updated 10/8/2004 12:11:39 PM ET 2004-10-08T16:11:39

Guest: Ben Ginsberg, Stephanie Cutter, David Dreier, Roger Altman

CHRIS MATTHEWS, HOST:  Tomorrow night, President Bush and Senator John Kerry meet in St. Louis for the second presidential debate.  Tonight, new poll numbers show the race is closing up, with the battleground states living up to their names.  Just weeks before November 2, the election is tighter than ever before.  Could be this be, as Ron Reagan suggested earlier, the tipping point, where the campaign tilts dramatically towards President Bush or John Kerry?  Senator Kerry gained ground after the first presidential debate.  Can he maintain that momentum, or will President Bush retake the lead and the momentum?  One thing is for sure, debates matter.

Live from Washington University in St. Louis, let‘s play HARDBALL.

(BEGIN VIDEO CLIP)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  If America shows uncertainty or weakness in this decade, the world will drift toward tragedy.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL NOMINEE:  Saddam Hussein didn‘t attack us.  Osama bin Laden attacked us.  Al Qaeda attacked us.

BUSH:  First of all, what my opponent wants you to forget is that he voted to authorize the use of force and now says it‘s the wrong war at the wrong time at the wrong place.

KERRY:  Iraq was not even close to the center of the war on terror before the president invade it.

(END VIDEO CLIP)

MATTHEWS:  Good evening.  I‘m Chris Matthews.  And welcome to MSNBC‘s special coverage of the presidential debates.  We‘re broadcasting live from the campus of Washington University in St. Louis, where tomorrow night, President George Bush and Senator John Kerry take the stage for their second debate.  Excitement‘s building, obviously evident in the fact we had more people watching the night of the vice presidential debate the other night this week on MSNBC than we had last week for the first presidential debate.

More important, obviously, the Reuters-Zogby poll has President Bush now ahead by 2 points, just 2 points.  The Associated Press has John Kerry ahead by 4 points.  Of the 16 so-called battleground states, here are the states where John Kerry now holds the lead: Arkansas, Florida, Iowa, Michigan, Minnesota, Nevada, New Hampshire, New Mexico, Ohio, Oregon, Pennsylvania, Washington state and Wisconsin.  The states where President Bush now has the lead, of the 16 battleground states, Missouri, Tennessee and West Virginia.

And tomorrow night, the country tunes in for a second presidential debate, which will follow a so-called town meeting format in which voters, non-committed voters, will be the ones asking the questions.

My panel tonight, from NBC News, Andrea Mitchell, Ron Reagan, MSNBC political analyst, Republican election attorney Ben Ginsberg and MSNBC political contributor Patrick Buchanan.

Ron Reagan, a couple of hours ago—in fact it was about an hour-and-a-half ago—you raised the interesting point.  Why do we keep assuming this is going to stay close?  Why do we assume, simply because it‘s gotten very close, that three weeks from now will be decided by a close election?  Explain your thinking.

RON REAGAN, MSNBC POLITICAL ANALYST:  Well, it just may not happen that way.  I know you have a theory about races with incumbents never being close, that they always...

MATTHEWS:  In the end...

REAGAN:  ... break one way...

MATTHEWS:  ... people make the big decision.

REAGAN:  Make a big decision.  And it could happen, on the basis of something that happens tomorrow tonight.  If George W. Bush turns in a performance like he did the last time, I think he‘s really going to suffer for it because I think that there are people out there who are on the fence, in a way.  They‘re waiting to see...

MATTHEWS:  Right.

REAGAN:  ... to the last minute, Is this guy the guy I see sitting in the chair?  And if he doesn‘t show up, they‘re going to decide, Not that guy, the other guy.  And he may not be able to get them back.

MATTHEWS:  Andrea, there is a precedent for this.  Jimmy Carter was in a very close race with Ronald Reagan back in 1980, very close, up until the last weekend.  And all of a sudden, the floor fell out and it was a 10-point drop.

