updated 4/17/2015 12:22:24 PM ET 2015-04-17T16:22:24

Show: HARDBALL
Date: April 16, 2015
Guest: Rep. Marcy Kaptur, Rep. Steve Israel; Ken Vogel, Mark Sherman, Paul
Henderson, John Brabender, Nedra Pickler

CHRIS MATTHEWS, HOST: Democrats at war.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in San Francisco.

For seven years, ever since the brokered alliance of Barack Obama and
the Clintons in 2008, the Democratic Party has held strong. Neither the
bad blood of that year`s primary season nor the day-to-day issues have cut
through its unity until now, until the battle that will rise up next week,
the battle over international trade.

As it has in each political generation, this matter of how this
country deals economically with the rest of the world gets very local, and
therefore very personal. As it has before, organized labor has sought to
protect the jobs of those who have them against the promise of new jobs
offered by the champions of greater trade.

And as it has before, as it did with Bill Clinton and now with Barack
Obama and Hillary Clinton, the opponents of the latest trade expansion are
headed to the barricades. And as before, they find their party`s top
leaders on the other side.

President Obama promises that any new trade deal with Asia will have
the greatest possible safeguards for both workers and the environment, but
will this be enough to carry the fight that begins next week? And will he
and the country find Hillary Clinton standing at his side?

David Axelrod was senior adviser to President Obama and Congresswoman
Marcy Kaptur is a Democrat from Ohio.

Let me start with Congresswoman Marcy Kaptur. Have you ever supported
free trade? In other words, is free trade a basic battle for you and the
working people of your area?

REP. MARCY KAPTUR (D), OHIO: Free trade is a battle for the
communities that I represent and the people and companies that reside
there. I have supported the Jordanian agreement. I felt it was a stronger
measure.

But I basically believe in our Constitution, which says that the
Congress, not the executive branch, shall have the power to regulate
commerce with foreign nations. It doesn`t say rubber stamp agreements that
the executive branch negotiates, and it doesn`t say you can`t amend.
Congress has to be able to fix what`s wrong with these agreements.

And frankly, Chris, in my area and the whole country, since these so-
called free trade agreements have been signed and rushed through Congress
under the fast track procedure, our country has lost net 47,500,000 jobs,
among them over 5 million manufacturing jobs. The American people have
lived these year after year after year of trade deficit. An accumulation
of $9.5 trillion in the last 35 years...

MATTHEWS: Right. OK. Right.

KAPTUR: ... equals lost jobs coast to coast net.

MATTHEWS: OK, so you`re saying we have fewer people working today
than we did before we started the free trading agreements.

KAPTUR: I`m saying -- well, the population`s increased.

MATTHEWS: Because you said we`ve lost -- we`ve lost 47 million jobs.
Do we have more jobs now...

KAPTUR: That is correct.

MATTHEWS: Do we have 47 million less jobs than we had then? No. So
what do you mean by that number?

KAPTUR: By that number, I mean those are jobs that could have been
created here. Such as last year, we lost 16 percent of our GDP, our
economic growth, because again last year, we had a massive $500 billion
trade deficit. So if you look at what`s happened year after year, we`ve
never had balanced trade accounts. And that translates into lost jobs
inside the borders of this country and the outsourcing of companies from
this nation to others.

MATTHEWS: OK.

KAPTUR: Look at Huffy bicycle.

MATTHEWS: OK...

KAPTUR: Look at Maytag. Look at what`s happened to...

(CROSSTALK)

MATTHEWS: I know what happened to Maytag. I`m very aware of
particular industries, and that`s always -- David, that`s always the best
argument against free trade, a point defense kind of thing. If you look in
particular areas -- Michigan City (ph), a lot of the Midwestern cities have
nothing less than a Blockbuster and a diner left, if they have the diner,
and if they have the Blockbuster. They`re hollowed-out cities.

So when you look at trade that way, city by city, section by section,
it`s a hard fight. If you look at the whole country and you look at the
Silicon Valley or 128 in Massachusetts, areas of the country which have
boomed through high tech and other means, it looks pretty good. How`s it
balance out to you?

DAVID AXELROD, SENIOR NBC POLITICAL ANALYST: Well, look, first of
all, I have great sympathy for Congresswoman Kaptur`s position representing
her area because there have been big economic changes not just because of
trade, but partly because of trade, and they have felt the brunt of it. I
live in the Midwest, Chris, so I`ve seen what you`re talking about.

But what`s at issue right now is this trade promotion authority,
whether this president`s going to have the same authority that every
president but Richard Nixon has had since Franklin Roosevelt, every
Democratic president.

And now they`ve negotiated an agreement that has standards on labor
rights and environmental rights and human rights and gives -- there`s a
fail-safe provision that allows the Congress to take that fast track
authority back if those standards aren`t met.

So it seems to me, you know, there`s an argument here that you should
let this president have at least that much authority, given the fact that
these provisions have been put in this -- in this -- and we do have -- we
do have an issue because, we -- you know, Asia is a -- is a rising market,
a huge market, and you know, will America -- American businesses and jobs
benefit or lose result of this agreement?

I think the president`s going to have to make that case, and I think
that`s what will begin next week.

MATTHEWS: Let`s take a look at what Elizabeth Warren has to say
because she`s the firebrand in the party on this and other issues. Big
labor, of course, is with her. They staged a dramatic rally on Capitol
Hill just yesterday against the president`s trade deal. It`s called the
TPP. They also railed against the authority the president that wants to
get the bill through.

