updated 6/9/2004 12:57:25 PM ET 2004-06-09T16:57:25

Guests: Sean McCormick, Richard Allen, Dana Rohrabacher, Martin Anderson, Theodore McCarrick

CHRIS MATTHEWS, HOST:  A country in mourning prepare to say farewell to the chief as Washington readies itself to host Ronald Reagan‘s state funeral, the country‘s first since Lyndon Johnson. 

Inside the Reagan revolution with its closest friends and advisers, Richard Allen, Martin Anderson, and U.S. Congressman Dana Rohrabacher, remembering Reagan. 

A HARDBALL special report.

Good evening.  I‘m Chris Matthews. 

Nearly 60,000 people have paid their respects to President Reagan as he lies in repose at his presidential library in Simi Valley, California. 

Tomorrow, formal services begin here in Washington.  And the former president will lie in state after a funeral procession to the U.S. capitol. 

This hour we‘ll pay tribute to President Reagan, and we‘ll be joined

by his aides and close friends. 

But we begin at the G-8 summit where President Bush sought to build support for his policies in Iraq.  NBC News White House correspondent David Gregory is traveling with the president.  And he joins us now from Savannah, Georgia—David. 

DAVID GREGORY, NBC NEWS CORRESPONDENT:  Well, good evening to you, Chris. 

A major breakthrough for the administration today.  The United Nations late this afternoon unanimously approving a new resolution that endorses the interim Iraqi government. 

It‘s a resolution the administration has been working for for some time now, overcoming some differences with their nemesis when it comes to Iraq, France and Germany, on the Security Council.  But they bridged those differences this time around. 

And for the first time in two years when it came to Iraq, you saw international agreement, unanimous international agreement, on a way forward for Iraq. 

As you know, this resolution endorses the Iraqi interim government.  It sets a timetable for elections in Iraq, beginning in January of next year.  It also frames the security agreement between the coalition and the interim Iraqi government. 

It says that there is an authority there for the multinational force led by the United Nations to remain there in Iraq.  But it also specifies that this interim government, after the handover on June 30, can ask those forces to leave. 

The big issue, of course, had to do with who gets the final say over military operations in Iraq where security is still the No. 1 concern.  That authority rests with the United States.  Even though there will be a sovereign Iraqi government, they will not have a veto power over U.S.  troops. 

That was a big sticking point.  The U.S. did not budge in all of this. 

So while there are major difficulties that remain, the White House is embracing this moment tonight, Chris. 

MATTHEWS:  Does the U.N. in this action through the Security Council members, are they going to actually create this government of Iraq?  In other words, is Iraq going to be a member of the U.N.?  Is it going to be recognized, this interim government, as a true country?

GREGORY:  Absolutely.  Will be recognized as a true country.  Already had substantial input into this Security Council resolution. 

Part of this resolution includes in the annex portion, an exchanged of letters between the coalition and the Iraqi prime minister, specifying how the two will interact with each other over security decisions.  So it‘s already been a major player. 

And for the first time now, after the administration was cool to the idea of the United Nations playing a lead role in Iraq, now that‘s changed. 

This administration wants the international community to have a huge footprint in Iraq, to set up shop there, in effect; to put these elections together; to put a real governmental infrastructure in constitutional process together so that Iraq can begin to run itself and so that the U.S.  can begin to lay the plans for its own exit. 

MATTHEWS:  You mentioned footprints.  Will there be boots on the ground? Will we have fellow soldiers over there with other countries‘ uniforms on them, taking shots at them, just as well as our soldiers getting shot?  Will we have help over there of a military type?

GREGORY:  We‘ve got the help that we‘ve had all along from Great Britain, from Italy, from other countries in Europe who have a much smaller presence—don‘t be fooled here—than the United States, which will retain 138,000 troops. 

The big question that comes out of this resolution is will France and Germany and other powers with significant militaries and even NATO, will they make greater contributions to the effort there.  The answer from administration officials is no, we don‘t expect that. 

So there‘s no great change.  The United States is still going to be largely alone in Iraq.  This resolution help this administration keep the allies it‘s got.  It hopes that it can use the resolution to attract other support.  Maybe the French, maybe NATO will help train Iraqi troops, security forces, police forces.  That‘s what they need now.  They also need financial assistance. 

There are skeptics who view this resolution as a good thing, to be sure.  But they asked the question that you just asked, which is what‘s it going to turn into at the end of the day?  Will there really be some concrete support?

Even John Negroponte, who‘s going to be the new ambassador in Iraq for the United States, said it‘s now time for the international community to step up and back a lot of their advice with some concrete action.  We don‘t know what form that‘s going to take yet, Chris. 

MATTHEWS:  Is France any more favorable to our invasion of Iraq than it was a week ago?

GREGORY:  Absolutely not.  And despite the fact that France stood up beside the United States to say we‘ve been allies for 200 years, and we can bridge these differences, the truth is, when pressed, and I pressed President Chirac on this point during a press conference in Paris. 

