updated 11/10/2014 9:50:33 AM ET 2014-11-10T14:50:33

Show: HARDBALL
Date: November 7, 2014

Guest: Rep. Steny Hoyer, Phil Mattingly, Michelle Bernard, Dannel Malloy

CHRIS MATTHEWS, HOST: Just lunch?

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

So they had their big lunch together, President Obama and the
Republicans who just beat him on Tuesday. So are they into each other?
Will they get together? Is this another one of those beer summits and that
talk of sharing Kentucky Bourbon with Mitch McConnell?

Bottom line to this lunch today between the Democratic president and
the Republican opposition, can they get anything going? Is divided
government going to work or not? Deal or no deal?

U.S. Congressman Steny Hoyer, the Democratic whip, was at the meeting
and joins us now. Congressman Hoyer, what got done?

REP. STENY HOYER (D-MD), MINORITY WHIP: Well, as usual, it`s not as
black-and-white and we would hope and as you just projected. I think what
got done was an expression by both sides that the American people are
pretty fed up with the dysfunction in the Congress of the United States and
the inability of their board of directors to act effectively and work
together. I think that was agreed upon.

Were there differences? There were. But I think there were many
things on which we can agree. The president talked about addressing the
Ebola crisis in Africa and the United States, and I think there`s agreement
on wanting to do that.

I think there`s agreement on moving ahead with an omnibus and trying
to get that done before December 11th. I think there`s agreement that we
need to cooperate.

Now, are there differences of opinion? There are differences of
opinion. As you know, immigration is still a sticking point. The Senate
passed a overwhelmingly bipartisan bill through the United States Senate
almost 18 months ago, and notwithstanding the fact that everybody agrees
that the system is broken, the immigration system is broken, the House has
not acted. And we haven`t even considered legislation, whether it was a
Republican legislation or the Senate bill or Democratic legislation. And
so the president...

MATTHEWS: So nothing got -- nothing got done on immigration in terms
of the president`s threat to act by the end of the year by executive order,
and the Republicans saying this will poison the well. This will wave a red
flag in front of the bull. Nothing got stopped in that sort of standoff at
all?

HOYER: No, that`s -- Chris, I think there -- two positions were
articulated. I don`t think they were resolved. I think the president
believes he needs to act, as he said he would, to stop what he believes is
the wrenching apart of families, leaving children without parent or parents
and in a system that, as I said, everybody agrees is broken.

What the president said was -- and what the president said publicly --
is that, Look, whatever action I take, I would much prefer to have a bill
passed by the Congress of the United States. The speaker made it very
clear, as he has publicly in the past, that he is for immigration reform.
And the president pointed out that, If you pass a bill, your bill will
supersede whatever I do.

MATTHEWS: Yes.

HOYER: My urging -- my urging, Chris, to the Speaker and to McConnell
and to our Republican and Democratic colleagues is that we not allow a
disagreement on one area to preclude cooperation on areas where we have
agreement. That would be bad for the country, and it would be compounding
the frustration and the anger that the American people feel about the
Congress of the United States.

MATTHEWS: OK. It`s great to have you on. Thank you so much for your
time, U.S. Congressman Steny Hoyer, the House Democratic Whip.

Joining me right now is our roundtable, NBC senior political reporter
Perry Bacon, Michelle Bernard, who, of course, is president of the Bernard
Center for Women, Politics and Public Policy, and the Bloomberg White House
correspondent himself, Phil Mattingly.

Phil, you`re the first -- you`re the new kid on the block here. So
what we heard there is not surprising, but Steny Hoyer`s hope that this
isn`t going to be the poisoning of the well seems fruitless right now. It
looks like it is the poisoning of the well. The first thing that`s going
to come out of this election is a gunfight at the OK corral, where one
side`s going to shoot at the other one, and they`re going to notice it.

PHIL MATTINGLY, BLOOMBERG POLITICS: The kumbaya moment implodes the
second the president pulls the trigger on the immigration executive order.
I think the big issue the White House folks are trying to say right now is,
Look, we can disagree on this, but there`s so many issues -- "so many" is
probably an overstatement. There`s a couple issues that we can really get
together on. Let`s focus on those, not immigration.

The problem with Republican leadership is you go with immigration, all
of a sudden, you give a vehicle for every problematic member in their
conference to now go out and make this the big issue. They can`t control
their members. If you move unilaterally on immigration, the White House
isn`t budging, nor are Republicans. It`s a big, big problem, Chris.

MATTHEWS: Anybody think they can get along, if they don`t do this
right? If this -- if the president pulls the trigger by the end of the
year -- I mean, he`s so clear on this, Perry. He`s so clear -- I`m going
to do this by the end of the year if they don`t act. There`s 15 days left
in the lame duck session. There`s going to be 15 days. They`re not going
to act.

PERRY BACON, NBC SENIOR POLITICAL REPORTER: I was thinking from the
premise they weren`t...

MATTHEWS: The trigger is going to be pulled.

BACON: ... going to get along together anyway.

MICHELLE BERNARD, THE BERNARD CENTER FOR WOMEN: Yes! Exactly!

(CROSSTALK)

MATTHEWS: I don`t agree with that because I think they could have a
vote.

BACON: OK. All right.

MATTHEWS: Maybe a discharge petition, get a vote, get 218 signatures,
and bring everything to the floor.

BACON: The president -- you know, people asked Boehner yesterday, If
the president agrees not to do an executive order, will you agree -- will
you promise to have a vote on the floor? He wouldn`t answer. He paused.
He said, I`ll ask my members. That told me all I needed to know is,
Boehner`s view at the end of the day is the Republican House does not want
to pass an immigration bill. He`s not confident of the votes there, and
he`s therefore not going to push the issue.

MATTHEWS: But he knows the majority of the House would vote for it.

BACON: But we`ve known that for the last year-and-a-half, right? So
that hasn`t changed his mind about this yet. So I just don`t see -- the
only thing that`s changed since Tuesday is there are more conservatives in
the House than there were before.

MATTHEWS: They`re not going to vote this year. In this lame duck
session, how many -- how are they short? How many -- how many votes are
they short of getting a discharge petition if they went out and got --
asked their members, Let`s have a vote on this? Do we know?

BERNARD: I have no idea.