ANDREA MITCHELL, NBC CHIEF FOREIGN AFFAIRS CORRESPONDENT:  Exactly.

MATTHEWS:  He lost by 10 in a landslide.  Could that happen against an incumbent president who seems to be liked by the American people?  Jimmy Carter was not.  This president seems to be liked.  Can you take a free fall when you‘re that popular personally?

MITCHELL:  I think it‘s unlikely.  I think there are two things that could happen in the next 24 hours—one thing has already happened—that could reach critical mass.  George Bush is going to get the final jobs report before the election, tomorrow morning, around 8:30 tomorrow morning.  And no one knows—I guess the people in the government right now know, but none of us know what that outcome is.

MATTHEWS:  Let‘s bet on it being better than 5.3...

MITCHELL:  Well, let‘s bet on it being a little bit better...

(CROSSTALK)

MATTHEWS:  ... which is good news for the Republicans.  Isn‘t that enough to cool at least the well-off peoples‘ concerns?  It may not cool the unemployed guy‘s concerns because he‘s still unemployed.

MITCHELL:  And it‘s the unemployed guys in states like Ohio and Pennsylvania and Wisconsin and West Virginia that are going to make the difference.  So it probably will not move votes.

MATTHEWS:  If you‘re loading trucks right now for 7 bucks an hour, and you were making $15 or $20-plus in a factory job five years ago, are you going to thrilled by the fact the unemployment rate‘s gone down a tenth of a point?

MITCHELL:  No.  And the other thing that has already happened—and we have to see how it plays out—is, I think, terribly important—is the report on weapons of mass destruction because that could conceivably give John Kerry, if he plays it right and if he fits into this format tomorrow night at the debate, it could give him a real wedge against President Bush.

MATTHEWS:  Let me go to Ben right now, and then to Pat.  This part of the country, the middle part of the country, “flyover country,” to a lot of Hollywood set and the New York crowd, is the real country.  This is America out here.  And although this school may be somewhat sophisticated and liberal, most of this area of Missouri and Ohio, southern Ohio, and this part of the country is decisive in presidential elections.  What are the issues that are going to break in the last three weeks?

BEN GINSBERG, REPUBLICAN ELECTION ATTORNEY:  The issues are very much who can lead the country, if there are future terrorist attacks, how we deal with Iraq, and the economy—jobs, jobs, jobs, as we‘ve been talking about.  Those are all things that the president needs to contrast himself with John Kerry tomorrow.  And this really is about who‘s going to lead the country in uncertain times.  So what happens in debates is important.

MATTHEWS:  So you make it sound like the thinking out here in this part of the country—the true middle of the country—is the same as the thinking in the Northeast.

GINSBERG:  Well, I...

MATTHEWS:  In other words, you say it‘s concern about an attack.  I didn‘t think it was that—the people aren‘t expected to have a 9/11.  Do they?

GINSBERG:  I think everybody in every community in America is aware that it could happen here.  And after the 9/11 attacks occurred, there were people who were concerned about every nuclear power plant in their area...

MATTHEWS:  Right.

GINSBERG:  ... and thought their railway station could be next, their football games.  So I think those concerns are universal.  If there‘s a split in the country, I‘m not sure it‘s East Coast, middle of the country, West Coast as much as urban-rural areas.

MATTHEWS:  Pat, your gut on what people are going to be deciding on in the next three weeks.  The undecideds.

PAT BUCHANAN, MSNBC POLITICAL CONTRIBUTOR:  I think after the debates are over on the 13th, you‘re going to have an all-out war by the Republicans on Kerry, trying to bring him down again, and the Democrats on Mr. Bush.

MATTHEWS:  What issues will they use to tear him apart?

BUCHANAN:  I think that they‘re going to try to tear the president part on misleading us in the war in Iraq.  My guess is, if you get good economic numbers tomorrow—and that would be, say, 200,000, 250,000 jobs, a slight tick downward in the unemployment rate—people will say Bush is right, things are getting better.  It‘s not going to solve the problem of the $7-an-hour fellow, but a lot of folks who are saying, Am I going to have a job, say maybe Bush is the right guy for this.