He made it clear that he thinks the difficulties are not behind us when it comes to Iraq.  And it‘s still in a precarious position, that he never believed there were weapons of mass destruction, that despite the fact that he supported resolution 1441, calling on Saddam to disarm. 

So when pressed, the French will make it very clear that they are not over this bitter disagreement with the U.S., that they believe the U.S. did the wrong thing here.

And the U.S. has basically low expectations from the French.  The president said he wants the French to forgive debt, to forgive Iraqi debt, to provide some consult. 

The biggest thing that the French did when it came to this resolution was get out of the way and support it.  And this administration doesn‘t count on a whole lot more from the Chirac government at this point in time than that. 

MATTHEWS:  OK.  Thank you very much.  NBC‘s David Gregory, who‘s down in Savannah. 

Sean McCormick is a National Security Council spokesman.  He‘s also deputy assistant to the president of the United States.  He joins us now, also from savannah. 

Run through this big problem with going to war: France, Germany, Russia.   Are any of those countries ready to help us in the field, Sean?

SEAN MCCORMICK, NATIONAL SECURITY COUNCIL SPOKESPERSON:  Well, I think, Chris, what‘s most important about the question of security on the ground in Iraq is getting more Iraqis taking responsibility for their own security. 

We‘re working actively with the Iraqis, and we would encourage other states—Germany, France, Russia, and any others—to help with training or in any other way.  But what we hope is that more and more, we see Iraqis taking responsibility for their own security. 

MATTHEWS:  Let me ask you about the problem facing this country.  It‘s a bloody campaign.  We‘ve lost maybe—we‘re going to lose maybe by the end of the year, the way things are going, a thousand people over there and thousands of seriously injured, amputated people.

How does the rest of the world begin to share in this bloody business of occupying Iraq?  Why can‘t we get the French, the Russians, the Germans, the big powers of the world to join us in this effort if they believe in it at all?

MCCORMICK:  Well, Chris, we‘re going to leave to it other nations to contribute in the ways that they see fit.  Many nations have contributed military forces and have shared in our loss.  They have made the sacrifices for freedom in Iraq.

And right now, what we hope is that the Iraqi people and the Iraqi military forces will step up and share that burden in protecting freedom in Iraq. 

The French, the German and the Russians are also making contributions elsewhere in the war against terrorism.  Let‘s not forget about Afghanistan, where the Germans and the French have made substantial contributions and, again, have shared in the loss, fighting for our freedoms. 

MATTHEWS:  What I‘m taken with is the president‘s very optimistic language.  And we love optimists.  We love Ronald Reagan‘s optimism, Sean.

But let me read you a line from the president‘s statement today. 

“These nations”—the Security Council nations, the G-8 nations—

“understand that a free Iraq will serve as a catalyst for change in the broader Middle East, which is an important part of winning the war in terror.” 

If they really do believe that, they would have said so.  They haven‘t said so through any action, did they, that they believe in our cause of Democratizing the Middle East, starting with Iraq?

MCCORMICK:  Well, I think, Chris, first of all, I think what you‘ve seen is a unanimous support for the U.N. resolution, which I think indicates the seriousness with which they understand the admission in Iraq is at hand. 

What—They are going to try to help out.  They understand that an Iraq, Democratic, free and stable, in the heart of the Middle East, is good for the world and good for the region.  And that‘s why we saw the 15 to zero support.

MATTHEWS:  Let me ask you about this nuclear thing.  What is happening on the nuclear front, in terms of proliferation in the world right now, as a result of the G-8 meeting?

MCCORMICK:  Right now, Chris, what we‘re going to be doing is we‘re going to be expanding the Proliferation Security Initiative, which has been quite a success.  It‘s really the program that led to the Interceptive, the ship that was headed to the Libya with all those nuclear parts, and which eventually led to Libya deciding to give up its weapons of mass destruction. 

What we‘re also going to see is an expansion of our efforts to secure former WMD technology and the scientists and facilities in the former Soviet states, an initiative that was begun at Cananascus (ph).  We refer to it as 10 plus 10 over 10. 

MATTHEWS:  How would this have related to a war with Iraq?  Could we have stopped or intercepted nuclear weaponry and material getting to Iraq through this new regime we‘re talking about today?

MCCORMICK:  Well, Chris, it‘s impossible to say, as we didn‘t have that regime at the time we had sanctions in place.  But remember, that sanctions regime was falling apart.  Colin Powell referred to it as a sanctions regime full of Swiss cheese. 

So when you have a sanctions regime, you need rules but you also the will to enforce it.  And it was very clear that the will wasn‘t there to enforce it over time. 

MATTHEWS:  Let me ask you to try to assess this, and I know this is tricky politically.  Just say no if you can. 

Is there any change in the French, German and Russian mood since we started the war with Iraq?

MCCORMICK:  Well, I think—I think, Chris, what you‘ve seen is that this is a return to unity on the question of Iraq.  This is allies pulling together. 