BACON: There`s 190 Democrats. You only need...

MATTHEWS: You have 190, another 28.

BACON: You know, you only need about -- we already know...

MATTHEWS: Can`t they buy the 28?

BERNARD: No.

BACON: No.

MATTHEWS: Why can`t they?

BACON: Because Boehner does not want to take a bill to the floor.
The majority...

MATTHEWS: So they won`t sign it.

BACON: This is a Hastert rule problem.

MATTHEWS: So the 28 members won`t sign the bill. They won`t sign the
discharge to bring it to the floor.

BERNARD: No.

MATTHEWS: You`re sure.

BACON: I don`t think they will.

BERNARD: I don`t think...

MATTHEWS: If I were a White House congressional relations guy, or
woman, I`d say, Let`s figure out how we buy those 28 votes.

BERNARD: Yes.

MATTHEWS: What do they need?

BERNARD: But they`re -- but...

MATTHEWS: Give big city guys like Meehan and Fitzpatrick and these
guys around Philly, Dent, the ones in New York, the ones in New England --
they don`t care about immigration. They`ll go with this, right?

BERNARD: If they think that it is in any way going to help the
president and his legacy...

MATTHEWS: Oh, well, that`s just --

(CROSSTALK)

BERNARD: ... or help the Republicans...

(CROSSTALK)

MATTHEWS: That`s just saying they`re all -- the other side`s no good!

BERNARD: Well...

MATTHEWS: You`re saying they`re no good.

BERNARD: No, what I`m saying is this is politics. They don`t like
Obama. They pulled the trigger the day he was elected. They have never
liked him. And if it`s going to help Democrats in 2016 with the ticket,
they`re not going to do it. This has nothing to do with...

MATTHEWS: So there`s no way for the president...

BERNARD: ... them being bad guys...

MATTHEWS: ... to go to the House floor and make a case and say, This
bill -- (INAUDIBLE) keep saying it until the end of the year. This bill`s
a tough bipartisan bill. It`s got 14 Republicans. It is not some giveaway
to Hispanics. It`s a tough-ass bill.

BERNARD: Yes.

MATTHEWS: Why doesn`t the president go into the well of the House and
say to the Republican members -- Tip used to do this with Reagan. He`d
help get Reagan -- Reagan`s people to follow Reagan sometime on these days,
like tax reform and tamper (ph) back in `82. Why doesn`t he say, Look, you
got what you wanted, guys. There`s not going to be anymore illegal hiring
in this country.

MATTINGLY: I think the...

MATTHEWS: And that`s the big magnet. We`re getting rid of it.

MATTINGLY: From the White House perspective, what -- how has he not
done that?

MATTHEWS: I haven`t heard him say it once.

(CROSSTALK)

MATTHEWS: I haven`t heard him say it once, that this...

MATTINGLY: But I think...

MATTHEWS: I haven`t -- look, Phil, put your money where your mouth
is. Tell me when has he said this bill`s got teeth in it?

MATTINGLY: I think every single time they talk...

MATTHEWS: When has he ever said it? I never heard him say it.

MATTINGLY: No, I think when they talk, that`s their outreach to
Republicans, is this is...

MATTHEWS: Give me the words you heard the president say about how
this bill`s tough.

MATTINGLY: They will always -- and more Homeland Security secretaries
have said this over and over again...

MATTHEWS: What?

MATTINGLY: ... Jeh Johnson and Janet Napolitano...

MATTHEWS: What`d they say?

MATTINGLY: ... on the border, that this is -- which they think...

MATTHEWS: Oh, border. We`re talking border. The biggest BS in the
world is talking the border, by the way, because you`re not going to stop
people from coming here if there are jobs for them here.

BERNARD: Exactly.

MATTHEWS: Stop the nonsense. That`s nonsense. That`s Pat Buchanan
stuff -- higher towers, more guns, more searchlights. That`s nonsense!

BERNARD: That`s Ted Cruz stuff, too.

MATTHEWS: Yes, I know. But look, the bottom line is everything is
driven by economics. You would come here, I would come here,if there`s a
cheap job for me. And the Republicans, for whatever reason, don`t want to
talk about the real magnet.

Anyway, let`s move on. This is part of the job here. I push because
it`s the only way you`ll get this bill through. Who`s -- where`s the ball
on the court? You say it`s is in the Republicans` court, and they`re not
going to do anything.

BERNARD: No, they`re not going to do anything. Look, there might be
Republicans who want to do something, but is it in their self-interest to
do so? I think the thing that they are more likely concerned with is how
do they keep people like Ted Cruz, who are verbally and openly and so
overtly -- appear to be anti-immigrant -- how do they keep them under
control? There`s a danger either way that they go. They bring the bill to
the floor, people like Ted Cruz go far right. They show their true colors,
and no matter what happens in 2016, it`s a serious problem for the
Republican Party.

MATTHEWS: Does Obama win -- Phil, does Obama win -- you cover the
White House for Bloomberg. Does Obama win, the president, if he has to do
this by EO, executive order? Does he win in history? Does he look good,
or does he look like the guy who really exploited opportunistically his
limited authority in this area?

BERNARD: Oh, I think he looks good.

MATTINGLY: I think their perspective is he looks good. I think they
feel like there`s no risk now. It`s the only reason they`d go on this with
the full knowledge that it could poison any opportunities to do kind of
small-bore issues that could be bipartisan.

(CROSSTALK)

MATTHEWS: ... economic growth issues?

MATTINGLY: Yes.

MATTHEWS: So you don`t think there`s any hope for deals on any front.

MATTINGLY: No, no, no. I feel like there`s possibilities, but it`s
low-level stuff. It`s trade. It`s infrastructure. These are the things
that everybody`s focused on right now.

BERNARD: And this is stuff that the Republicans want...

MATTHEWS: But to most Americans, the issue is economic growth and
their paychecks. It`s not whether you have immigration reform or not, to
most Americans. Politicians care about this issue. Most Americans --
there`s, you know, 330 million people in this country, 11 million people
here illegally. Look, do the math.

BERNARD: Yes.

MATTHEWS: There`s a lot of people that care most about economic
development in this country.

BACON: But we know the parties don`t agree about the economy. Like,
the president says the solution is spend more money on infrastructure, hire
more people. His policy...