The president‘s problem is this, Chris.  At that Miami debate, he gave away his most priceless asset, and that‘s the aura of the presidency.  And he had that...

MATTHEWS:  How‘d he do that?  How do you see him doing it?

BUCHANAN:  It was during the cutaways, Chris, more than anything else.  Here was a guy that was miffed, who was ticked off, who as peeved, who was non-presidential and who felt like, you know, I want to take this guy out, whereas Kerry, for the first time, stood up there and appeared—I mean, he wasn‘t a warm figure, but appeared like a president, making his points, appeared correct and orderly and gentlemanly.  And he was very effective.  So all of a sudden, that aura was gone from the president, and some of it transferred to Kerry.  And this has wiped out what I think was a significant 6 or 7-point lead.

George Bush could have locked that up had he simply scored a tie, I think, down there in Miami because he was 7 points ahead.  People were saying, Look, we made up our mind.  We don‘t want this character.  We don‘t like this Kerry guy.  And they would have gone with the president, but now it‘s a—now it is a toss-up.

And you notice those states you listed, Chris.  Five of them that are now either Kerry‘s camp or Kerry-leaning are red states...

MATTHEWS:  Yes.

BUCHANAN:  ... Florida, Ohio, Nevada, New Hampshire, and one other one in there.

MATTHEWS:  Well, we‘ll see how well they do when they‘re up close and personal Friday night.  I think you made a good case that John Kerry looks like he belongs in the hall of presidents down there at Disney World...

BUCHANAN:  Right.

MATTHEWS:  ... one of those presidents that looks like a president. 

But how about when they get up close to the people?

BUCHANAN:  This is—now, this is where the president—look, the president is a personable man.

MATTHEWS:  Right.

BUCHANAN:  He‘s got—he gets along with people.  He relates to people much more than Kerry, who‘s a cold fish.

MATTHEWS:  He‘s spontaneous, too.

BUCHANAN:  Exactly.  When you ask him questions, the vocabulary might not be hot...

MATTHEWS:  Right.

BUCHANAN:  ... but you can see he‘s empathizing.  And so he has a golden opportunity...

MATTHEWS:  Right.

BUCHANAN:  ... to show this is a man with a heart and a soul tomorrow night.  And I think he will.

MATTHEWS:  I think he‘s going to look good tomorrow night.

The panel‘s staying with us, and when we come back, we‘ll talk to Stephanie Cutter of the Kerry campaign to find out what John Kerry is planning to do in tomorrow night‘s debate to match his success in the first.  By the way, she‘s here.  She‘s going to talk to us down there in the pit with all those dangerous-looking students down there!

You‘re watching HARDBALL, live from Washington University in St.

Louis, on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KERRY:  This president has made, I regret to say, a colossal error of judgment.

BUSH:  He voted to authorize the use of force, and now says it‘s the wrong war at the wrong time at the wrong place.

(END VIDEO CLIP)

MATTHEWS:  (UNINTELLIGIBLE) in the campaign for president.  Stephanie Cutter is communications director for John Kerry‘s presidential campaign, and I guess also for the John Edwards campaign for vice president.

You know, this campaign has taken many turns.

STEPHANIE CUTTER, KERRY CAMPAIGN COMMUNICATIONS DIR.:  Yes.

MATTHEWS:  A week ago, it took a turn toward your campaign because your candidate, in the eyes of so many people, did so well in that first debate.  Tell me about what you see in the second debate, which is going to involve taking questions from real people.

CUTTER:  Well, Chris, I think that the American people liked what they saw last week because they saw somebody standing before them, leveling with them, telling them the truth about what‘s happening on the ground in Iraq and how we‘re going to win the war on terror.  Tomorrow night, it‘s another big challenge for us.  You know, George Bush has been practicing all week.  I think we‘re going to see a very different George Bush, somebody who‘s been to the Karl Rove charm school over the past week, somebody who won‘t be as—scowling in the camera.  But you know, he has an opportunity to...