We had our differences.  They‘re well documented.  You‘ve reported on them yourselves.  But what we see—what we see today with the vote in the U.N. is allies coming out united, because they understand the seriousness and the importance of Iraq. 

MATTHEWS:  OK.  Thank you.  It‘s great having you on.  It‘s great having you on HARDBALL.  Please come back.  Sean McCormick, assistant to the president. 

Coming up, remembering President Ronald Reagan with former Reagan National Security Adviser Richard Allen.  He‘s got a great story to tell.  I‘ve heard it from him, but you‘re going to hear it from him in a minute.

Congressman Dana Rohrabacher from California, a man who really became a Reaganite as a young man, and Martin Anderson, one of the real thinkers behind the Reagan administration. 

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, remembering President Reagan.  We‘ll be joined by former Reagan National Security Adviser Richard Allen when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS:  As you can see, the president‘s body is still lying in repose for the second day at the Reagan Presidential Library out in California.  Tomorrow, his body will be flown to Washington here, where it will lie in state at the rotunda of the U.S. capitol, as have so many other presidents. 

Joining me right now is Richard Allen, who served as Ronald Reagan‘s national security adviser from 1981 to 1982. 

Richard, it‘s great to have you on.  And the reason I say this, because you and I had a lunch one day and you told me this wonderful story about how you decided to commit yourself to working for Ronald Reagan‘s election to the presidency. 

Could you tell that story?  It had to do with his philosophy about the Cold War and how it should end. 

RICHARD ALLEN, FORMER NATIONAL SECURITY ADVISER:  Well, it‘s sort of a personal story, Chris. 

I‘d gone out.  I helped the best could I working through Marty Anderson, who‘s going to be on this show shortly in 1976.  And I was also the author of the foreign policy platform. 

And after Reagan lost to Ford and Ford lost to Carter, the first two days of the Carter administration, I saw Ronald Reagan.  And we—I was asking him to come to New Jersey to do some fundraisers for me and write some fundraising letters because I had the intention to run for governor of New Jersey, my home state. 

And when I went out there to see him, he said, “Well, yes, of course.  Yes and yes, I‘ll do the fundraisers and do the letters.  Now did you come all the way here to talk to me about that?”

And I said yes. 

He said, “Would you like to talk?  I‘ve got all day.” 

And I said, “Sure, I sure would like to talk.”  It was my first time really to have a one-on-one with this incredible guy. 

So we talked through lunch and Nancy Reagan got us some sandwiches.  And in the middle of the afternoon, he said, “Well, I guess you‘re going to go back.” 

And I said, “Yes, I‘m going back on the red eye.‘ 

He said, “Now I want to tell you my theory of the Cold War.  And some people say it‘s simplistic, but it‘s just simple.  And there‘s a big difference.”  And I nodded.  And he said, “My theory of the Cold War is that we win and they lose.  What do you think about that?”

Well, for a guy who had been spending most of his life fighting totalitarians and highly dissatisfied with the defective policies of detente under President Nixon whom I served, it was music to my ears. 

And I said to him, “Do you mean that?”

He said, “Of course I mean it.  I just said it.” 

And I went back to Washington on that red eye and dissolved that little committee that I had and paid my debts and gave back some money, I think.  And decided that I didn‘t know whether Ronald Reagan was going to run for president or not.  But anybody, any politician who would talk to me about winning the Cold War was a guy that I would support. 

So it just happened from 1977, ‘78, I went abroad with Peter Hannaford (ph).  And I took him to Europe and then to Asia and working with Marty Anderson and others through ‘78, ‘79, 1980.  It just sort of happened.  Like tar baby, you got stucker and stucker to this amazing man. 

MATTHEWS:  I‘ve told that story, thanks to you, so many times.  He just says to you, “How about we win and they lose?”

Let me ask you about how that departs from all the years of the Cold War.  The Cold War was begun in around ‘47, of course, with the Soviet grab of Czechoslovakia and Poland and all the rest of them, the dumping—putting in of the Lublein (ph) government in Poland and all that horrible stuff, trickery they did to keep control of Central Europe. 

But there was a feeling in the western side, certainly, the notion was that we would try to win by containment, that we would try to prove the Soviet system was a failure by avoiding a war.  Avoiding, of course, by then the possibility of a nuclear war through the ‘50s and ‘60s. 

Wasn‘t that a good policy for 10 or 20 years?  To try to avoid a nuclear war by containment?

ALLEN:  Sure it was.  Containment was the best we could do at the time after demobilizing.  We had, of course, Korea, a major send-up.  And we were bitterly experienced, and we didn‘t want to do anything else.  So containment worked. 

Where things began to break down in my view was the president—under President Nixon, and particularly under President Ford, with the theory of detente.  When I say theory, I mean it became a theology. 