MATTHEWS: Minimum wage.

BACON: Minimum wage.

BERNARD: Exactly.

BACON: Republicans are opposed to those things. They don`t want to
see more public money...

MATTHEWS: Well, trade, then.

BACON: Phil just said the Republicans -- I don`t think trade --
Chris, I don`t think trade is going to create a lot of jobs.

MATTHEWS: No, trade the issue. Trade -- you get -- you get...

(CROSSTALK)

MATTHEWS: My nomenclature hasn`t been clear. They get their trade
expansion things, which the president probably does support, even though
Harry Reid doesn`t, and we get some minimum wage increases.

BERNARD: Look, if they can make a deal...

MATTHEWS: That`s how you deal!

BERNARD: If they can make a deal on building a pipeline, this is the
argument...

(CROSSTALK)

MATTHEWS: It`s all Ways and Means, by the way. It goes through the
same committee.

BERNARD: The argument you`re going to get from Republicans in terms
of economics and job growth is, Give us a pipeline. Let us build a
pipeline. We will hire people and create jobs all throughout the country.
That might be the only way that they`re going to negotiate, if they get
something that they really want.

MATTHEWS: So you would say Keystone in exchange for something else.

BERNARD: Keystone. Exactly.

MATTHEWS: Minimum wage for Keystone. I like the way you`re talking.

BACON: (INAUDIBLE) the other day.

MATTHEWS: Who did that?

BACON: Rob Portman said that (INAUDIBLE)

MATTHEWS: Let`s talk about how we deal. Let`s talk positively here,
not end of the world here. It`s Friday!

(LAUGHTER)

MATTHEWS: The roundtable is staying with us. We`re going to talk
about hope, not nope!

Anyway, a mortal challenge to "Obama care" -- that`s coming up. The
United States Supreme Court is now a player again. It`s going to take a
challenge to the subsidies that allow low and middle-income people to even
get health insurance in the first place. This is a lethal attack, a mortal
attack on health care by the Supremes. You got to wonder what John Roberts
is up to. He voted for it the first time. What`s he up to this time?

If they ban those subsidies, it gives Republicans, I think, a license
to kill the president`s health care law in other ways.

This is HARDBALL, place for politics.

(COMMERCIAL BREAK)

RICHARD LUI, MSNBC ANCHOR: Hi. I`m Richard Lui in New York with
breaking news from the White House. President Obama will nominate federal
prosecutor Loretta Lynch to be the next attorney general. That
announcement will be made at an event tomorrow. Lynch currently serving as
a top federal prosecutor for the eastern district of New York. Now, if
confirmed, she`d be the first female African-American attorney general.
Eric Holder, the current attorney general, announced in September he was
stepping down.

HARDBALL continues right after this.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. It was that old Mr. Dooley (ph)
comic back in 1901 that said the Supreme Court follows the election
returns. Well, two years ago, in a very different political climate, the
high court upheld the Affordable Care Act. Well, today, after a Republican
wave this Tuesday, we learned that the Supreme Court is suddenly going to
hear a second case that could kill the bill.

Anyway, millions of people enrolled through the law`s federal
exchanges could actually get their help through government subsidies. We
all know that. The government helps you pay for your health care. The
court could rule that those subsidies are illegal, allowing the entire
health care system to fall apart. The federal exchange serves -- the
federal exchange serves 36 states. Nearly 90 percent of all enrollees rely
on those subsidies. If the court rules against them, millions would lose
their coverage.

We`re back with the roundtable, Perry and Michelle and Phil, the new
kid. Anyway, Michelle, you`re the lawyer here. The Supreme Court said it
was OK. They used, I think, the interstate commerce clause, as has been
stretched normally (ph) to include the fact they can make you do something
and buy health care, not just under civil rights, they make you -- can stop
you from something you don`t want to do, or whatever it is. So the court`s
ruled 5 to 4 before it was OK.

Now they`re looking at this thing that says the law as written by
Congress said that only where states have created these exchanges...

BERNARD: Yes.

MATTHEWS: ... can people get subsidies.

BERNARD: Exactly.

MATTHEWS: The way it`s been interpreted by the administration is more
broadly, that all exchanges, even though created in the 36 states by the
federal government, can get subsidies. What happens if the courts simply
rule the law`s the law, you can`t have subsidies?

BERNARD: Well, I mean, and this is what`s going to be really
interesting because we now have two lower courts, one court of appeals that
has said that the federal subsidies are unconstitutional and they struck it
down, and another court that has said it is constitutional. So that`s
why...

MATTHEWS: But they`re not both at the same level.

BERNARD: No, no. They`re both not -- they`re not at the same
level...

MATTHEWS: There`s only one at the level that says -- yes.

BERNARD: So -- so -- so the Supreme Court has taken this case on now.
Typically, you know, first year law student 101, what you learn is that the
justices on the Supreme Court are supposed to be able to divorce themselves
of whatever their personal politics are and just look at the law for what
the law says.

Here`s the problem that I think that this administration could have.
If you look at the language of the case itself -- again, law school 101 --
the statute is what the statute says. And in this case, the statute says
federal subsidies are appropriate where -- in states where there is a state
exchange.

The IRS has interpreted it broadly in this case, and they`re saying
federal -- you know, federal exchanges are fine. With conservative
justices who are just going to look at the plain meaning of the language in
the statute, they could gut it. They could find it unconstitutional. And
it would be the death knell...

MATTHEWS: Was this a glitch?

BERNARD: ... of the Affordable Care Act.

MATTHEWS: Or was there legislative history to suggest this was the
intent of Congress, to only give the subsidies to the state exchanges?

BERNARD: Well, I mean, that`s what they`re -- that`s what they`re
going to have to look at. I haven`t looked at the statutory8 language. I
haven`t looked at any of -- you know, any of what Congress says with
respect to that key provision of the statute, but that`s what they`re going
to be looking at.

MATTHEWS: But some people...

(CROSSTALK)

MATTHEWS: Excuse me. Some people say it`s illogical, that it must
have been a glitch, a mistake in the writing, because there`s no way to
have the system work without the subsidies for everybody.