Let`s watch.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: We`re here today to fight.
We are here to fight. Are you ready to fight?

(YES!)

WARREN: Are you ready to fight!

(YES!)

WARREN: All right! No more secret trade deals! Are you ready to
fight?

(YES!)

WARREN: No more secret deals! No more special deals for multi-
national corporations! Are you ready to fight?

(YES!)

WARREN: Are you ready to fight any more deals that say we`re going to
help the rich get richer and leave everyone else behind? Are you ready to
fight that?

(YES!)

UNIDENTIFIED MALE: I`m here today to say not no to fast track, but
hell no to fast track! We are standing together to open up one gigantic
pan (ph) of whup-ass on anybody, on anybody that tries to take our jobs!

(END VIDEO CLIP)

MATTHEWS: Well, others in the Democratic Party are fighting back
against Senator Warren. Democratic senator Ron Wyden of Oregon is throwing
his weight behind legislation supporting the president`s fast track
authority, saying it would make, quote, "historic strides in transparency,
labor, environmental, human rights and open Internet standards."

And President Obama today reiterated his goals for a deal. Quote, "My
top priority in any trade negotiation is expanding opportunity for hard-
working Americans. This deal would level the playing field, give our
workers a fair shot, and for the first time include strong, fully
enforceable protections for workers` rights, the environment and a free and
open market."

Congresswoman, this issue -- why is the American economy so darned
strong if our trade policies have been bad? I mean, what is working in
America? Why does it...

KAPTUR: Well, actually...

MATTHEWS: Why do we have the booming GDP of the world that everyone
wants to move here to live, everybody in the world wants to get in the
United States, legally or not. And you say there`s something fundamentally
wrong with our economic policies. Which is it?

KAPTUR: Well, if you look at the middle class, Chris, if you look at
what`s happened to people`s incomes for the majority of people in our
country, they`re going down. The average worker has taken a terrible pay
cut over the last 20 years.

And I heard what Mr. Axelrod said about Asia, and so forth. We were
promised with the Korean free trade agreement, which I opposed, that we
would have trade surpluses and more jobs in our country. Exactly the
reverse. We`ve had over 75,000 lost jobs now already in our country
because of that Korean deal, and it`s only three years old.

So there`s something wrong with the fundamental trade agreement when
you haven`t had a trade balance in over three decades. That means lost
jobs in this country.

And it isn`t just my part of the country. It`s coast to coast. It`s
furniture jobs. It`s textile jobs. It`s agricultural jobs. It`s, yes,
industrial jobs. It`s home appliances. It`s everywhere in the country.
And people`s incomes are going down. The numbers prove it.

MATTHEWS: OK. OK. Let me go to -- let me go to David now. I want
to go back to you with the same question. David, if you go to the average
department store in the United States, or any kind of store, you`ve got
tremendous options.

I mean, I grew up where you had a couple pairs of pants from South
Carolina or somewhere that were made from different kinds of fibers, and
they weren`t that great. Now you go to any store you want, everything`s
cotton, 100 percent cotton. There`s already -- the pants already have
their -- their -- what do you call it, the cuffs on them in your size.
There`s so much consumer opportunity in any big store in the United States.

The consumers do want free trade, I think. They seem to want anything
they can get their hands at the best possible price and the best possible
quality in the world. They don`t want to be told they can only buy stuff
made in a nearby state. Now, if you go back to protectionism, that`s where
you`d be, where we grew up, where you couldn`t buy stuff from all around
the world.

I don`t know. It`s a tough call.

(CROSSTALK)

MATTHEWS: It`s such a tough call.

KAPTUR: That isn`t the choice...

(CROSSTALK)

KAPTUR: ... not closed markets.

AXELROD: I think that, Chris, people -- you know, the congresswoman`s
right. People also want money in their pocket to buy products, and there
has been -- we have seen a flattening of wages. It`s not just because of
trade.

MATTHEWS: I know.

AXELROD: There are all kinds of forces at play. And so the test for
the administration will be to make the case as to why people will be better
off. I`m not sure that we can draw -- in the 21st century, kind of put a
moat around the United States of America and think that we`re going to be
competitive. But on the other hand, you do have to make the case.

Now, what I understand of what was signed today on this fast track
agreement is that, in fact, the president can`t sign the agreement for 30
or -- I think, 60 days, so that the agreement can be reviewed by everyone,
including the American people.

And then if Congress finds that it doesn`t meet the labor,
environmental and human rights standards, they can rescind the fast track
authority and amend it in any way they see fit. Seems to me that that`s a
reasonable compromise.

MATTHEWS: Let me go back to Marcy Kaptur for a final view (ph) of
this. Would we be better off -- I mean, I`m hearing guys like -- people
from Pennsylvania I grew up with, very much anti-trade, the Democratic
delegation`s always been against trade going back to the beginning. And I
understand that.

Do you think America would be healthier economically now if we had
closed the door on all these trade deals back with Kennedy? Long before
Clinton, we were having trade deals. Do you think we`d be better off the
way we were, with an economy which basically is an American economy, rather
than going worldwide and global? Are you saying we`d be healthier?

KAPTUR: From the founding of the republic, we`ve been a trading
nation. The problem is when you have closed markets, like Japan`s, for
example, or major markets in Europe only allow 10 percent of their goods to
come from elsewhere, we become the dump market for the world.

And that comes out of the hides of our people, and they`ve had it for
too long. It`s gotten to a tipping point, and we have to address this with
a new trade model. That`s where we want to go. I believe President Obama
-- I believe he can help us do this.

