in cahoots with the Muslim Brotherhood.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BOEHNER: You come here humbled by the opportunity to serve. If you`ve
come here to be the determined voice of the people, if you`ve come here to
carry the standard of leadership demanded not by our constituents but by
the times, then you`ve come to the right place.

(APPLAUSE)

(END VIDEO CLIP)

SMERCONISH: Welcome back to HARDBALL. That was newly reelected speaker
John Boehner encouraging members to rise above partisanship and get to work
as the 113th Congress was sworn in.

And not a moment too soon. It would be hard to do worse than the 112th.
They were the least productive Congress on record, passing far fewer bills
than the last two preceding Congresses and even fewer than the famous do-
nothing Congress of 1947-1948.

But it`s not that they were just unproductive, they were actively
counterproductive. As Ezra Klein points out in Bloomberg today, the 112th
almost shut down government, almost breached the debt ceiling, and almost
went over the fiscal cliff, all crises of their own making.

Ezra Klein is also an MSNBC political analyst and "Washington Post"
columnist. Robert Costa is the Washington editor at "National Review" and
a CNBC contributor.

Gentlemen, the 112th Congress was not only unproductive, it was hugely
unpopular. For comparison`s sake, the IRS, Nixon during Watergate and BP
during the oil spill all had higher popularity ratings than this Congress.

And yet, Ezra Klein, if the objective was to thwart all things Obama, you
could say they were immensely successful.

EZRA KLEIN, "WASHINGTON POST," MSNBC POLICY ANALYST: And yet they weren`t,
right, because the overarching strategy in thwarting all things Obama was
to eventually thwart Obama himself, to get him not reelected, to allow Mitt
Romney or whoever was going to be the Republican nominee for president to
become president in 2012, thus fulfilling what Senate Minority Leader Mitch
McConnell once referred to as his top priority.

That didn`t work at all. The Republican brand was so tarnished, in part
because of the actions of the 112th Congress, in part because of the way
Republicans acted around things like the debt ceiling, that in the end,
President Obama was reelected with a quite large margin, and Democrats got
more votes in the Senate and even in the House, despite the fact that they
didn`t win back control of the majority due to redistricting and the
apportionment of House districts nationwide.

So if the overarching strategy was to make nothing happen in Washington and
have people take it out on the Democrats, that didn`t quite work out for
them.

SMERCONISH: Well, but take, for example, the fiscal cliff situation. And
we have a short-term fix as opposed to a "grand bargain" of any kind. That
you would attribute to the obstructionism in the House that he faced,
wouldn`t you?

KLEIN: The fiscal cliff was constructed at least in part by the 112th, but
again, it didn`t work out very well for them. Nobody got a big deal.

But at this point in time -- we`ll see how the next deal turns out --
President Obama and the Democrats got $630 billion in revenue and there was
not a spending cut added.

Now, of course, to that ledger, you need to add the 2011 Budget Control
Act, which included more than a trillion dollars in spending cuts and no
tax increases on the other side of it. But there`s not much evidence
Republicans have had a great time achieving their policy priorities in the
last couple of years. We`ve just had gridlock mixed with near economic
catastrophes.

SMERCONISH: Robert Costa, I know you were there today for the reelection
of Speaker Boehner. Any backstory of significance?

ROBERT COSTA, "NATIONAL REVIEW," CNBC CONTRIBUTOR: It`s a major backstory.
Speaker Boehner came into the election today trying to reclaim the gavel,
and he was able to do it with relative ease. He got 220 votes on the House
floor.

But what happened was a lot of drama on the House floor as that name-by-
name roll call was called. You had nine House conservatives vote for
different people.

We heard about Allen West, David Walker, the former comptroller general.
There was a lot of disarray on the House floor. You had the big names,
like Paul Ryan, Kevin McCarthy, Eric Cantor -- they all backed the speaker.
but what today`s vote tells us is that Boehner`s going to have a very tough
time moving forward, controlling his caucus. And they showed that today
many of them are willing to vote against him.

SMERCONISH: Is the 113th going to be different in any significant way than
the Congress that`s just left us?

COSTA: Oh, I think it`s going to be quite different, and we can already
tell why.