BACON: Yes, the members who wrote the bill, Henry Waxman, Max Baucus,
around them -- or among them, say this was a glitch. They have written
(INAUDIBLE) saying, We clearly intended not to...

(CROSSTALK)

MATTHEWS: Why didn`t they go through legislative counsel and have the
language fixed?

BACON: They couldn`t change it after Scott Brown won, remember? They
couldn`t change parts of a bill because...

MATTHEWS: Oh, I remember that now!

BACON: ... once Scott Brown...

MATTHEWS: That`s exactly right!

BACON: ... (INAUDIBLE) change the numbers. That`s why -- they knew
this was a problem when they were signing the law. They couldn`t change it
because the Republicans wouldn`t approve it anymore.

MATTHEWS: I remember all that now!

(CROSSTALK)

MATTHEWS: ... they could go back and fix some of the numbers, but
they couldn`t fix the language. That`s so interesting.

MATTINGLY: Yes, no, and...

MATTHEWS: Because they used reconciliation.

MATTINGLY: Exactly. Exactly. But here`s kind of the conservative
retort to that, is that this was deliberately put into the law as a carrot
to get the states to participate. Whether or not the overall legislative
intent...

MATTHEWS: Oh. Do they have legislative language to prove that? In
other words, was there history of somebody saying that during the debate?

MATTINGLY: Well, first, one of the top advisers, Jonathan Gruber,
actually came out and said afterwards -- this is what`s constantly cited on
the right when you talk about this issue, Halbig being one of the cases,
not the one that`s being taken up by the Supreme Court -- is that he said
that this was a carrot that was intended to get all states to go along with
the exchanges.

MATTHEWS: OK.

MATTINGLY: That`s problematic. But to Perry`s point, you look
through the legislative history, it`s not that this was a typo or that this
was a glitch. It`s that simply, they did not have time to go through a
conference committee, to go through an actual normal legislative process
and say, Hey, section XX doesn`t match with section XY, let`s fix this
immediately. Never happened. Now it`s a huge problem.

MATTHEWS: Somebody`s going to write a back someday about the
consequences of Ted Kennedy passing away. It`s going to be...

UNKNOWN: (INAUDIBLE)

MATTHEWS: And there`s so many places where this pops out at you, like
this case, where he`s -- he -- we lost him.

Anyway, here`s Nancy Pelosi, the Democratic leader, reacting to the
news of the court`s decision today to hold this case. Let`s watch.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE MINORITY LEADER: Why they`re taking
it up, I don`t know. The intent of Congress was clear.

The CBO reporting on the costs of it were always part of how we went
forward with the legislation. So it`s troubling that they would even
consider this.

(END VIDEO CLIP)

MATTHEWS: OK, how does the president deal with this if the court goes
5-4 the other way, once again just shoots down basically the financial
basis of his entire legislative success, the Affordable Care Act?

What`s he do?

BERNARD: Well, look, this is going very -- going to be very difficult
for the president, and I think that the Supreme Court has a legal basis
outside of anything else to strike it down.

Congress should have got it right the first time around. And if they
strike it down now, the president`s whole attitude towards Congress is
going to have to change, because, between now and 2016, his people are
going to want him to find a way to get the law fixed.

MATTHEWS: So, wait a minute. Is he going to use executive order to
let seven million people...

(CROSSTALK)

BERNARD: No, that`s the point.

MATTHEWS: And he`s going to have -- he`s going to 350 million people
eligible -- 330 million people eligible for health care that weren`t
before. He can`t do everything with E.O.

(CROSSTALK)

BERNARD: No, no, I wasn`t arguing for E.O.

I`m saying his personality and the way he`s chosen to deal with
members of Congress is going to have to change drastically.

MATTHEWS: To what effect? To what?

BERNARD: Because he`s going -- well, he`s going to -- he`s going to
have to be a kinder and gentler Barack Obama because...

MATTHEWS: And hope they will fix it?

BERNARD: And hope and pray that he can talk them into fixing it.
It`s his legacy.

(CROSSTALK)

BERNARD: And I don`t think it`s going to happen.

(CROSSTALK)

MATTHEWS: There`s 250 Republican members of the Congress.

BACON: There`s no way they`re going to rewrite...

(CROSSTALK)

MATTHEWS: Two minutes ago, you were so partisan, hit, hit, hit. Now
you`re saying, please.

(CROSSTALK)

BERNARD: But that`s his only hope. He can`t do this by executive
order. The only way -- if it gets struck down as unconstitutional, the
only thing that can be done to save this is legislation, and he needs
Congress to do it.

MATTHEWS: Let`s talk John Roberts. I have always respected him. I
respect these guys for different reasons.

He came out with tremendous cojones to say, I`m for affordable care,
5-4.

BERNARD: Yes.

MATTHEWS: Usually, it was Kennedy who on fiscal matters is much more
conservative.

BERNARD: Yes.

MATTHEWS: On social issues, like same-sex, the other way. Right?
It`s interesting, these two swing guys.

Could he have just spent the last year -- when did he rule on this the
first time? A couple years ago.

(CROSSTALK)

MATTHEWS: So, he`s been spending two years taking fire from every
conservative buddy he`s got, inside and outside the court, maybe his
family, maybe everybody.

BERNARD: Absolutely.

MATTHEWS: Why did you do this? This doesn`t make any sense.

So then he comes along and sees this lifesaver, where he can fix
everything with his crowd. It says, well, the letter of the law is very
clear here, Phil.

Is he now saying, I have got a life preserver I can grab now, go the
other way and my conservative friends will love me again?

MATTINGLY: Roberts is fascinating. He gets hammered by conservatives
for what happened in 2012 on this.

And then, all of a sudden, six to eight months later, you get all
these theories that this was actually a part of a grand plan that he has to
basically move domestic policy toward conservatism as he goes through.

Then, about a month ago, there were more stories popping up about John
Roberts is going soft again. Conservatives are getting concerned about it.
I think the big question is, so it only takes four justices to decide to
take up a case. You don`t know if John Roberts is one of those justices.

MATTHEWS: I see.

MATTINGLY: Obviously, it`s pretty clear that there are four
conservative justices.

(CROSSTALK)

BACON: Kennedy was the fourth.

BERNARD: Kennedy was the fourth, I think.