(CROSSTALK)

AXELROD: Can I make a point, Chris? The point, Chris, is we need
good -- we need -- we don`t -- we don`t need no deals, we need good deals.
And the question is, will this be a good deal? And that`s the case the
president has to make.

MATTHEWS: He`ll make it beginning next week, I assume. Anyway, thank
you, David Axelrod. Thank you, U.S. Congresswoman Marcy Kaptur of Ohio.

Coming up, that postal worker who landed his helicopter, his
gyrocopter on the lawn of the U.S. Capitol is in court today. That flight
yesterday may have exposed some holes in our security, of course, but it
also made, I think, a bigger point about how this country is letting big,
dark, secret money run our politics. That was his argument. That`s why he
took the risk of flying into the Capitol.

Plus, as the Supreme Court gets ready to take up gay marriage, we`ve
got the fascinating story of Justice Anthony Kennedy, the swing vote on the
court, about the closeted gay man who was his mentor and may have been his
influence.

And everyone knows income inequality is on the rise in this country,
so why did the House of Representatives just vote to give a huge tax break
to America`s richest 0.2 percent? They did away with the estate tax, a
basic American philosophy that helped prevent a permanent aristocracy.

Finally, "Let Me Finish" with the Republican rank and file, America`s
quiet doves.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, here`s a bit of good news for both President Obama
and Hillary Clinton. Americans are feeling more optimistic about the
economy. According to a new Bloomberg Politics poll, one third of
Americans say the economy will get stronger, while just one fifth say it
will get worse. The poll found more optimism about the prospects for jobs,
housing and health care costs compared to last June.

The poll also found Americans give President Obama`s handling of the
economy its best marks since 2009. It`s now 49 percent positive, 46
percent disapproving. Not that great, but better than it was, that`s for
sure.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. Angry over the now legalized
influx of millions of dollars in dark secret money into U.S. elections, a
Florida postal worker flew his one-man helicopter into Washington`s
restricted air space, buzzing the Washington Monument and then setting it
down right on the lawn of the U.S. Capitol on Wednesday.

Homeland Security secretary Jeh Johnson says the home-built craft
traveled undetected.

(BEGIN VIDEO CLIP)

JEH JOHNSON, DHS SECRETARY: This individual apparently literally flew
in under the radar -- literally.

QUESTION: Were you satisfied with the response, I guess?

JOHNSON: Well, again, I want to see all the facts. I want to know
all the facts before I make any conclusions or draw any judgments about
yesterday`s incident.

(END VIDEO CLIP)

MATTHEWS: I think we saw all the facts. Anyway, 60-year-old Doug
Hughes says the stunt was a protest against the country`s campaign finance
morass, and he advertised in advance, by the way, his intentions to perform
this dangerous act of civil disobedience in an interview with his hometown
newspaper. Here he is.

(BEGIN VIDEO CLIP)

DOUG HUGHES, POSTAL WORKER: I`m going to have 535 letters strapped to
the landing gear in boxes, and those letters are going to be addressed to
every member of Congress. I don`t believe that the authorities are going
to shoot down a 60-year-old mailman in a flying bicycle.

(END VIDEO CLIP)

MATTHEWS: Well, talk about special delivery.

Anyway, joining me right now is U.S. Congressman Steve Israel,
Democrat of New York and author of the great novel -- and I mean great
novel -- "The Global War on Morris." And also with us, Politico`s Ken
Vogel, author of "Big Money."

I want to go to Congressman Israel. First of all, it doesn`t scare me
one bit that this guy comes in on that flying lawn mower of his. So what?
And do you think he should be charged at all? It looks like they let him
off on his own recognizance. That`s the sign to me they`re not going to
throw the book at this guy. What do you think should happen?

REP. STEVE ISRAEL (D), NEW YORK: Well, Chris, thanks for having me
on. Look, I was in my office, and when I heard that we had been invaded by
something called a gyrocopter, I thought I was on an episode of "The
Jetsons." I didn`t even know what a gyrocopter was. The fact of the
matter is that, look, he broke the law. There are other ways to deliver a
message.

But what concerns me is that everybody`s is so focused on how he
delivered the message, they`re not focused on what his message is. And
that is when the American people feel so marginalized, so minimized by the
big money that is flooding into American politics, they`re going to resort
to stunts like this. I don`t endorse the stunt, but I understand this
guy`s need to make the case.

MATTHEWS: You know why I don`t talk much about money on television?
I want to get to Ken on this because it`s a journalism problem. Most
people don`t give money to politicians. They vote. They consider that
their sacred responsibility and right, and they get out there and vote.
And they read the paper, the people who watch this kind of program do.
They read the newspaper. They keep up. They know something of importance
to them about how they vote. So that`s how they`re citizens.

There`s a very small percentage of people who think, Well, I want to
go beyond that and kick some money in. Maybe it`s 500 bucks, maybe it`s 50
bucks, maybe it`s 5 bucks, maybe it`s millions of dollars, but they don`t
really know that percentage of people.

Ken I want to get to you on this. I think it`s the reason why it`s
very hard to talk on television about money, period. Economics doesn`t
sell, numbers don`t sell on television, especially. That`s more for print.

But it`s so alien to most people. All they know about it, they see a
guy like Sheldon Adelson, some guy -- a fat cat or the Koch brothers, and
they see these politicians kissing their butts or rings or toes, or
whatever else. And they say, That is sickening to me because that guy,
because he`s rich, has a bigger say than I do, by the millions.