In a conference meeting yesterday, John Boehner went in front of his
conference and he said, no more grand bargains, no more closed-door
negotiations with the president. And that was really the story of the
112th Congress.

You had Speaker Boehner almost detached from his caucus going to the White
House trying to huddle with the president, get a grand bargain. That
collapsed. And so Boehner went in front of his group of colleagues and he
said, no more of that. We`re going to do everything through regular order.

That means it`s going to be very hard to have some kind of big fiscal deal
in this new Congress.

SMERCONISH: Ezra, to what do you attribute this climate of
hyperpolarization and partisanship? Much has been written, much has been
said about it, particularly in the last couple of months.

KLEIN: Look, congressional polarization, party polarization, more broadly,
it is a long-term trend in American political life. It has a lot to do
with the breakdown of race as a governing factor in how our parties
organize themselves.

Overtime, Northern liberals who were once Republicans came into the
Democratic Party. Southern Democrats who were quite conservative but
staying there for reasons related to civil rights and seniority went into
the Republican Party. And race began to fall away as the organizing
principle in life.

So the parties became more ideological, separate from one another. You had
Democrats agreeing with Democrats, Republicans agreeing with Republicans.
And as that happened, they began to act as units. We don`t have a
political system set up very well for parties to act as units.

The founders of course didn`t want there to be parties at all. They were
very against factions, even though they went on to create a number of them.
The 112th was a culmination of a lot of these trends you have been seeing
over the last 40 or 50 years in this kind of ideological sorting of the two
parties.

And the particular composition of the Congress in which you had a
Republican speaker from the Republican minority in the House, you had a
very slim Democratic majority in the Senate that was subject to the
filibuster and you had a Democratic president the Republicans were trying
to defeat was a perfect cocktail for this paralysis and polarization.

But I`m not optimistic about the 113th, because even if they do try to do
things through regular order, these same underlying dynamics are still
governing what`s happening in Congress right now.

(CROSSTALK)

SMERCONISH: And one of the things that`s troubling, "The National Journal"
has done a great job in documenting this by taking the ideological
temperature of Congress for the last 30 years, and they find that every
Democrat -- I will focus on the Senate -- every Democrat in the Senate is
more liberal than every Republican, every Republican more conservative than
every Democrat.

And you might think, well, isn`t that always the case? It isn`t. If you
go back to the Reagan `80s, 60 percent of the Senate was somewhere in the
middle, and couple that now with the Nate Silver analysis from just a
couple days ago at the 538 blog where he points out that in the House, of
435 districts, I think he said 35 of them are truly competitive, and the
rest are not.

They`re hyper-districts now.

Bob, you wanted to say something on this issue.

COSTA: Well, with respect to both of you, those are compelling arguments,
but there are two reasons I think there is hope for this new Congress.

One is that John Boehner won reelection today. He was able to win, even
though there is a part of his caucus that is very much to the right, very
conservative, and another part of his caucus, 85 members of the House
Republican Conference voted to support the Senate fiscal cliff deal.

Things are polarized. I`m not going to argue that. But the point is 85
Republicans did vote for a deal, did vote for something that was
bipartisan. Does that mean everything is going to be perfect moving ahead?
Of course not.

(CROSSTALK)

SMERCONISH: All right, Robert Costa`s glass is half-full. Mine is half-
empty.

COSTA: Oh, maybe a quarter, maybe a quarter.

SMERCONISH: Ezra, Ezra, is your half-full or empty?

KLEIN: I pretty much don`t have any water in my glass at all.

(LAUGHTER)

KLEIN: I really think Congress is in terrible shape.

I think if this fiscal cliff deal is what we`re calling success now, where
we just create traps for ourselves and then almost walk into them and then
create another one for two months later, that is not a good way to govern.
It`s not, as they like to say, how to run a railroad.

SMERCONISH: Gentlemen, thank you for being here, Ezra Klein and Robert
Costa.

KLEIN: Thank you.

COSTA: Thank you.

SMERCONISH: Up next: a special farewell to members of Congress we won`t
miss and one or two we will in the "Sideshow."

By the way, if you want to follow me on Twitter, you just need to figure
out how to spell Smerconish.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

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

Today marks the start of the 113th Congress, and that means we bid farewell
to departing members. Some are leaving by choice. Others failed to win
their bids for reelection.