MATTINGLY: So you have that, but how he rules on this, you can`t help
but think that right now he`s sitting there going, all right, I got another
shot.

BACON: And Obama is so much more unpopular now than in the midst of
2012. It`s much easier now.

(CROSSTALK)

MATTHEWS: Perry first, and all three of you. Mr. Dooley is right,
the Supreme Court follows the election results?

BACON: I think, absolutely.

BERNARD: I think they think about it, but I think John Roberts is
going to into -- is going to follow what he thinks is intellectually the
correct thing to do.

MATTHEWS: Good for you.

MATTINGLY: I agree.

(CROSSTALK)

MATTHEWS: We have two people that believe in our system and one that
doesn`t.

(LAUGHTER)

(CROSSTALK)

MATTHEWS: I think Supreme Courts are all different. I think the
Warren court approved -- separate but equal went down. Another court
wouldn`t have done that.

BERNARD: Yes.

MATTHEWS: I think it took Frankfurter, right?

(CROSSTALK)

BERNARD: It took people with morals.

(CROSSTALK)

MATTHEWS: It took Thurgood Marshall to make the case.

Anyway, we`re coming back with the roundtable to talk about Ted Cruz.
Now, we`re talking sort of positively here. Get ready for hell.

(LAUGHTER)

MATTHEWS: For hell. He wants to drive his party off a right-wing
cliff. He`s the new Joe McCarthy. Take a look at him and Google him. He
even looks like McCarthy.

Up next, one of the bright spots for Democrats this week. Governor
Dan Malloy is coming here. He performed so well after the horror of Sandy
Hook. He won reelection in Connecticut. He`s one of the guys I was
actually rooting for, quite secretly. He will be joining us when we come
back.
And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. rMDNM_DANNEL MALLOY (D), CONNECTICUT: It was evident to me that
there was a reluctance to tell parents and loved ones that the person that
they were waiting for was not going to return. I made the decision that to
have that go on any longer was wrong. I did it.

(END VIDEO CLIP)

MATTHEWS: Wow.

Well, that was Connecticut Governor Dan Malloy in the aftermath of the
Sandy Hook massacre recalling his decision to bypass the usual protocols
and inform the victims` families of their loss.

His leadership during that time of crisis in consoling the people of
Connecticut and pushing for stricter gun regulations showed both
sensitivity, we think, and obvious conviction.

This past Tuesday, Governor Malloy won a hard-fought reelection battle
in a rematch against Republican opponent Tom Foley, who he had beaten
narrowly four years ago. His victory was one of the few, actually one of
the bright spots for Democrats in an election year that clearly favored
Republicans.

He joins us now in our spotlight discussion tonight.

Governor, I was rooting for you privately. I don`t know if you could
feel it up there, but I think you`re a good, decent guy, and I just
wondered why you had a tough fight. What was it all about up there in
Connecticut, which is a very well-educated state? People all read the
newspaper. They know what`s going on. Why was it so close?

MALLOY: Well, you got to remember that Connecticut actually tends to
elect Republican governors.

I was the first Democratic governor in 20 years. I won by a landslide
of 6,400 votes.

(LAUGHTER)

MALLOY: And then I had to do some really tough things. I had to
raise revenue. I had to renegotiate contracts. I had to trim some
services.

My first year in office was really hard. And then we had Storm Irene,
and then we had another storm and the economy took another hit because of
the two storms back to back. It was a tough couple of years. And so
Republicans tagged me as the guy who raised everybody`s taxes.

And, in fact, I had to raise the revenue. I never ran away from that.
We just knew that in the context of a campaign, if we actually explained
why we did certain things and that we`re making progress -- I have seen a
32 percent drop in murders in my state since I came into office. High
school graduation rates are up. Not a single firefighter, policeman, or
teacher in the state of Connecticut was laid off because I shifted our
state burden to local communities.

And in that context, I was able to get a gigantic win of three points.

MATTHEWS: Well, "The New York Times" -- I don`t know if you agree
with "The New York Times" editorial page, but it`s hell of a newspaper.
They`re not always right on the ed page. But they said you`re an unlikely
national spokesman for the pragmatic left.

First of all, I don`t like the use of the word left in America, but in
the world, left means something none of us are. But left is an odd term.
Do you see yourself as pragmatic left?

MALLOY: I think of myself as a progressive and someone who is trying
to do the right thing for as many people as I possibly can, and someone who
is more than happy to lead in that direction, whether it`s $10.10 minimum
wage or paid sick days.

We passed paid sick in Connecticut in 2011. There wasn`t another
state that passed it until California about four or five weeks ago, and
Massachusetts on election night. I don`t mind leading. I don`t mind
leading the discussion. I don`t mind standing up for our president when
he`s right. And I don`t mind pointing out when I don`t think he`s right,
although more times than not, I think he`s been right, and I wanted him to
come to the state of Connecticut and was happy that the first lady came in
on the Thursday before Election Day and the president came on the Sunday
before Election Day.

I don`t run away from my friends, and I stand by my convictions.

MATTHEWS: Let`s talk taxes for a minute. One of the issues before
the president and I think the Republicans is they`re both -- there`s talk
on both sides about cutting corporate rates. And I think you know, being
in Connecticut up there, near New York, you know the financial center of
the country, corporate rates have been a problem for our businesses to
compete overseas.

And yet people know there`s a lot of loopholes. Do you see a deal
where the president could get the rate down to the mid-20s, like Tip and
Reagan did back in the `80s, if they can close enough loopholes? I think
this is a win-win. But what do you think?

MALLOY: I think it`s a win-win. But I will go one step further.

Let`s tie it to some level of immigration reform. At least -- you
know, we give master`s and doctorate degrees to people and tell we them
they have to leave our country. And we give it to them in fields that we
are understaffed in and where we absolutely need folks.

I understand maybe there`s not a big immigration deal to be made yet,
but let`s at least get to the green card side of people with master`s and
doctorates and M.D.s and engineers. Let`s keep those people in our state
as part of a broader bargain to do something about tax rates, and let`s
stop this offshoring of the corporate center.

MATTHEWS: Again, best to you and congratulations. I mean it,
heartily, that you won that election up there.

Dan Malloy, the reelected governor of Connecticut, in our spotlight
tonight.