Your thoughts. But nobody -- it`s like they -- I think that guy had a
point, Doug, the other day, the guy who was flying that gyrocopter. He
said nobody talks about it. They`ve given up the fight.

KEN VOGEL, POLITICO: Well, when they`re asked about it, Chris, they
do say and polls do show...

MATTHEWS: When asked about it.

VOGEL: ... right, that they...

MATTHEWS: When asked about it.

VOGEL: Right, that they`re disturbed by this flood of money into
politics. So the problem for folks who have been working to reduce the
role of money into -- in politics and the flow of money into politics is
translating that sentiment into actual voting activity because it`s just
not a top voting issue for most people.

And we`ve seen efforts to make it a top voting issue, but it seems
like just more of the sort of rhetorical thing that, when asked about it,
they will say that they`re opposed to it, but we seldom see it rising to be
a top issue in elections. And that`s why it`s so difficult to actually
generate the political momentum to get Congress or to get state
legislatures to vote to change the laws to make it more difficult for money
to flow into politics.

MATTHEWS: Yes.

VOGEL: Let`s not forget, Chris, and Congressman Israel, these are
folks who have been elected through this system, that no matter how bad
they think it is, it`s still worked OK for them on the last Election Day
for them to be the office.

So it`s very difficult for them to cast a vote that changes a system
that works for them, even if they say oppose it.

(CROSSTALK)

MATTHEWS: OK. Well, I`ll tell you why. Let me tell you.

Let me go back to the congressman.

I want to direct it more pointedly at you. As long as the Supreme
Court is out there saying you have an individual right to a gun. No,
forget the militia reason for having a gun, the core -- the thing we all
grew up with. No, no, you can have a gun for any reason you want one.
Number two, you can spend all the money you want in a campaign, because you
got it.

And once the court ruled that way, people like Hillary Clinton and you
and everybody else who has to raise money goes, well, you can`t blame me.
We passed McCain-Feingold. We did our bit, and the courts overruled us.

ISRAEL: Well, I will tell you who you can blame.

You can blame the Republican majority in Congress for not passing the
DISCLOSE Act. When that Supreme Court decision, which was an insidious and
corrosive decision that is destroying democracy, but when that decision was
made, the Supreme Court actually said, we expect that Congress will require
that these contributions not be secret, that they be disclosed.

House Democrats offered in the DISCLOSE Act that would require
transparency, that would require that these secret donors tell people who
they are. And it was Republicans who voted against and that are keeping
that bill bottled up. People have the right to know.

Let me say one other thing on Ken`s point. He`s right. When you look
at polls, campaign finance reform doesn`t really rate that high. However,
when you make the connection between people`s paychecks being squeezed and
the fact that the special interests are dictating policy and squeezing
their paychecks, people understand that`s true.

They think that the deck is stacked, and then they want campaign
finance reform.

(CROSSTALK)

MATTHEWS: I didn`t realize that. You mean the courts would not
strike down a full disclosure requirement, Congressman? If you people on
the Hill got a 50-plus vote percentage in both houses and you got the
president to sign it -- I think he would sign it.

ISRAEL: No question.

MATTHEWS: You think the courts would uphold it? They would uphold a
full disclosure act?

(CROSSTALK)

ISRAEL: Yes. If you read the Citizens United decision, I think at
least one justice based his support for Citizens United on the assumption
that Congress would require disclosure. And that never happened.

(CROSSTALK)

MATTHEWS: Ken, I had a fight the other day with another colleague
mine of mine I respect that the fact is, there`s a casualness with which
the media does this.

They will put on ad from some -- they will show a piece of an ad or
the whole damn ad for free, some swift boat ad, and I will say, who paid
for that ad? Nobody thinks to put that on, even when they knew it. Well,
they at least ought to say, it`s dark secret money and it`s the same people
that produced that ad that produced the swift boat ads against John Kerry,
the same bad crowd of people.

They`re up to it again. No, the casualness with which people put free
examples of advertising here drives me crazy. But I`m glad to see the
congressman say that, because now everybody watching knows now, you can
write your congressperson, Democrat or liberal or whatever, and say, look,
or Republican, say this. I want to know where the money`s coming from when
somebody gets elected.

That`s -- just give me that. Give me squat, give me something. Maybe
you can`t stop them because of this right-wing court. But I want to know
who`s paying for these stupid ads I have got to watch election time.

Last word from you, Ken?

VOGEL: Yes, disclosure was just one of the miscalculations that was
in that -- embedded in that Supreme Court decision, Citizens United vs.
Federal Election Commission, in 2010. The congressman is right.

There was the assumption that this money flowing into the process
would be disclosed. It hasn`t been. And in fact, people have taken
advantage, groups have taken advantage of another part of the decision that
allows corporations to spend, to use these non-disclosing, non-profit
corporations to pump this money into the system.

The other miscalculation was that this independent spending would be
independent, that unlimited spending would not be done in coordination with
the campaigns. We see with these super PACs, if they`re not coordinated,
they`re pretty close.

MATTHEWS: I have got an idea for Congress and the Capitol Police.
Instead of charging this guy on the helicopter, gyrocopter, why don`t you
give him community service? And his community service can be one hour.

And his one hour should be spent addressing a joint session, a joint
meeting of the Congress. He should walk in there and tell them why he did
that. And that must all be there to watch it`s. That can be his community
service and we can all watch. If they put this guy in jail, what a bunch
of clowns that would be to do that.

Anyway, U.S. Congressman Steve Israel, thank you, and good luck with
your book, "The Global War on Morris."