From the crowd that wanted to come back but lost, there`s Arizona
Republican Ben Quayle, who brought us this gem of a campaign ad in 2010.

(BEGIN VIDEO CLIP, CAMPAIGN AD)

REP. BEN QUAYLE (R), ARIZONA: Barack Obama is the worst president in
history. Somebody has to go to Washington and knock the hell out of the
place. My name is Ben Quayle, and I approve this message.

(END VIDEO CLIP)

SMERCONISH: This time around, Quayle faced a primary challenge due to
redistricting and didn`t make it to the general.

Joe Walsh and Allen West also got the boot. They haven`t been strangers to
the HARDBALL "Sideshow."

(BEGIN VIDEO CLIP)

REP. JOE WALSH (R), ILLINOIS: Don`t blame banks and don`t blame the
marketplace for the mess we`re in right now. I am tired of hearing that
crap. You know what? This just pisses me off. Too many people don`t
listen. I need more coffee.

REP. ALLEN WEST (R), FLORIDA: I believe there`s about 78 to 81 members of
the Democrat Party that are members of the communist party.

It`s Called The Congressional Progressive Caucus.

(END VIDEO CLIP)

SMERCONISH: Now to some senators who opted not to run for reelection. Jon
Kyl of Arizona. Do you remember this?

(BEGIN VIDEO CLIP)

SEN. JON KYL (R-AZ), MINORITY WHIP: If you want an abortion, you go to
Planned Parenthood, and that`s well over 90 percent of what Planned
Parenthood does.

(END VIDEO CLIP)

SMERCONISH: That 90 percent figure is off by only 90 percent, as a Kyl
aide more or less admitted later, saying -- quote -- "His remark wasn`t
intended to be a factual statement."

On to North Dakota, Democrat Kent Conrad, who is retiring and taking his
dog Dakota with him. According to "The New York Times," "Dakota was often
toted around by a staff member who tried valiantly to maintain his dignity
as he cuddled the fluffy pet while its owner voted."

Texas Republican Kay Bailey Hutchison, also retiring from the Senate, will
no longer be seen strolling the halls accompanied by that day`s purse boy.
That`s the nickname given to the aides who were tasked with following the
Texas Republican around carrying, believe it or not, her purse.

And can`t forget about South Carolina`s Jim DeMint, who`s peacing out to
make money and run the Heritage Foundation, a conservative think tank.

Finally, Massachusetts Democrat Barney Frank, the outgoing congressman who
we will remember for his total honesty in any situation, even here when he
took to the House floor during a debate about air travel costs for then-
Speaker Nancy Pelosi.

(BEGIN VIDEO CLIP)

REP. BARNEY FRANK (D), MASSACHUSETTS: I just want to explain I hadn`t
really been expecting to be here, but, as I was walking by, I thought I
heard someone yelling, the plane, boss, the plane, and I wanted to come in
and see what was happening.

(LAUGHTER)

(END VIDEO CLIP)

SMERCONISH: Thank you for the memories. We will miss some of you.

Up next: Why did House Republicans wait so long to vote on Hurricane Sandy
relief? Could it be that a party that`s mostly Southern and rural doesn`t
care about the people in the mainly Democratic Northeast?

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

AMANDA DRURY, CNBC CORRESPONDENT: I`m Amanda Drury with your CNBC "Market
Wrap."

Well, what a comedown for Wall Street after yesterday`s big rally, stocks
sliding today after the release of minutes from the latest Fed meeting
showing disagreement on how long quantitative easing will continue, the Dow
losing 21 points, the S&P losing three points, and the Nasdaq dropping
about 12.

U.S. auto sales rose 9 percent in December, though, and analysts say it
could be the best year in sales since before the recession.

And that is it from CNBC -- now it`s back over to HARDBALL.

(BEGIN VIDEO CLIP)

REP. PETER KING (R-NY), HOMELAND SECURITY COMMITTEE CHAIRMAN: The fact is
this dismissive attitude that was shown last night toward New York, New
Jersey, I can`t imagine that type of indifference, that type of disregard,
that cavalier attitude being shown to any other part of the country.