And this is what Reagan really ran against in 1976.  He ran hard against the theory that detente would somehow reform the Soviets.  The theory is defective, because it implied that we had leverage on the Soviets by denying them trade aid and technology. 

And then we would pull the chain on them and we would alter their behavior.  It was a bankrupt theory, and he thought it was absolutely bankrupt. 

And so his idea was not just to manage the Cold War, but actually, to harness American strengths, American technology, American capital, American determination, and put it all together and see if we could not liberate the people of Eastern Europe by bringing about the collapse of communism.  I say Eastern Europe, I mean also the Soviet Union. 

MATTHEWS:  Did he smell weakness?

ALLEN:  It happened to work. 

MATTHEWS:  Did he smell weakness?  I mean, Daniel Patrick Moynihan, the senator from New York, once wrote a piece 10 years before it happened, smelling the defeat of the Soviets coming in the early 1980s. 

But did Ronald Reagan smell defeat and weakness on their side?

ALLEN:  He surely did, but he wasn‘t alone.  As you may—you probably know, Ronald Reagan was a great student, as Marty Anderson will tell you.  He read everything that he was ever given.  He was a prolific reader.  He was a researcher, and he was a writer. 

And among the menu of things that were served up to him, certainly during the time I was with him, were the writings of a lot of people who did sense this weakness.  And I think this was absolutely critical. 

That‘s why, for example, and this is forgotten and there‘s not much been mentioned.  Through the Committee on the Present Danger, which I happen to be a founding member.  Mostly Democrats, dissatisfied with Carter foreign policy and certainly with Nixon‘s foreign policy.  Formed a group designed to, among other things, stop SALT II.  You probably were with Tip O‘Neill at the time. 

MATTHEWS:  Right.

ALLEN:  It eventually worked, but it was not a partisan organization.  It was through Committee on the Present Danger that those Democrats, the real neo conservatives, came across to meet with Ronald Reagan and eventually, to go to work in his administration. 

That‘s the last time we‘ve had such a bipartisan experience in our government. 

MATTHEWS:  Yes, well, the neo cons were batting about 500.  They were right about the Soviets. 

Anyway, Richard Allen, we‘ll be right back when we return with the real expert on the Reagan foreign policy. 

And later, two former aides to President Reagan, Congressman Dana Rohrabacher and Martin Anderson, join us with their memories.

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(COMMERCIAL BREAK)

MATTHEWS:  I‘m back with former Reagan national security adviser

Richard Allen.  You know, it seems, Richard Allen—Mr. Allen, it seems

that the interesting thing about Reagan is he had a small ideological

opposition to SALT 2, which was giving away the store.  It set no limits on

·         very broad limits on Soviet expansion of their missile deployment and production where it set strong ones on ours. 

What‘s interesting that about Ronald Reagan, although he had a strong philosophy about winning the Cold War.  It was very subtle in how he did.  Talk about the way that he kept the deal with Europe in term of missiles.  The restraint he showed with the 007 incident with regard to far Eastern Russia.  When the Korean plane was shot down.  He was pretty subtle in a way, I thought. 

ALLEN:  Well, of course, he was subtle.  And he always knew what he wanted and where he was in the—in the progression to his objectives. 

But it‘s really important to recognize that Ronald Reagan, although he armed in 1981, restored America‘s armed might, was at heart basically a disarmer.  And some would say, a dangerous disarmer. 

Coming out of the hospital, or while still in the hospital after being shot on March 30, 1981, he penned a letter to Brezhnev and sent it down to me.  I looked at and it made a few suggestions and sent it back. 

It went to Brezhnev but it was utterly ignored.  It was dismissed by Brezhnev.  That was a terrible mistake, because what he was asking was for Brezhnev to sit down with him and begin negotiation on a whole range of issues. 

Reagan then said, “It‘s not an arm race that I want, but I wasn‘t to know that we‘re not going to lose it if there‘s going to be one.”  As a consequence, he armed. 

He knew—he had a sense of timing and purpose.  The same was true of the double track decision, the deployment of Persian and Cruise missiles which caused the hundred of thousands to come into the streets.  He knew where he was going and what he wanted. 

MATTHEWS:  It‘s great having you on, Richard Allen.  Thank you very much.  Ronald Reagan‘s former national security adviser. 

Up next, a look at Reaganomics. 

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  This half-hour, the Reagan legacy, how Reaganomics pulled America out of recession.  Plus, personal tributes to the former president by two men who worked for him, Congressman Dana Rohrabacher and Martin Anderson. 

But, first, the latest headlines right now. 

(NEWS BREAK)

MATTHEWS:  Welcome back to this HARDBALL special report. 

As the nation remembers Ronald Reagan, we‘re looking back on his entire legacy.  There was a great debate over the policy of his big tax cuts, big deficits which resulted, and, of course, those high interest rates in the early part of his term.  Did he fix the economy or simply boost it? 

HARDBALL correspondent David Shuster reports. 

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE:  I Ronald Reagan do solemnly swear...