ISRAEL: Thank you. Thank you, Chris.

Up next: When the Supreme Court hears arguments this month about the
constitutional right to gay marriage, all eyes will be on Justice Anthony
Kennedy? You know why? I think he`s going to vote for it.

And when we come back, the story of Justice Kennedy`s mentor.
Apparently, he was a closeted gay fellow and he may have had a lot of
influence in his personal life and professional bearing on Justice Kennedy
and the way he looks at individuals, regardless of their orientation or
identity. Fascinating possibilities here.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL.

As the Supreme Court prepares to hear arguments over whether states
can keep same-sex couples from marrying, all the attention is focused on
the one man who could potentially make or break the decision. I`m
speaking, of course, of Justice Anthony Kennedy.

This week, the Associated Press writes -- quote -- "Those who have
known Justice Kennedy for decades and scholars who have studied his work
say he has long stressed the importance" -- catch this -- "of valuing
people of individuals. And he seems likely also to have been influenced in
this regard as a pillar of the Sacramento legal community, a closeted gay
man who hired Kennedy as a law school instructor and testified on his
behalf at his high court confirmation hearings in Washington."

That mentor of Kennedy`s, Gordon Schaber, testified at Kennedy`s
confirmation hearing in December of `87. Here he is.

(BEGIN VIDEO CLIP)

GORDON SCHABER, MENTOR OF JUSTICE KENNEDY: I think he will have
compassion and empathy for all those who present themselves. He will do
that without personal predilection, without a specific philosophical
inclination, with an aim at consensus-building. I urge a vote of
confirmation.

(END VIDEO CLIP)

MATTHEWS: The Supreme Court decision on that same-sex matter is
expected some time in June. Boy, is news coming here.

Mark Sherman is the Associated Press reporter who wrote this story and
he joins us now. Also joining us is Paul Henderson, a veteran prosecutor.

Let me start with Mark.

And give us a sense of this. I have always had a sense about the
court decisions of Justice Kennedy, about the idea of the individual, and
the individual as a whole person. And, yes, sex is part of that, sexual
attraction is part of that, sexual behavior is part of that, but they`re
all part of being a whole person, a person who can love other people, and a
person who will act on that love physically.

And the question, that`s always been a portion of who an individual
is, not all they are. And, therefore, I thought it made perfect sense that
this article you wrote suggested that personal experience with someone else
may have reminded him, as we all are reminded in our lives of gay people
and straight people being people first. Your thoughts?

MARK SHERMAN, ASSOCIATED PRESS: Well, that`s right.

There`s probably no doubt that there are several factors that go into
the several opinions that Justice Kennedy has written in favor of the
support of gay rights in the Supreme Court. And lots of people I have
talked to in Sacramento, who widely believe that Dean Schaber was gay, say
they can`t believe that Kennedy wouldn`t have been influenced by his close
friendship with Schaber.

MATTHEWS: And this gift, I have to tell you, I don`t think it`s
nefarious, but it`s kind of interesting. Every year, he would send him a
gift of $400 worth of shirts. Now, if those were Brooks Brothers shirts,
that`s about five shirts at the most, maybe four.

But that`s a lot of shirts, and I always wondered. What a strange
gift. It`s like Dean Smith giving everybody who played for him a dinner
out one night. What is this shirts thing? Have you figured that out?

SHERMAN: Well, I don`t know any more about it than that it would show
up year after year on Kennedy`s financial disclosure form that he has to
file on an annual basis.

MATTHEWS: Paul, give me your thoughts of this, of Kennedy -- why did
he become the conservative? He was Ronald Reagan`s personal attorney.
He`s the guy in the liberty -- in the Lawrence case. In the Lawrence case,
he gave the rights of -- he got rid of the sodomy laws. He said private
behavior, sexual behavior is part of being an individual, part of being a
person capable of loving someone. Let`s drop it as a prohibition.

But here it is on that same question of, is it going to be the liberty
clause, the equal protection law? What is it going to be? Equal
protection law is going to be -- what is it going to be in that 14th
Amendment that`s going to give us the decision?

Go ahead.

PAUL HENDERSON, FORMER PROSECUTOR: I think that is what is going to
drive the train in this analysis. It`s going to be the 14th Amendment and
interpretation of equal protection and figuring out what the conflict is
going to be between the state decisions that have been made and the lower
federal court decisions that have been made with the states of Kentucky,
Michigan, Ohio, and Tennessee, vs. the individual rights, and we keep
coming back to these individual rights here, because I liken those
arguments to the arguments that have been made in the past with race, with
marriage, with sexual orientation.

And so that`s what he`s going to be deciding, and you are absolutely
right, that these jurists don`t make decisions in a bubble. They are
absolutely influenced. They don`t make the law. They interpret the law.
But they also interpret what society is doing, what culture is doing, who
their friends are. All of these things, they value and they interpret. As
he has said before, as he values individualism, those things are what he
uses as a lens to review the law and make decisions.

So I think you`re absolutely correct and this article is spot on in
interpreting...

MATTHEWS: Well, let me go back to -- let me go back to the author of
the article.

Mark, I know it`s not your thinking. It`s your reporting, but the
fascinating thing about -- the old joke is the Supreme Court follows the
election returns. I know that. But that`s a fact. But, also, if you look
at the landmark decisions, and this will be one, like the Brown case or the
prayer in school or the Roe v. Wade case, Roe v. Wade, on abortion rights,
they come out of some of reading of the Constitution which isn`t in there.