(END VIDEO CLIP)

SMERCONISH: Welcome back to HARDBALL.

That was Long Island Republican Congressman Peter King earlier this week
outraged by the delayed vote for Sandy storm relief funds. Blue state
Republicans charged the Republican-led House with postponing the vote
because of bias toward their home states.

And, in fact, Northeastern Republicans like King are a dying breed. Back
in the 90th Congress -- that was 1967-1968 -- there were 47 House
Republicans in the Northeastern United States, in today`s new 113th
Congress, just 26.

Can the GOP remain a relevant party if it becomes increasingly
conservative, rural, and Southern and appears to only care about their own?

Eugene Robinson is a columnist nor "The Washington Post" and an MSNBC
political analyst. Susan Milligan is contributing editor to "U.S. News &
World Report."

Eugene, I have a quicken-and-egg question for you.

(LAUGHTER)

SMERCONISH: What drives the divide within the Republican Party, geography
or ideology?

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Good question. I think it`s the
chicken-and-egg answer, which is that I don`t know. One drives the other
drives the other drives the other.

Initially, the Republican Party became a Southern party through the
Southern strategy pioneered by Lee Atwater years and years ago. And that
became kind of self-perpetuating. And, of course, as state legislatures
started turning, Republican seats got gerrymandered into safe Republican
seats.

So there are a lot of factors there, but basically we`re at a point now
where the red states get redder and the blue states get bluer.

SMERCONISH: Susan, a lot of self-sorting at both ends of the spectrum I
think is Eugene`s point. What accounts for that?

SUSAN MILLIGAN, "U.S. NEWS & WORLD REPORT": Well, first of all, I think
people are self-selecting their communities, where not only states, but
jurisdictions are getting redder and bluer, and that`s reflected in
Congress.

But I think there`s something else happening here, too, with immigration
and with just, you know, just the racial breakdown of the country, the
demographics. I think there`s sort of more and more of a resentment from
some of these parts of America that a lot of people in the media used to
call real America against these areas that are, you know, more ethnically
diverse, more African-Americans, more Latinos, states that want gay
marriage, that they perceive as liking big government.

And it all gets rolled up into one big mass. And I think that Peter King
has a point, where there`s a sense that the Northeast and New England is
sort of this alien part of the country that doesn`t live the way people
think that real Americans should live.

SMERCONISH: On that note, let me show you something else. Congressman
King and New Jersey Governor Chris Christie were outraged for what they saw
to be this anti-Northeastern bias, and here is some of what they had to
say.

(BEGIN VIDEO CLIP)

KING: Republicans have no trouble finding New York when it comes to
raising money. And I would just say anyone from New York and New Jersey
who contributes one penny to congressional Republicans after this should
have their head examined.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: New Jersey and New York are
perennially among the most generous states in the nation to our fellow
states. We vote for disaster relief for other states in need. We are
donor states, spending -- sending much more to Washington, D.C., than we
ever get back in federal spending.

Despite this history of unbridled generosity, in our hour of desperate
need, we have been left waiting for help six times longer than the victims
of Katrina, with no end in sight.

(END VIDEO CLIP)

SMERCONISH: Eugene, read the tea leaves for me. What -- what is the real
explanation as to this fumble on the part of the Republican leadership in
the House? Was it a scheduling snafu or was it some inherent bias?

ROBINSON: Well, you could call it bias. I think John Boehner was just
nervous about bringing up a bill that some of his more rural and
conservative members would have a question about right after the fiscal
cliff deal.

And I think he was, frankly, worried that today`s vote might have turned
out differently, today`s vote for speaker might have turned out differently
had he done that right then. And so, you know, you can say it`s arguable
that certainly for self-preservation that was a smart thing to do, but it
clearly reinforced this feeling on the part of some -- the few remaining
Northeastern Republicans that they are the stepchildren of the party, and
that, you know, they`re trying to get elected in what are pretty -- pretty
blue jurisdictions, and they`re not getting any help.

SMERCONISH: Well, here is something that will underscore that thought,
Susan.

Republican Congressman Tom Price of Georgia, a conservative that "The
National Review" last month called Boehner`s biggest threat, told WMAL
Radio yesterday that the Northeastern Republicans were to blame for what
many conservatives believe was a bad deal to avert the fiscal cliff.
Listen to what he said.