Anyway, the roundtable is coming back in a minute.

And when we return, Ted Cruz. Talking about good guys, well, here`s a
bad guy to blow up the system. He doesn`t want government to work. He
shows it. He`s Joe McCarthy reincarnate. Check his picture out in Google.

We will be right back in a minute.

(COMMERCIAL BREAK)

RICHARD LUI, MSNBC CORRESPONDENT: Hi. I`m Richard Lui. Here`s
what`s happening this hour for you.

Officials telling NBC News President Obama will nominate New York
prosecutor Loretta Lynch to replace Attorney General Eric Holder. An
announcement is expected tomorrow. Lynch, who has been confirmed by the
Senate twice before, would be the first African-American women to serve in
that role.

Authorities have official ruled Robin Williams` death a suicide.
Toxicology results no alcohol or illegal drugs were in his system when he
died on August 11 -- now back to HARDBALL.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), TEXAS: Now is the time to go after and do
everything humanly possible to repeal Obamacare.

(CHEERING AND APPLAUSE)

CRUZ: Now is the time to stand up and say, follow the Constitution,
honor the rule of law and protect the Bill of Rights.

(CHEERING AND APPLAUSE)

CRUZ: The era of Obama lawlessness is over.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: The face of demagoguery.

Anyway, welcome back to HARDBALL.

That was Texas Senator, unfortunately, Ted Cruz, one of the GOP`s
biggest troublemakers and demagogues, who could prove to be Mitch
McConnell`s worst nightmare. Cruz and his fellow presidential hopefuls in
the GOP Caucus, Rand Paul and Marco Rubio, are expected to position
themselves to the far right of their party, so they can appeal to a more
conservative presidential primary electorate and also, as a corollary, make
life more difficult for the people in their party who want to get something
done this year in country.

Former aide to Majority Leader Harry Reid Jim Manley told Talking
Points Memo -- quote -- "The pressure is going to come from within their
own caucus. You have got three guys running for president, none of whom
care about the Senate or their colleagues or their colleagues` views. When
Ted Cruz starts demanding a personhood amendment, I don`t think there`s
going a lot of Republicans within that caucus who are going to be happy."

Anyway, back now with our roundtable of Perry Bacon, Michelle Bernard
and Phil Mattingly.

Phil, back to you again.

This question of Ted Cruz, everything he seems to do is like one big
demolition brigade. He doesn`t want bills passed. He treats President
Obama like a crook, a -- he refers to his lawlessness, his abuse of power.
He uses language of revolution.

MATTINGLY: If you are a Republican leader, Ted Cruz is a big problem,
and is going to continue to be a problem through the next two years,
whether or not he decides to jump in for a presidential run -- and it, by
all accounts, looks like he`s going to.

I was talking to a House leadership...

MATTHEWS: Why would he run?

MATTINGLY: When you look at the people that he speaks to, when you
look at the audiences that he appeals to, they love him. He speaks to what
they believe in.

He actually reaches them on a level that they don`t feel like anybody
else is. And that`s not dismissing them. It`s not dismissing him.

MATTHEWS: What, hatred?

MATTINGLY: No, I think that there`s real concern in certain segments
of this country about the direction of the country.

Ted Cruz taps into that better than maybe anybody else. And you talk
to people, even Democrats, who know him well, who maybe knew him coming up
through the Ivy Leagues, any of that, they say dismiss him at your own
risk. Whether or not you agree or think he`s evil or however you want to
term it, he`s an extremely smart person, and you dismiss him at your own
risk.

MATTHEWS: OK. The question again, Michelle, what`s his goal?
Because the idea -- I guess everybody has this view of the world that
they`re going to be the leader of.

rMD+IT_rMD-IT_BERNARD: Yes.

MATTHEWS: Not everybody. But does he think he can win the
nomination?

BERNARD: He appears to think a lot of things about himself that
people like me don`t -- don`t seem to really fathom.

But, yes, I do think he thinks he could win. I think that he`s got
almost a sort of God complex in terms of the way that he speaks about...

(CROSSTALK)

MATTHEWS: He`s God, or God likes him? Which one?

(LAUGHTER)

BERNARD: I think that he thinks that he...

(LAUGHTER)

BERNARD: Think that he thinks that he`s God, and therefore God likes
him.

(LAUGHTER)

BERNARD: How`s that?

He`s an -- I mean, he`s an enormous problem. And there`s a difference
between being a moderate Republican and a moderate conservative, or even a
Democrat, for that matter, and being worried about the direction of the
country, and then being Ted Cruz, who refers to the president as being
lawless, Ted Cruz, who wants to send little children back across the
border, Ted Cruz, who wants a flat tax no matter your income is, or the Ted
Cruz who wants to abolish the Internal Revenue Service, or do any of the
other things that he talks about.

He`s a serious problem, particularly for Republicans in 2016 that are
coming from blue states.

MATTHEWS: My problem...

BERNARD: They have got to be saying...

MATTHEWS: My...

BERNARD: ... how do we control him?

MATTHEWS: My problem is the real McCarthy thing.

It`s not just he has a facial resemblance to the guy, which would be
unfair for me to talk about. But there`s a coincidence of the face and the
politics.

This guy -- there it is -- look at the picture. It`s weird. That`s
just an accident at birth. But when he refers to the fact that Chuck
Hagel, who was up for secretary of defense, how do we know he didn`t get
$200,000 from the North Koreans? That`s McCarthyism.

BRENNAN: Exactly.

MATTHEWS: That`s a definition of it.

BACON: Chris, you asked, why is he going to run? He thinks he`s the
next Ronald Reagan. He`s talked about this publicly. He compares himself
to Ronald Reagan. He can move the Republican Party to the right and win at
the same time.

MATTHEWS: I don`t think Nancy would agree with that.

BACON: This is a man with a lot of confidence.

BRENNAN: Exactly, exactly.

BACON: He`s not running for fun. He believes that he can win.

A big thing, though, Mitch McConnell in Louisville kept saying, we`re
not having government shutdowns.

MATTHEWS: Who is he talking to?

BACON: He`s talking to Ted Cruz. Cruz is talking about hearings.
I`m going to use hearings and less about shutdowns. And I think he made --
I think Cruz is getting weaker than you think he is.