MATTHEWS:  I guess you know you‘re in trouble when you ask Karl Rove to teach you charm, right?

(LAUGHTER)

MATTHEWS:  Just kidding, Karl!

CUTTER:  Well, they have.

MATTHEWS:  Yes, well, tell me how you teach a guy how to be charming? 

Let‘s talk about your candidate...

CUTTER:  OK.

MATTHEWS:  ... because you know more about that.  John Kerry is a very formal man.  He comes from an—he‘s an old-school kind of a guy.  He‘s a little bit older than me, but not much.  But he seems to be very formal.  How will he adjust to an up-close-and-personal environment?

CUTTER:  Well, he‘s not going to adjust.  He‘s just going to be himself.  You know, we have been doing town halls now for two years.  That‘s how he won the primaries, by doing town hall after town hall after town hall and saying to the American people, you know, Look me in the eye and I will tell you the truth.  And that‘s what he‘s going to do tomorrow night.  He‘s going to talk about his real plans for Iraq, he‘s going to talk about his real plans for the war on terror and his real plans to make us stronger here at home.

MATTHEWS:  How does he adjust to the cultural difference?  He was very successful in Massachusetts politics.  And of course, he comes from the Northeast and—enough of the Northeast.  I know this is true for all religions.  And this is really a generalization.  People are much more reserved about their religious faith.  They just are quiet about it.  Maybe it‘s an old Yankee tradition.  You get to this part of the country, into the so-called Bible Belt, people want to see you express your religious beliefs.  All the polls show the people want to see a very religious president.

How does he express his kind of religion to a part of the country, this part of the country and south from here, Tennessee, where you‘re doing well, and Arkansas, where you‘re doing well, that coincides with the way people here think of religious expression?

CUTTER:  Well, John Kerry is a man of faith.  He has been his entire life.  He talks about faith getting him through the Vietnam war, getting through some of the toughest times in his life.  He doesn‘t wear his religion on his sleeve, and he doesn‘t use it...

MATTHEWS:  But don‘t people want...

CUTTER:  ... for political purposes.

MATTHEWS:  Don‘t people want him to?

CUTTER:  Well, people want him to do a lot of things, and he can only be himself.  He talks about faith in terms of, you know, why he does certain things, why he believes in certain things and fights for certain things, the acts of faith.  And he‘s just going to be himself.  He‘ll talk about what is important to him and where he wants to take the country.

MATTHEWS:  Why did he go on Dr. Phil?

(LAUGHTER)

MATTHEWS:  I watched it.  I mean, he was amazingly honest...

CUTTER:  It was good!

MATTHEWS:  ... in talking about divorce and how to prepare kids for divorce, all that very personal stuff.

CUTTER:  Yes.

MATTHEWS:  I couldn‘t believe he did it!  Why‘d he—how did you get him to do that?

CUTTER:  Did you watch it?

MATTHEWS:  Yes, I was watching it in the make-up room.  I didn‘t exactly set my clock for it.

CUTTER:  Well, it‘s to get...

MATTHEWS:  But I did watch it.

CUTTER:  ... to people like you.

MATTHEWS:  Well, who were the—who was he after in that sort of turn?

CUTTER:  Well, we‘re trying to reach every American through as many means as possible.  And obviously, Dr. Phil provided a certain avenue and...

MATTHEWS:  Is he going to go all the way to Howard Stern next or what? 

What are you going to do?

CUTTER:  You never know.  There‘s three weeks left.

(LAUGHTER)

MATTHEWS:  Well, now it‘s desperate, if you do Stern, right?  Let me ask you about the poll numbers.  They‘re very interesting.  Today you have a poll that shows you—one of the national polls shows you 4 up, another national poll shows you 2 down.  What do you think it is?