(BEGIN AUDIO CLIP)

REP. TOM PRICE (R), GEORGIA: The vote is really fascinating. If you look
at the votes that were yes on the Republican side, there were 85 of them,
and 70 of them come from blue states. So I really think -- and I have been
talking about this for a couple months now -- I think this is a red
state/blue state issue.

When we were talking about previous -- quote -- "solutions," it really
broke down in our conference between those Republicans who were from red
states and those who were from blue states. It`s a different conversation
that we need to have within our own conference as we move forward with the
kinds of positive solutions that I think are out there.

(END AUDIO CLIP)

SMERCONISH: In other words, Susan Milligan, he`s castigating within his
own party those who are coming from blue states.

MILLIGAN: Yes. And it`s interesting.

There`s always -- there`s always been regionalism in Congress. It`s
usually been around energy issue, with sort of coal state people vs. oil
state people and so forth, but this has -- this is a spending issue that
becomes more ideological and even cultural than even just fiscal.

So, you know, they look at the Northeasterners and think they`re big
spenders. Usually, with something like disaster aid, that kind of stuff is
put aside. I mean, as he -- as Congressman King pointed out, it took six
days for them to vote -- excuse me, 10 days to vote for that aid for
Katrina, and it`s been two months. And, yes, Speaker Boehner I think was
concerned, you know, that he couldn`t ask his caucus to vote for this right
after they voted for that fiscal cliff.

But I think, you know, some of the Democrats I talked to today on the Hill
said or the Northeasterners said he could have had this vote, you know, a
month and a half ago.

SMERCONISH: Eugene, could we having a similar conversation about the
composition of the Democratic Party, meaning the members of the House?

ROBINSON: No, I don`t think so. Actually, Democrats have been remarkably
united. Recall in the previous Congress before Boehner took over, Nancy
Pelosi got stuff done and continues to keep the Democratic Caucus really
quite united. So, no, we couldn`t have that same conversation right now.
Maybe at some future date, but now.

SMERCONISH: A political piece titled "The Rage of the Northeastern GOP"
caught our eye today because it brings up an important point following the
Sandy funding fight this week. Quote, "Regardless of how the debate plays
out, you can bet the issue will be revisited in 2014 when every House
Republican holding a storm-damaged district will be attacked for the delay.
And the Northeast will again be the first place the Democrats will look to
in their efforts to find vulnerable GOP targets."

Susan, do you think that that`s true, that a road map is being provided now
to the Democratic Party for what`s to come in the midterm?

MILLIGAN: Absolutely. When the Republicans had a majority in the Senate
and how they built their majority in the House, it was through the
Northeast. And, you know, they lost two seats in New Hampshire in this
last election. They lost a Senate seat in Massachusetts. They lost a
Senate seat in Maine, and they can`t keep majorities or build a majority in
the Senate unless they open up a little bit more.

Look, the Democrats did this out West. They ran pro-gun Democrats out West
because they knew that was the only way they could get seats out there.
You can`t be that doctrinaire and get or keep the majority.

SMERCONISH: Thank you for your analysis. Eugene Robinson and Susan
Milligan, we appreciate it.

MILLIGAN: Thanks.

ROBINSON: Thanks.

SMERCONISH: Up next, on the day the children from Sandy Hook Elementary
went back to school, the newspaper that published the names and addresses
of local gun permit holders wants to name more. And a public official whom
you`ll meet says no way. The First Amendment meets the Second Amendment,
that`s ahead.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SMERCONISH: The first day of the 113th Congress also marks the return of
Illinois Senator Mark Kirk. Senator Kirk suffered a stroke last January,
but today, he returned to Congress and climbed the 45 steps of the United
States Capitol. Kirk, a Republican who first came to the Senate in 2010
after winning a special election to fill out the last few months of Barack
Obama`s term, and then he won his own Senate seat beginning in 2011.

We`ll be right back.

(COMMERCIAL BREAK)

SMERCONISH: We`re back.

For the first time since the massacre at Sandy Hook Elementary School in
Newtown, Connecticut, students returned to classes today albeit at a
different school in a neighboring town.