They find inherent values in there, like when they find out that black
kids, schoolkids think that white dolls are prettier than black dolls, they
say, wait a minute, we`re sending the wrong values to our kids. Therefore,
if separate but equal sends the message of inequality, we have got to stop
doing it.

That`s an inherent perception. I do think what you were writing about
is fascinating. Have you checked this out with anybody else who said that
the individual personal experience of Judge Kennedy with this mentor really
did foster his identification and empathy for gay people?

SHERMAN: Well, I think it`s really -- it`s probably a complicated
answer. And it`s -- and I did not say in the story, and I can`t say here
that that alone explains it.

But the notion that it`s a part of what helped him form his views, I
think, is perfectly plausible.

MATTHEWS: And, by the way, just to get this straight for everybody,
not -- straight`s the wrong word to use here, but get it clear for
everybody -- the minute you have a gay person in your close company,
especially in your family, all of a sudden, people have different values
and different interpretations.

You know, all politics is local, an old friend of mine used to say,
Tip O`Neill, and it`s so true. The local it gets -- the more local it
gets, the more you empathize.

Hey, Paul Henderson, sir, thank you for joining us out here in San
Francisco, and thank you, Mark Sherman, for a very interesting insight.

(CROSSTALK)

MATTHEWS: Up next: the House of Representatives just voted to get
rid of the estate tax. Whoa. That`s great for some people. The
quintessentially American philosophy, by the way, that helps prevents us
from being a permanent aristocracy is having an estate tax. It`s so the
money doesn`t just accumulate in a few families` hands.

Anyway, it comes at a time when everyone is concerned about the income
gap in this country, and this would make the gap larger.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

PAGE HOPKINS, MSNBC CORRESPONDENT: I`m Page Hopkins. And here`s
what`s happening.

The NFL has reinstated Vikings running back Adrian Peterson. Peterson
was suspended last year for violating the league`s personal conduct policy.
He pleaded no contest to hitting his son with a switch.

Federal charges have been filed against an Ohio man who allegedly
traveled to Syria for terror training, then returned to the U.S. He
planned to attack police or soldiers.

And WikiLeaks has posted more than 300,000 documents from the
devastating hack at Sony last year. Sony has condemned the move -- and now
we`re taking you back to HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Republicans have long criticized -- been criticized for favoring that
1 percent of top earners in this country. But today, they`re doing a big
favor for the richest two-tenths of those 1 percenters, two-tenths of 1
percent.

House Republicans today passed a resolution, 1105, it`s called, a bill
it called the Death Tax Repeal Act, which would bring an end to the
inheritance tax in this country. It`s a reflection, of course, of
Republican priorities at a time when income inequality is a top concern
among American people, and it runs contrary to the fundamental belief in
this country long held that wealth should not be passed down among an
aristocratic class, but should be earned.

That`s why we have the law on the books in the first place.

We`re joined right now by the HARDBALL roundtable, Howard Fineman,
global editorial director for The Huffington Post, Associated Press White
House reporter Nedra Pickler, and Republican strategist John Brabender.

Are you any of you people beneficiaries of large inherited wealth?
Because, if you are so, you have got to raise your hand now and tell us why
we will defend the system the Republicans are putting in place. Just put
your hands up if you`re the inheritor of a "Downton Abbey" estate.

(CROSSTALK)

JOHN BRABENDER, FORMER SENIOR SANTORUM CAMPAIGN ADVISER: I`m give
everything to you, Chris, that I have.

(CROSSTALK)

MATTHEWS: OK, fine. OK. Let`s start.

(CROSSTALK)

HOWARD FINEMAN, NBC CHIEF POLITICAL CORRESPONDENT: Remember how you
talked about when you had two pairs of pants, you know, when you were
growing up?

MATTHEWS: Yes. Well...

FINEMAN: I had maybe two also.

MATTHEWS: OK.

Let me start with you, Howard, my fellow pink-diapered baby -- not
exactly in either case. Let`s start with this. It seems to me that the
country has held this philosophy, that we don`t want to end up with Latin
America, with 17 families running a country, or Europe or the Germans or
the Brits with a few families owning all the land and all the money,
because it just kept accumulating over generations.

We basically say, you can leave a ton of money to your kids, but only
a ton, and then it`s got to stop. So the Republicans don`t think a ton is
enough, $10 plus million is not enough to give to your kids.

So, so how can they win that case and why did 11 Democrats join them
today?

FINEMAN: That`s a mystery to me. I don`t think they can win the
case. If you look at the polling numbers generally, let`s concede two
points.

Number one, rich people are paying a greater and greater share of the
taxes, but the reason they are is that they`re making more and more of the
money as compared to everyone else.

Number two, Americans do like tax cuts, but they don`t, I think, like
this kind. They`re not going to like this kind, because there are maybe
5,000 people a year, at most, who can conceivably benefit from it. These
are people who have, if they`re married, have more than $10 million worth
of assets to pass on in their estate. Nobody`s going to be sympathetic
with them.

And John may disagree, but I think the Republicans are kind of -- this
is kind of like a reflexive thing. This is like you take, in the movie
"2001", you take almost all the memory chips out and the only one left is
the one that says, we`ve got to cut taxes, we don`t care how we do it.

MATTHEWS: Yes.

John Brabender, I would think one mistake people have who have left
that much money to their kids, they didn`t get to spend it. Why didn`t
they spend their money? Why -- they had time, why didn`t they go spend the
money? What were they saving it for?