MATTHEWS: He`s going to make Mitch McConnell loveable. On election
night, Senator Cruz took to FOX News, where else, and accused of president
of abusing his power. That`s him. Let`s watch.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), TEXAS: I think that`s one of the biggest
differences we`re going to see with the Republican majority, is finally
meaningful oversight of the Obama administration from the U.S. Senate. For
six years, Harry Reid has been President Obama`s most important protector,
and he shut down the Senate. There`s been essentially no oversight.

I hope we begin serious, careful, systematic, sober hearings,
examining executive abuse, regulatory abuse, lawlessness, abuse of power,
whether it is the IRS wrongfully targeting citizens, whether it is the
debacle of Benghazi and four Americans who lost their lives and why more
was not done to save them, or whether it is the lawlessness that has
pervaded Obamacare, as the president and the executive branch has tried to
pick and choose which laws to follow. I hope we see serious Senate
oversight on all of those fronts.

(END VIDEO CLIP)

MATTHEWS: But the soon-to-be Majority Leader Mitch McConnell struck a
different tone. He actually wants to get something done. Let`s watch.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), KENTUCKY: When the American people choose
divided government, I don`t think it means they don`t want us to do
anything. Let me make it clear: there will be no government shutdown and
no default on the national debt.

(END VIDEO CLIP)

MATTHEWS: You know, in winning the majority, I`ve talked about it so
many times on HARDBALL -- the Republicans have the control of the subpoena
power. In fact, I`ve told that the committee on permanent investigations,
subcommittee on permanent investigations, has the unique power that only
the majority, now the Republicans, can subpoena. So, they don`t need the
Democrats to go along with anything. They can do it year round on every
issue any issue.

When you listen to Senator Cruz, it sounds like he and Ron Johnson,
one of his conferrers, apparently one of his supporters, are ready to use
that subpoena power on everything.

PHIL MATTINGLY, BLOOMBERG POLITICS: On as much as you possibly can.
I think on some level, if you`re Mitch McConnell, you say, OK, good, go do
that. Go do the oversight hearings. Subpoena as much as you want, have a
thousand hearings and let us try to work on how to govern both across the
two chambers and with the White House.

MATTHEWS: Do you think he`ll give him his piece of the action, but
keep him out of the way?

MATTINGLY: I think so. Look, I don`t know that he can keep Ted Cruz
out of the way, but I think Mitch McConnell is as good an operator when it
comes to this sort of thing as anybody else. And if he thinks that that`s
the way he can actually move stuff forward and show the Republicans can
govern, he`ll take that path.

MATTHEWS: You know, one of the problems is that Mitch McConnell,
hoping to be positive, says I`m going to open it up to amendments. Well,
we -- I guess, it`s not something I thought and other people around here,
producers, have thought of it. Suppose he has a personhood amendment,
which drives Republicans right down the middle.

BRENNAN: Exactly. Look, Mitch McConnell is shrewd, and he just came
out of an election where he had to fight much harder than I believe he ever
expected.

MATTHEWS: Two million of his own bucks.

BRENNAN: I don`t think he ever expected to have to fight that hard,
and --

MATTHEWS: By the way, he wasted the $2 million because he won by 15.
I`m sure his wife or somebody said, did you have to spend that money?

BRENNAN: He -- look, Mitch McConnell understands that going into
2016, they have to be very cognizant of their branding problem. I don`t
think Marco Rubio or Rand Paul are as much of a problem for him as Ted Cruz
is, particularly Rand Paul. He`s coming out with things that are
interesting and appealing to others outside of the Republican Party.

Ted Cruz, anything he does, you come up with a personhood amendment,
let`s start all over again with the war on women, here we go, thank you,
Hillary Clinton. Will the Republican Party wants to have --

(CROSSTALK)

BRENNAN: That was -- that was my Jamaican accent.

MATTHEWS: Up next, this is really hot. The Navy SEAL who shot and
killed Osama bin Laden steps forward and identifies himself with new
details about the mission to kill the world`s number one terrorist. This
is hot and new for us tonight.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, President Obama has now authorized the deployment of
up to 1,500 additional troops to Iraq. The mission of those troops will be
to train and advise Iraqi forces on the ongoing battle against ISIS. But
they won`t have a combat role, we`re still told. We currently have about
1,600 troops in Iraq. So, this deployment authorization nearly doubles our
force in Iraq.

We`ll be right back after this, with the Navy SEAL who shot bin Laden.

(COMMERCIAL BREAK)

MATTHEWS: We`re back with the roundtable, Perry, Michelle, and Phil.

Phil, you`re new guy on the block. Let`s get to this one. I never
thought we`d talk about this, but apparently the SEAL team member who
killed bin Laden has come forward.

MATTINGLY: That`s right. He`s come forth. He said he`s done it,
he`s out, he`s going to do.

He gave an interview to "The Washington Post." He`s going to do an
interview with FOX News. He`s a motivational speaker.

Look, this is a tough one, right?

MATTHEWS: Why would he want to be exposed to the enemy?

MATTINGLY: It`s a great question. If you read "The Washington Post"
story, his decision was made after he met with some 9/11 families and was
told that he gave them a significant amount of closure after speaking to
them. He was connected with the congresswoman who set it up and I think
that spurred him on. I think the problem with that, is that some of his
teammates take issue with it.

There`s an ethos there --

MATTHEWS: Ethos being what?

MATTINGLY: Being that Navy SEALs don`t take credit for -- and this is
just Special Forces in general -- they don`t take credit, they don`t seek
credit. Look, as a civilian, it`s tough to weigh in on the merits. But
you see where team members are coming out saying they have problems with
this. It raises serious issues.

MATTHEWS: So, what`s wrong with this country now, where you have
Gates and you have Panetta, everybody`s speaking -- there`s no sense of
loyalty. Am I the only guy here to say, you used to be loyal to your team?
There`s no team spirit anywhere in government, including the SEALs with
their tremendous esprit de corps. You got Gates, you got Panetta, ratting
out the guy you got appointed by.

BRENNAN: I got huge problems with Gates and Panetta and what I view
to believe their disloyalty. I don`t think I have a problem with this guy.
I understand the ethos and it is a personal decision that he has made. But
he also brings a great deal of closure to people that are still reeling
from what happened from 9/11. These people put their lives on the line for
us.