RONALD REAGAN, PRESIDENT OF THE UNITED STATES:  I Ronald Reagan do solemnly swear...

DAVID SHUSTER, NBC ELECTION CORRESPONDENT:  When Ronald Reagan took office in 1981, inflation was at 10.5 percent and America‘s economy was reeling. 

REAGAN:  I regret to say that we‘re in the worst economic mess since the Great Depression. 

SHUSTER:  For Reagan, the answers were policies that were bold and often controversial.  On taxes, he lowered the top marginal income rates from 70 percent to 50 percent and then 28.  He also initiated huge increases in military spending.  He embraced government deregulation and eased up on corporate and environmental restrictions. 

The president also set the tone for union busting by threatening and then firing the nation‘s air traffic controllers. 

REAGAN:  I must tell those who fail to report for duty this morning, they are in violation of the law and if they do not report for work within 48 hours, they have forfeited their jobs and will be terminated. 

SHUSTER:  In the end, eight years of Reaganomics did bring inflation down from 10.5 percent to just 4.  Unemployment dropped from 7.4 percent to 5.4.  Mortgage rates fell from 13.2 percent to 9.  And the Dow Jones industrial average nearly doubled, going from 950 to more than 1800. 

But there was a downside.  The Reagan boom was built on borrowed money.  The Reagan administration tripled the budget deficit from $77 billion in Jimmy Carter‘s last year to $231 billion in Reagan‘s last year.  And despite a pledge to cut down the size of government...

REAGAN:  It is my intention to curb the size and influence of the federal establishment. 

SHUSTER:  ... the federal civilian work force actually grew up.  Meanwhile, programs for the poor were slashed, poverty, illiteracy and drug use all went up, and the gap between rich and poor in America got wider. 

(on camera):  To this day, Nobel Prize-winning economists are still divided over Ronald Reagan and are split over his legacy of both massive government debt and national economic expansion. 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  We‘re joined right now by two of President Reagan‘s former aides.  Congressman Dana Rohrabacher served as special assistant and speechwriter during the Reagan administration. 

And joining us by phone is Martin Anderson, who was a domestic and economic policy adviser from ‘81 to ‘82.  He co-editor of the book “Reagan:

A Life in Letters.”

Let me start with Martin Anderson. 

Mr. Anderson, what is the enduring Reagan legacy?  What works today that he taught us? 

MARTIN ANDERSON, FORMER REAGAN DOMESTIC ADVISER:  I think what it is, it is what is called Reaganomics, but not many people know what Reaganomics is. 

It is not just cutting taxes.  It is not—especially not cutting taxes to raise money.  We used to call it the four pillars.  It‘s very simple.  One, you control spending.  Two, you keep tax rates low.  Three, you have reasonable regulation that is not excessive on the people.  And, fourth, very importantly, you have a strong system for keeping a sound dollar—for keeping a sound dollar.  You have a safe, predictable monetary policy.  Each one of those four are critical.  And that together makes Reaganomics. 

MATTHEWS:  What was the impact on the economy of the higher deficits that David mentioned? 

ANDERSON:  Well, those higher deficits, let me say one thing.  In the Reagan campaign, he always said one thing at the end.  If there ever is a choice between doing what is right for national security and running a deficit, I will run the deficit. 

And that is what happened.  We get into a situation where, when he was running for election, there were large, increasing surpluses.  And he proposed these tax cuts.  Then, when he got in there, the deficits started to rise.  All the economists were wrong, probably as usual.  And called in the top experts of the country, called in Alan Greenspan and Arthur Burns and Milton Friedman and all those people. 

And they all said, the best thing now is to go ahead with the tax cuts.  He deliberately did that, knowing what would happen, and continued to spend the right money on national security.  And I will say, in conclusion, he could have not spent what was necessary on missile defense and all those other things and we probably would have lost the Cold War.  And that would have been intolerable. 

MATTHEWS:  Let me try that by Congressman Rohrabacher. 

Congressman Rohrabacher, during the Reagan era, of course, we had rising deficits.  We had tax cuts.  We had regulatory reform.  We had tax cuts.  We had defense increases.  During the Clinton administration, we had balanced budgets, thanks to the president, and of course to Newt Gingrich‘s Congress.  But we had a balanced budget.  Now we‘re back into a Republican administration and we have deficits again.  Isn‘t a conservative someone who believes in balanced budgets?  And, if so, why do the Democrats have balanced budgets and the Republicans have deficits? 

REP. DANA ROHRABACHER ®, CALIFORNIA:  Well, let me note—I‘ll start off by noting the deficit under Ronald Reagan, I think it is unfair to say that he increased the deficit.  The fact is that, had Ronald Reagan‘s policies not been put into place and the increase in the deficit would have continued as it was right before he took over, instead, we would have had much larger deficits and we would have had high inflation and high employment—unemployment at the same time. 