Meanwhile, in nearby Westchester and Rockland Counties, suburbs of New York
City, a controversy has erupted over the decision by a local newspaper to
publish an interactive database of all residents with handgun permits.

Here`s what that map looks like on their Web site. Each red dot indicates
someone with a handgun permit and if you click on one, it shows that
person`s name and address. Now, the move sparked outrage by many, not just
in suburban New York, but around the country.

The newspaper, "The Journal News", defended itself in a statement saying,
quote, "We knew publication of the database would be controversial, but we
felt sharing information about gun permits in our area was important in the
aftermath of the Newtown shootings."

In nearby Putnam County, officials refused to hand over information about
handgun owners to the paper despite New York law saying that information is
part of the public record.

Maryellen Odell is the Putnam County executive. Mark Green is a radio talk
show host and former public advocate of New York City.

Ms. Odell, if I were to walk into the office where those records are kept
as a citizen of that community, I imagine I`d get access to them. So why
shouldn`t that same right extend to the local newspaper?

MARYELLEN ODELL, PUTNAM COUNTY, NY EXEC.: Well, it`s a little bit --
that`s not really I think a fair example of what we`re trying to argue
against today. You know, we`re really looking at this as a privacy issue.
We`re looking to make sure that our constituents` safety is primary. It`s
paramount to us in Putnam County.

You know, we have a lot of -- most of our residents are law enforcement or
first responders. We have a lot of veterans and, you know, we want to make
sure that their families are safe and themselves, that they`re not put at
risk because of this.

SMERCONISH: If --

ODELL: And I just want to say on the other side to this, it`s not just
about those who follow the process and who legally have obtained, you know,
pistol permits. We`re talking about those individuals, our residents, who
choose not to have a weapon at home. And we feel that this release of this
database actually compromises their safety.

SMERCONISH: Would your success compromise other sunshine law provisions?
I mean, the access we all enjoy to property tax records or political
contributions or Megan`s Law, by way of example? If you`re successful,
might people now take a look at other in the Internet age in which we live,
other laws of access and say, maybe we should do away with this or that?

ODELL: Well, it`s interesting, you know, when you take a look at this, the
reason why I think that this has become such a heightened issue is just
because of the times we`re at. You know, social media now, the access of
the Internet that affords people quick information, and that`s why we feel
that our residents would be put at such a risk should their names and
addresses be released in addition to those who are not.

And, you know, really what we`re saying here is, this law is a law that
could be, should be modified to just make sure that our residents, their
families, their concerns are put first.

SMERCONISH: Mark, what do you make of this? "The New York Times", just to
show you a deep of opinion, wrote about the controversy and then was
swamped by reader reaction. One person who supported the paper`s move
wrote, quote, "We who chose not to own guns have the right to know when we
are sending into a house where guns are present, or when we`re speaking
with someone who has deadly force easily within reach."

On the other hand, somebody else wrote, "Yes, the records are public, but
most criminals are not going to be online looking to see if a particular
address has an owner with a gun. It`s nobody`s damn business if I own a
gun."

Sort it out for me.

MARK GREEN, FORMER NYC PUBLIC ADVOCATE: Well, it is a neighbor`s interest
if -- even if a law-abiding person has a person, has a gun, Adam Lanza
stole the gun from his mother who, of course, he then killed. So, the
issue is, if we have -- I`m a lawyer, I`m a believer to the right to
privacy.

This is in the public domain. The information is publically filed. Of
course, the newspaper had a right to publish public information. The
question is issue, was it right, as a matter of judgment, for them to do
it? If we have a Megan`s Law, because and I think everybody might agree,
that if you`re a convicted child molester, a neighbor might want to know
that because they`re in their own home safe, but maybe they could hurt
someone else. There`s a spillover effect.

Same thing with guns. There may be people who think the more concealed
weapons, the better, fine. Live in Texas and Florida.

SMERCONISH: Mark, there are apps, because my kids have shown them to me on
my iPhone where, you know, you can put in your geographic area, it brings
up every perp within miles. Theoretically, people want who want to know
whether there are gun owners in their area -- and I`m not equating perps
with gun owners.

ODELL: Well, thank you with that.

SMERCONISH: They ought to have the same ability. Maryellen, you want to
respond to that?