MATTHEWS: How does it help the victims?

BRENNAN: Because I think it`s probably no different than anyone who
has had a loved one murdered and the police finally arrest them or put them
to death and they somehow deal with them and somehow it makes you feel
better to talk to the person who took care of this for you. I think it
gives families resolution.

And, also, I mean, these people, the SEALs, they put their lives on
the line for us every day.

MATTHEWS: It`s true.

BRENNAN: Why would anyone begrudge him whatever it is he`s getting
paid to be a motivational speaker? Let him deal with his colleagues. Let
him deal with his team members and the negative feelings that they have
about him doing what he`s doing. But I think the public should let him
alone.

MATTHEWS: I think you`re humiliated when you don`t have justice for a
family member.

BRENNAN: Yes, you do.

MATTHEWS: Let`s talk about the fact that the United States is now
going to double its troop compliment in Iraq. We`re not going out. We`re
going in.

Perry?

BACON: We are going in. I mean, we know we have this ISIS problem.
And the president has said he`s looking to solve. And I`m not surprised by
this. I think it`s actually we were talking about bipartisan support. I
think there`s really bipartisan for more engagement --

MATTHEWS: How do you win a battle with 3,000 troops against 30,000
people on the other side?

BRENNAN: You don`t. There are people who are going to argue, myself
being one of them, that we should not have come out of Iraq the way we did
or when we did. We`re not going to win with 3,000 troops. More and more
people --

MATTHEWS: You think of being kept, you know, the guy is the former
ambassador, Jeffrey, I just read the piece in the "Wall Street Journal," he
said had we kept our troops in there, A bunch of them, there still would be
the problem, that the Sunni and the Shia don`t like each other and then
they jam them into the streets and they jam them into the streets, they
join is.

MATTINGLY: I think there`s a good case to be made that the U.S.
influence on the Iraqis when they were there, particularly in the
government, would have had some type of impact. How do you know -- how can
you say that the dominos wouldn`t have fallen this way if 10,000 troops
were still there? You can`t at all.

But what we`ve seen today is underscoring the fact that a central
component of the U.S. strategy in Iraq, the ability to get the Iraqi
defense forces, the Peshmerga, and then Sunni tribes to rise up and fight
the Islamic State to be the forces on the ground is simply not ready to
work. How long it takes to get that done is a great question, because if
they can`t figure out a way to actually have a force on the ground that`s
effective, U.S. troops, more them are going to come (ph).

MATTHEWS: I should say something here, because I mentioned it during
the break that a friend of mine told me a friend of his -- and I love
getting information like that -- said a member of the military says we
don`t like being referred to as boots on the ground. We`re human beings.
We`re American patriots, serving our country under frightening situations.
We`re not boots.

(CROSSTALK)

BACON: These SEALS, in my view, they`re heroes. I don`t mind them
writing books. In a country where Kim Kardashian gets to be famous, they
should be allowed to --

MATTHEWS: I could spend my life being on television without that name
ever being mentioned.

(CROSSTALK)

MATTHEWS: Thank you, Perry Bacon. Or Paris Hilton. Thank you, Perry
Bacon, Michelle Bernard and Phil Mattingly.

When we return, let me finish with something I witnessed personally 25
years ago. It`s a story of how systems fail. It`s a big one.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with something I witnessed quiet
personally. It`s the story of how systems fail.

Twenty-five years ago, I stood on a mound of dirt looking down on the
Potsdamer checkpoint separating East from West Berlin. It was a weekend in
November, 1989. I was watching history.

For the second Saturday, the communist-running East Germany had opened
the Berlin Wall, letting thousands of East Berliners trapped for decades
behind the wall visit the western part of the city. Looking down on the
scene, I saw the grim parade of humanity getting their first breath of
freedom coming to the checkpoint. You could see the effect of all of those
decades of communist repression.

And the one thing these people are used to is waiting in long lines
for food, for state-issued ticket to an opera, 18 months for one of the
ugly little East German cars that chugged along mostly producing exhaust.

They were greeted that Saturday morning by British soldiers ladling
out hot coffee out of their jeep cans. And then they caught sight of a
bakery truck offering little packets of cookies. What a site these
desperate people so used to waiting in line, so appreciative of even small
tokens of food and fortune.

Obviously, their lives used to the waiting, used to the desperation,
not so used to getting anything good given to them. Quote, "That`s what 40
years living under communism has got them," I heard a proud West German
remarked, "Standing in line for biscuits."

I spent a week watching all of this. Watching and interviewing East
Berliners on what this all meant to them. It was the young man who said,
"If many could speak openly to a reporter like me, that he and his friends
could speak openly about politics."

There were other people who told me of the terrible failure of the
communist system. They told them how the factory manager and the school
principal, the true believers of the system were treated the worst, how the
East German currency itself was not even accepted at the better East Berlin
hotels. How they were pushed back to the back of the line when they went
to travel in an airplane, how their own airlines favored travelers from the
West, people with real money to spend.

The only people who managed to do well in the East German system, the
communist system, were the taxi drivers and hustlers who had access to the
tourists visiting from the West.

And what struck me down and recurs to me now is how systems fail.
It`s when they fail to deliver to the true believers, when they screw the
very people on whom society most depends. As I said, the factory manager,
the school principal, because when you fail the people who makes society
work, you make the system unworkable. When the nurses start heading west,
you know you`re in trouble.

And that`s when the Berlin wall fell, when the Iron Curtain became
irrelevant, when the communists were called on their promises and found
short.

Lesson here: people will support a system if it repays their loyalty
with respect, economic respect. When it no longer does, look out. We in
our country of freedom should never forget this lesson because with all of
their good values, the system of the free market still has to deliver for
the people, especially for those who trust it most.

That`s HARDBALL for now. Thanks for being with us.

"ALL IN WITH CHRIS HAYES" starts right now.

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

Copyright 2014 CQ-Roll Call, Inc. All materials herein are protected by
United States copyright law and may not be reproduced, distributed,
transmitted, displayed, published or broadcast without the prior written
permission of CQ-Roll Call. You may not alter or remove any trademark,
copyright or other notice from copies of the content.>