So Ronald Reagan‘s deficits I do not believe were out of line in terms of what would have happened had his policies not been put in place.  Now, it is true we did not cut spending programs, as some conservatives would like to.  And that‘s where your report in the beginning is wrong.  Marty Anderson should be able to tell us.  What we did is not slash all of these programs.  We got control of the growth of the programs.

(CROSSTALK)

ROHRABACHER:  And then we reignited the growth of the economy.  So we got control of the growth of the programs and then the economy grew.  That way, we were able to have a reduction in the size of government as compared to the overall economy of the nation, which was what our goal was. 

And this idea that we were slashing in a very ruthless way or heartless way was just not the case. 

MATTHEWS:  No, I don‘t think so either.  In fact, I think the deficits of—what I want to ask you about is why did we have deficits under Republicans and balanced budgets under Democrats?  It seems so ironic. 

(CROSSTALK)

ROHRABACHER:  Well, it is clear in one thing, that we had deficits under Reagan, I believe, because the president was making an investment in peace.  He knew that, if we spent this money for defense now, that later on, we wouldn‘t have to spend it because we could bring peace to the world, which is exactly what happened, which permitted, of course, Clinton, the Clinton administration to cut defense spending and balance the budget. 

Now this president is faced with another international crisis and we are making an investment in long-term peace.  And, hopefully, after we are successful in overcoming this horrendous challenge of radical Islam, we will be able to not have to spend so much Money on defense again. 

(CROSSTALK)  

MATTHEWS:  Marty, I want to you respond.  Did we in fact cut spending, domestic social spending, under Reagan or not? 

ANDERSON:  No. 

Well, we did not cut it as much as we like.  If you look at the numbers, domestic spending increased substantially.  But the—look, the reason why what you say—and it is funny, except that you can balance the budget—and this is the way the Democrats do—by reducing national security, spending on national security, and increasing taxes.

MATTHEWS:  Yes. 

ANDERSON:  That‘s not the way conservatives would like to see the budget balanced. 

MATTHEWS:  Yes. 

ANDERSON:  That was the key here, because what Reagan was doing was spending what he thought was necessary on national security and at the same time reducing taxes to stimulate the economy.  And it worked. 

Look, it‘s like a person that says, I want to buy a house.  They‘re $300,000.  Should I save until I‘ve got the $300,000 and I‘m 72 years old?  Or should I buy the house and pay it off? 

(CROSSTALK)

MATTHEWS:  Well, you‘re talking to me. You borrow the money. 

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  You borrow the money.  I just didn‘t think that‘s what you called conservatism, that‘s all.  I‘m all for borrowing the money, getting the mortgage and buying the biggest house you can.  But how can you call that conservatism? 

ANDERSON:  But, Chris, we‘re talking about an investment in peace. 

MATTHEWS:  Right. 

ANDERSON:  And when Ronald Reagan invested this money in national defense...

MATTHEWS:  Right. 

ANDERSON:  ... it wasn‘t because we liked to see all this hardware being bought by the federal government. 

MATTHEWS:  Right. 

ANDERSON:  It‘s because it was going to bring about a more peaceful world. 

MATTHEWS:  Yes. 

ANDERSON:  And then we wouldn‘t to have spend so much money, which is exactly what happened.  Clinton wouldn‘t have been able to balance the budget during his years unless it was for Reagan‘s defense policies in the years before. 

MATTHEWS:  Well, this isn‘t the Clinton corner on this show, if you haven‘t noticed the last couple years. 

Let me ask tell you about—you know what‘s interesting.  I want to ask you all about working for the president, because you notice people smoking there in the Cabinet Room?  Boy, have times changed. 

We are coming right back.  More with Congressman Dana Rohrabacher of California and Martin Anderson, and later, Cardinal Theodore McCarrick, the archbishop of Washington.  What a good man.  You‘ll like him.  He‘ll be coming here with his memories of President Reagan.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, more memories of Ronald Reagan from Congressman Dana Rohrabacher and Martin Anderson.  Plus, Theodore McCarrick, the archbishop of Washington, on Friday‘s funeral service at the National Cathedral.

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(BEGIN VIDEO CLIP)

MICHAEL DEAVER, FORMER REAGAN AIDE:  I think it was that day in 1981 in January when we came off the inaugural stand.  And we went into the Oval Office, and just the two of us.  And he sat behind the desk and put his hands on top of the desk.  And he looked over at me and he said, have you got goosebumps?  And, I mean, he knew where he had come from.  And he knew how sacred this spot was to him. 

(END VIDEO CLIP)

MATTHEWS:  That‘s longtime Reagan aide and my pal Michael Deaver in an exclusive interview with NBC‘s Tom Brokaw.  What an interview that must be. 

We‘re back with Congressman Dana Rohrabacher and Martin Anderson. 

Dana, let me ask you about what it is like to work for a guy.  I was a speechwriter for a president.  You were certainly one for a great, successful president.  Did he ever say, this is malarkey; I can‘t use this?  Did he ever come back and say, this isn‘t me?  How did it work when you were submitting ideas?