I`m just kidding. Of course, I`m not kidding.

JOHN BRABENDER, REPUBLICAN STRATEGIST: Yes, you`re not kidding.

MATTHEWS: But seems like a bad value -- cloth-cut Republicans or 90
percent of the Republican people or a little bit better than regular, they
don`t benefit from this kind of thing.

BRABENDER: Well, and let me say two things about it.

One is, it is a bad tax. And sometimes because it`s on a small number
of people or they`re very wealthy, we think -- oh, then it`s a good tax.
No, it`s a bad tax. It`s an unfair tax to get rid of.

But the optics of it, for the Republican Party, are terrible.
Especially coming into a presidential race, where what we`re going to do is
get hard-working families to believe that we`re representing and fighting
for them, and we become Pavlovian, almost for cutting taxes for wealthy
people and we`re opposed to $1 raise in the minimum wage. And hard-working
families who aren`t either affected by either of those just get the message
that we don`t understand their lives and we`re not fighting for them. And
I think that`s the real mistake.

MATTHEWS: OK, this comes at a time that most people in this country
agree that income inequality is getting worse. A Bloomberg poll just today
finds that 69 percent, seven out of ten Americans say the income gap
between rich and poor is getting bigger. Only 10 percent say the gap is
getting smaller, and they don`t know what they`re talking about.

When it comes to the solution, the Americans are divided. Catch this
-- this is a fascinating distinction into two political parties. There`s a
dime`s worth of difference between parties. It`s a big one. Seventy
percent of Democrats think that they should implement policies to shrink
the income gap, to shrink it. But 75 percent of Republicans say the
government should stand aside, even if the income gap grows.

So, Nedra, just reporting on this, there is a difference in party
approach. Republicans say if there`s a gap that grows because of
inheritance taxes not being there so you can leave all your money to your
kids and grandkids and great-grandkids, and that raises the gap. They`d
say, fine, that`s the way the market works.

NEDRA PICKLER, ASSOCIATED PRESS W.H. REPORTER: You can make the
argument that this is a winning argument for both sides, because it`s all
based on how they frame it, right? The Republicans are talking about a
death tax. They`re talking about these poor family farmers, not poor in
money, but they`re going to lose their land when they try to pass it on to
their children.

And then on the other side, you know, Barack Obama had an event
yesterday on this, and it was just like pitching him up a softball. You
know, he was in North Carolina and he talked about how this tax would only
hit a hundred and some people in the state, versus the 44 million people
that he could help if he had 270 million.

MATTHEWS: You`re right, they`re both working their sides of the
street.

Anyway, Republican Frank Luntz, we call him Fluntz, he led the effort
to change the name of the estate tax, as it was previously known, to the
death tax.

Here`s how he defends the use of the term in his book, "Words That
Work": "The notion of the phrase death tax is euphemistic or Orwellian does
not withstand scrutiny. For one thing, it supposes that estate tax and
inheritance tax are purely neutral terms. In fact, estate conjures up
images of rolling green hills and vast real estate holdings of JR Ewing or
Donald Trump rubbing their hands together and cackling like corporate
villains or toasting with champagne glasses."

There, Howard, Frank Luntz admitting that you`ve got to call it a
death tax, not a estate tax, because estate tax sounds too evil. Your
thoughts?

FINEMAN: First of all, the word "estate," estate in an estate tax is
an old glib word if what gets passed to one generation to another. It
doesn`t mean a big, rolling estate. So, there`s the case of the huge straw
man that Frank Luntz built up so he could cleverly try to make it sound
like someone`s being killed if you apply this tax. You know, that`s what
Frank Luntz the good at.

But the thing here is, if you want to really get down into the depths
of this, independent voters, I think, in that poll and in other polls, are
very worried about income inequality. I don`t know where precisely they
are on this. I bet they`re quite skeptical on giving a few thousand people
a year on low taxation on passed along inheritance.

By the way, the other thing this bill would do is get rid of capital
gains on all the stuff that was accumulate d by those people. And capital
gains tax is another thing they also consider a double tax. So, actually,
this bill in their framework is a triple tax.

MATTHEWS: Let`s put President Obama down for a veto on this baby. I
think if it gets to him --

FINEMAN: Yes, I would say.

PICKLER: Absolutely.

MATTHEWS: Don`t you think?

PICKLER: He said that.

MATTHEWS: The roundtable is staying with us right now.

And up next, George W. Bush admits, confesses, whatever, that he`s Jeb
Bush`s biggest problem.

But it`s bigger than that. Republicans don`t want war. That`s my
theory. The regular Republican, man and woman, father and mother,
grandparent, doesn`t want to see their kids going off to another W-type
war. And maybe W`s got this one right, he`s at fault.

The place for politics is coming back.

(COMMERCIAL BREAK)

MATTHEWS: The Republican presidential field may soon be getting even
bigger. We reported yesterday that Ohio Governor John Kasich`s interested
in getting into the presidential race. Well, today we learned that he`s
launching now a political committee that allows him to raise money as he
considers his candidacy. The Ohio Republican won his second term last year
in a landslide, and he could make some noise in this crowded field. I
think he ought to make some noise. He`s a pretty good candidate.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

It`s been two months since President Obama sent his proposal to
authorize the use of military force against ISIS up to Capitol Hill. Yet,
as "The Wall Street Journal" reported today, it hasn`t been a high priority
by Republican-led Congress by any means.

We`re back with the roundtable: Howard, Nedra, and John.