ODELL: Yes, I don`t think that it`s fair to compare someone who legally
obtains a pistol or a permitted handgun in their home and took the time to
do the training and made sure and followed through compliance and was
vetted to the process to someone who`s a convicted sex offender.

SMERCONISH: I`m not conflating one with the other. Here`s a better
example. A better example is if I wanted to take a look at the political
contributions of all of my neighbors and if they wanted to take a look at
mine, they could easily do so because I`ve made lawful confirmations and so
have they. All above aboard, that same access point.

ODELL: I think it`s comparing apples to oranges here really. And, you
know, what we`re really saying here is we took an oath, we swore my elected
officials, colleagues, county clerk, myself, Senator Greg Ball, Assemblyman
Katz, to uphold the law.

What we`re asking here is for people to look into how this invasion of
privacy, if you will, can put our residents and their families at risk and
at harm. You know, we have a lot of first respondents and law enforcement.
We have --

(CROSSTALK)

SMERCONISH: Very quickly, Mark, take the final world. I only have 30
seconds. Go ahead and I`ll give it to you.

GREEN: Look, people who live around it feel at risk. It`s not that
they`re law-abiding and got a permit. Fine, Adam Lanza didn`t get a
permit. If we publish private donations because it could buy congressman,
if we publish where sex offenders live -- well, then, as a neighbor, I want
to know how many handguns are in my area, which could be stolen and put at
risk my family.

SMERCONISH: To be continued. I have to shut it down. It`s a great
debate.

GREEN: The law requires it be made public. Change the law.

ODELL: Yes.

SMERCONISH: Maryellen Odell, thank you for being here.

Mark Green, we appreciate your time.

GREEN: Thank you.

ODELL: Yes, you bet. Thank you.

SMERCONISH: When we return, allow me to finish with an update on the Penn
State scandal, and a case of hardball politics.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SMERCONISH: Let me finish tonight with an update about Penn State.

Last June, Jerry Sandusky was convicted of those 45 of 48 counts that he
faced involving 10 young victims. And then last July, the NCAA, relying on
the investigation by former FBI director Louis Freeh, fined Penn State $60
million. Penn State did not appeal, and, at the time, Pennsylvania
Governor Tom Corbett, a member of the board of trustees, also accepted the
decision by the NCAA.

Well, yesterday, Corbett filed a lawsuit against the NCAA for what he now
calls over-reaching and unlawful sanctions placed on Penn State, and he
seeks to set aside the $60 million fine.

But is the lawsuit really a case of hardball politics?

Here are few considerations: First, Corbett is up for election in 2014 and
right now, his poll numbers are poor. Penn State fans, they`re an
important part of the Pennsylvania electorate.

Second, Corbett didn`t consult the newly-elected attorney general, Kathleen
Kane. Instead, he hired an outside law firm.

Third, when Kane takes office in two weeks, it`s expected that she`ll
deliver on a campaign promise to investigate why the Sandusky
investigation, which was begun by Corbett in 2008, took so long.

As Buzz Bissinger noted in today`s "Daily Beast," Kane insists that in
normal circumstances, a predatory animal would have been arrested after the
first allegation was proven to be founded. That would have gotten Sandusky
off the street and nothing would have precluded the state police from
further investigation. But instead, a grand jury was empanelled. It went
on for more than three years, which kept the predatory animal free to
attack until his arrest.

Fourth, Bissinger also pointed out that Corbett took close to $220,000 in
gubernatorial campaign donations from board members of the charity started
by Sandusky. In the meantime, there were all of two state investigators,
some even say it was just one, assigned to the case of that predatory
animal until Corbett became governor in 2011. And it was only afterwards
that the investigation into the scope it always deserved.

Finally, many legal experts are opining that the lawsuit is unlikely to
succeed. Lester Munson at the ESPN today noted that the only legal theory
is based on antitrust laws that govern monopolies that use their powers to
fix prices or to manipulate markets. The NCAA, it might be a monopoly, but
it doesn`t appear to be conspiring to manipulate any market.

A winning lawsuit or a political missive? Voters will be the ultimate
jury.

That`s HARDBALL for now. Thank you for being with us.

"POLITICS NATION" with Al Sharpton starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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