(CROSSTALK)

ROHRABACHER:  Well, first of all, let me discuss, as mentioned, about the first time I went into the Oval Office as a speechwriter for the president.  I had worked in both of his campaigns, along with Marty Anderson. 

And I was ushered into the Oval Office with Maury Masang (ph), who was a speechwriting, and two or three researchers, happening to be young ladies.  And the first time you‘re in the Oval Office, there he is.  And he was looking at us and we were looking at him.  And time was passing.  And, boy,I said we‘re wasting time.  So I immediately sat down and everybody started getting out their pens. 

And I leaned over to President Reagan and I said, Mr. President, is this like it is in England, that you can‘t sit down until the king sits down?  And Reagan goes, well, no, Dana, but I usually wait for the ladies to sit down first. 

(LAUGHTER)

MATTHEWS:  That took command of the situation. 

ROHRABACHER:  Yes, it is.  And, look, he was a great writer.  He was a fine writer himself. 

MATTHEWS:  Did he blue-pencil your stuff?  How did it work? 

ROHRABACHER:  Well, in the beginning, he edited a lot.  I never wrote a speech for anybody before I wrote for Ronald Reagan. 

MATTHEWS:  Right. 

ROHRABACHER:  And he taught us the things that he wanted in the speech.  Be positive.  Talk about solutions.  Don‘t talk about—mention problems, but don‘t mention them unless you have got solutions.  Say things that will inspire people to—and activate them.  And he had a list of about 13 things.  And he taught us how to do it. 

And always, always tell a little funny story.  And...

(LAUGHTER)

ROHRABACHER:  But he knew how to inspire the people of the United States and communicate what he believed.  He wasn‘t just a great communicator.  He was a great leader, because he had a set of ideas that he wanted to put into practice.  And he helped us learn how to communicate and to write. 

MATTHEWS:  You know how it was running for Jimmy Carter?  Different. 

Anyway, let‘s to go Martin Anderson. 

ANDERSON:  Yes. 

MATTHEWS:  Sir, did you ever have a fight with President Reagan.  I‘m sorry.  We‘re going to have to come back with more.  Thank you very much, Martin Anderson, for joining us here, Dana Rohrabacher, U.S. congressman from California.

Coming up next, Cardinal McCarrick of Washington on Friday‘s funeral. 

He‘s going to be part of it.

You‘re watching HARDBALL on MSNBC. 

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MATTHEWS:  Joining us right now is the archbishop of Washington, D.C., Theodore Cardinal McCarrick who will proclaim the Gospel at President Reagan‘s funeral on Friday.

So, Cardinal McCarrick, what is a nice Catholic like you going to be doing in an Episcopalian cathedral this Friday? 

CARDINAL THEODORE MCCARRICK, ARCHBISHOP OF WASHINGTON, D.C.:  Well, it‘s the National Cathedral, as they say.  And that what makes it the place where we can all go and we can all pray to the one God and thank the lord for great American heroes.  And that‘s what I‘m looking forward to doing. 

MATTHEWS:  Well, let me ask you about Ronald Reagan.  Where does he stand in the country‘s history, as you see it? 

MCCARRICK:  Well, I think he would have to be one of the great presidents. 

When they call him the great communicator, there‘s something in that.  He was a communicator in an age of communication.  We reached—by the ‘80s, we reached the real tremendous importance of television, of radio, of the human voice, of all these things that he was able to do and do so well.  So he was there at that time when we needed a great communicator.

And he was the one who did it.  He did it with ease.  He did it with grace.  He did it with enthusiasm.  And they captured everybody‘s—or at least the majority of people‘s interests and support.  And that‘s what made him a great leader at the time when we needed to come out of the doldrums of the difficultly of Watergate and everything like that.  He was there.  That‘s what made him the man for that moment in a special way. 

MATTHEWS:  Could I be wrong in judging that Ronald Reagan, maybe because I‘m Catholic, always had a special appeal to Catholics?  Maybe, do you think it was because he played in Knute Rockne movie, played George Gipp, and seemed to have gone to Notre Dame, even if he didn‘t? 

MCCARRICK:  I think that‘s part of it. 

We all live by symbols.

MATTHEWS:  Right. 

MCCARRICK:  And we all live by things that seem to create remembrances, even when there‘s nothing to remember.  I think that was part of it. 

MATTHEWS:  Let me ask you about his Irishness.  What do you make of that, Cardinal McCarrick? 

MCCARRICK:  Well, I think he presented himself as an Irishman.  He presented him as someone who understood us Irish and who understood what turned us on, what we liked, what we laughed at.  And he worked at that. 

He was a—you have to remember that, once you‘re a great actor, you never stop being an actor.  And that‘s wonderful.  That‘s all part of the the—it‘s part of the gift that God gives us.  Holy Father has something like that, too.  Holy Father was an actor.  And so he knows how to communicate, knows how to reach people, knows how to do it with his face, with his voice, with his smile.  And Reagan did that.  And I think maybe that‘s why they got along so well together. 