Howard, you know, for all the trumpery coming out of the Republican
Party, vis-a-vis Iran, as pointed out in the paper today, in "The Wall
Street Journal", there`s no real excitement about going to an actual ground
war. My theory, the Republican rank and file is nowhere as hawkish as the
big money people are.

FINEMAN: No, no, no. No, they`re going to say that Barack Obama and
therefore Hillary Clinton are weak and naive in some way. But they`re not
going to prove it by advocate by sending in troops. They`re not going to
do it, because the bitter memory of the American people is still too fresh
and still too strong about both Iraq and Afghanistan.

And I think that presents a tremendous opening for Rand Paul, who`s
going to be, I think, unless I`m mistaken, the only flat-out critic of the
entire theory of the neocons in the Republican race.

MATTHEWS: And, John, that`s one reason why I see there`s a difference
in the top of the regular, the cloth-coat Republicans, the regular people
like my parents, who are Republican. They weren`t rich at all, but they
were Republican, and they didn`t -- I don`t think they were hawks.

Now, my question here is: are the Republican Party at the base, people
in Pennsylvania, all across that state, where I`m familiar with and Howard
is -- are they as hawkish as the big money people who talk in this
presidential debate, who all seem to be hawks, except for Rand Paul?

BRABENDER: Well, it depends on what your definition of hawk is. If
your question is --

MATTHEWS: Horniness to go to war. The urge to go to war as the first
result, the first resort.

BRABENDER: But see --

MATTHEWS: You hear it all the time from these people.

BRABENDER: This is where we get into problems. There`s nobody that
sits around and says, hey, you know what, we haven`t had a good war in a
while.

MATTHEWS: Dick Cheney! Dick Cheney! All the neocons that fill the
op-ed pages of the op-ed pages of the newspaper are constantly talking
about bombing Iran. What do you mean nobody`s talking and pushing it?

BRABENDER: There are Republicans in the base who feel that the top
priority of government are to keep families safe from somebody who would
want to harm America.

MATTHEWS: What does it have to do with bombing Iran? What does it
have to do with going to war this Iraq?

BRABENDER: The belief is that Iran has played us to build a nuclear
bomb --

(CROSSTALK)

MATTHEWS: OK, OK, you`re as much a problem -- you`re as big of a
problem as the money guys. I mean, that`s absurd.

BRABENDER: Here is what I can tell you.

(CROSSTALK)

MATTHEWS: -- Republican thinks that Iraq attacked us on 9/11? That`s
because --

(CROSSTALK)

BRABENDER: I didn`t say that. Don`t put those words in my mouth.

But what I can tell you, about polling data, is that people -- when
you ask about national security, has gone from being about the sixth issue
three years ago to the second or third issue now. And a lot of that is
Iran, it`s ISIS and in the world right now, there is a sense on of unease
of safety in America.

FINEMAN: But I don`t think the sense of unease though necessarily
translates into a commitment by Republican candidates to put troops on the
ground. I think this time around, they are going to be more cautious given
the history of the Republican Party and George W. Bush`s wars.

PICKLER: The Republican candidates --

MATTHEWS: Go ahead, Nedra, because I`m looking at what is happening
on the two committees in Congress and nobody on the Republican side wants
to fight this war against ISIS ands authorize. Nobody, nobody`s doing it.
Your thoughts?

PICKLER: Well, the Republican candidates are all over the map and it
reflects where the Republican voters are. We saw a year or so ago where
they were shying away against war. But I saw a poll numbers just last
month said that three-quarters would favor sending in troops to fight the
Islamic State.

So, it is quite extraordinary, though that you had leaders in Congress
demanding that the president send up some language for war authorization.
He did that in the midst of the horrible deaths of American citizens and
our allied citizens and it just sat there. And nothing has happened.

There was supposed to be a hearing on it and they ended up debating
Iran instead. They`re not taking this very seriously so far.

MATTHEWS: It`s better to blow the trumpets on Iran than fight the war
with ISIS.

Anyway, thank you, Howard Fineman. Thank you, Nedra Pickler. And
thank you, John Brabender.

When we return, let me finish with the Republican rank-and-file. My
belief, they are America`s quietest doves.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this: I believe the average
Republican voter in this country has had it the hawks, the neocons, the
ideologues, all the asserted armchair generals, including the chicken hawks
who have taken us so stupidly into war.

I know the money people, the toes of which the presidential candidates
need to kiss, are big talkers about war with Iran or Syria or with
Russians. Talk is cheap. It doesn`t cost a dime to send this country`s
soldiers racing back in the desert. But the regular people out there who
vote Republican for good reasons of their own, lowered taxes, less
government in their lives, religious values, sending those soldiers to
battle has a price -- it`s their sons and nieces and nephews who were
going. It`s their family that`s worrying, hoping to see their loved ones
come home and -- God willing -- in one piece.

If you want real proof that the Republican rank-and-file, the little
people of the Republican Party, if you will, don`t like these wars, just
check on what`s happening with that proposal of President Obama to
authorize the fight with ISIS. It`s not going anywhere. And the reason
it`s not going anywhere it`s because the Republican congressmen on the
committee know that the people back home don`t want us getting in a real
war, a fighting war.

They can live with the presidential wannabes blowing their trumpets
for the money guys, hustling off that to Vegas or to wherever, the fat cats
set to show up their trumpery, they can live with the performance art. The
Republican people are saying, don`t talk about using our kids as cannon
fodder just so the big shots can strut around to the next fund-raiser.

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

"ALL IN WITH CHRIS HAYES" starts right now.


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