MATTHEWS:  Tell me about the representation of the Vatican at this event on Friday, this big funeral. 

MCCARRICK:  The interesting thing is, it began really last week when the Holy Father received President Bush at the Vatican.  And the Holy Father didn‘t speak long, but maybe about five minutes.

But, in that time, he made it his point to say, and I hope you‘ll give me very best regards to President and Mrs. Reagan.  And he said, I appreciate his service to the world.  And he said something like, and I‘m looking forward to thanking Mrs. Reagan for her tremendous care and fidelity to her husband.  So even before the president died, the Holy Father had this in mind. 

And we just learned today that the holy father is sending Cardinal Sodano as his personal representative to the funeral, I think another sign of the fact of his personal affection and to the fact that I guess many times they were in contact.  They worked together during the difficult times of the ‘80s and the Cold War. 

MATTHEWS:  Well, you‘re so good at this whole question of keeping communities together.  I want to pay tribute obviously to you, Cardinal McCarrick, because I live in Washington, been here for 30-some years. 

In a third of a century, I have never seen a leader like you in this city.  And you do manage to bring everybody together.  What‘s your trick?  How come you seem to be involved with every ethnic group, every religious group and everybody seems to like you?  At a time when everybody is fighting over priests and fighting over every issue they can imagine, you seem to be a peacemaker.

MCCARRICK:  Well, thank you for saying that.  I wish it were all true. 

No, I think my mother had a great gift.  And I think President Reagan had it.  Holy Father has it.  And, in Spanish, we said eldon (ph) de gente, the gift of people.  And I think that is what you—if you have, that, if you really love people, then everybody is your brother, everybody is your friend, and even those who don‘t like you.  And there are enough people around who wish they had another archbishop in Washington, I‘m sure. 

But I think, if you really love people, then people see it and at least they give you a chance.  And I hope they know I love them and I hope that‘s part of it. 

MATTHEWS:  We live in the capital of a very free society, a very secular society in its institutions, tremendous diversity of background in religion and belief.  How do we learn to find a moral compass in such a country?

MCCARRICK:  Well, I think two things. 

I think, first, there is within us that inner voice that we call conscience.  In every one of us, there‘s a sense of what is right and what is not right.  You always know when you‘re lying.  You always know when you‘re mean.  You always know when you‘re stubborn or selfish, no matter what your philosophy is, what your religion is.  That‘s built in us.  There‘s an inner voice that says, you‘ve got to be nice to people. 

And besides that, I think for anyone who‘s religious, and I think deep down, there are very few atheists, everybody gets a sense that there is something, there is a God.  Whether we call him by different names or understand him in different ways, there is a God.  There‘s a God who loves us.  And there‘s a God who cares for us and a God who wants us to be happy, who, as he says on the Old Testament, my will is for your good and not for your evil. 

I will that you be happy.  I will that you be holy.  I will that you be successful.  I think we all know that.  And if you have that, if you have the sense that you have to be kind to each other, and that there is a God who is kind to you, I think that sets a moral compass.  Oh, sure, We can turn that off or we can forget it or things can come and make us angry or make us selfish.  But in the quiet of our own hearts, I think there is a conscience that says, you‘ve got to love people. 

And in the certainty of our own lives, there‘s a conscience that says, you‘ve got to love God because he loves you. 

MATTHEWS:  Well, it‘s great to hear that kind of thought and feeling this week, when everybody is actually thinking about something important and eternal as human life and respect for this country, because that‘s one thing Ronald Reagan believed in, America.  And I think Republican, Democrat and whatever, I think we all agree that this guy loved this country. 

MCCARRICK:  Absolutely.

MATTHEWS:  And I thank you, it or things make us angry or selfish.  But in the quiet of our own hearts, I think there is a conscious that says you‘ve got to love people.  And there‘s a certainty of our own lives.  There‘s a conscious that says you‘ve got to love God because he loves you. 

That‘s great to hear that kind of thought and feeling this week when everyone is thinking about something eternal, that‘s human life and respect for this country.  That‘s something Ronald Reagan believed in, America.  I think we all agree this guy loved this country.  And I think thank you, Cardinal McCarrick, for trying to see our way through these moral questions today and setting us up for this big day on Friday for the whole country to unite. 

MCCARRICK:  Thank you very much.  Thank you very much, Chris. 

MATTHEWS:  Thank you very much, Cardinal McCarrick.

Tomorrow night, join me for MSNBC‘s live coverage as America pays its final respects to President Ronald Reagan here in Washington.  Lester Holt and I will anchor our coverage throughout the day.  And in the evening, we‘ll have live coverage of the procession.  What a moment this is going to be for the U.S. Capitol on that horse-drawn caisson where President Reagan will lie in state in the Rotunda. 

Right now, it‘s time for the “COUNTDOWN” with Keith.

END   

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