CUTTER:  You know, it is a very, very close race.  We always knew it was going to be.  It‘s a 50-50 nation, and it‘s going to be right up until the end.  I think that the AP poll today that shows us 4 up is telling not in the horse race, but in the underpinnings of the poll, where they talked about the direction of the country and the support for what the president is doing in Iraq.  You know, 40 percent of the American people think the country‘s on the right track.  That means 60 people don‘t believe in what the president is doing.  Those are the important statistics.

MATTHEWS:  Are you worried that after all the debates are over, and

your candidate maybe does well in the next two debates—and certainly

your party‘s done OK in the second one, you did very well in the first one

·         that the last three weeks of the campaign, the White House will run a scare campaign, they‘ll talk about abortion rights, they‘ll talk about gay marriage, they‘ll use all the sort of the Halloween scare phrases to scare the cultural part of the country, like this part, into voting Republican?  What would you do to counter that?

CUTTER:  Well, I don‘t know how that would be different from what they‘ve doing all along.  I mean, it‘s been a scare campaign, fear and smear, since the beginning.  I mean, we‘ve been facing this since March.  Even before we won the primaries, they‘ve been using the politics of fear to win this race.  We‘ve seen ads go out and leafleting saying that we‘re against the Bible, I mean, stuff that‘s just not true.

I think the American people are going to see through that.  They want to talk about the real issues.  Tomorrow, job numbers comes out.  Unless the president creates 1.6 million new jobs, he‘s going to be the first job-loss president since Herbert Hoover...

MATTHEWS:  So he has to do that...

CUTTER:  ... in 72 years.

MATTHEWS:  ... in one day, tomorrow, right?

CUTTER:  In one day, yes.

(LAUGHTER)

MATTHEWS:  OK.  Are you predicting the jobless rate goes up or down tomorrow?

CUTTER:  I think it‘s going to go up a little bit, but it‘s not going to go up enough.

MATTHEWS:  You mean it‘s going to go down.

CUTTER:  Yes, that‘s what I mean.

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  ... but I know what you mean.  In other words, it‘s going to go from 5.4 to 5.3 or something like that.

CUTTER:  Right.

MATTHEWS:  And you‘re setting that bar low so if anything happens, you can say...

CUTTER:  Well, I don‘t have to set...

MATTHEWS:  ... it‘s worse than you though.

CUTTER:  I don‘t have to...

MATTHEWS:  OK...

CUTTER:  ... set a bar.  It‘s a fact.

MATTHEWS:  OK.  Congratulations.  You‘re running a great public relations effort here. (UNINTELLIGIBLE) very well.  Stephanie Cutter, communications director for the Kerry campaign.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Direct from the Village Gate (ph) in downtown Manhattan.  Just kidding.  Welcome back to HARDBALL.  That was, in fact, the Washington University band.  We‘re here in St. Louis.

With less than four weeks to go in the election, the Bush administration‘s top weapons inspector reports that Iraq abandoned its weapons of mass destruction programs years ago.  HARDBALL election correspondent David Shuster joins us now with more—David.

DAVID SHUSTER, HARDBALL ELECTION CORRESPONDENT:  Well, Chris, this is the last story the Bush administration wanted just weeks before the election, and it‘s an issue the White House has been trying to avoid for months.

(BEGIN VIDEOTAPE)

(voice-over):  In June, when President Bush was asked about Iraq‘s missing weapons of mass destruction, he said it was too early to comment.

BUSH:  But we‘ll wait until Charlie gets back with the final report, and then I‘ll be glad to report.

SHUSTER:  “Charlie” is Charles Duelfer, the top U.S. weapons inspector.  On Wednesday, he reported to Congress.

CHARLES DUELFER, U.S. WEAPONS INSPECTOR:  We did not find stocks of either chemical or biological weapons.

SHUSTER:  In fact, the Duelfer report concluded Saddam destroyed his chemical and biological weapons after the first Gulf war, ended his nuclear program 13 years ago and never restarted it, and abandoned biological weapons research eight years ago because of U.N. sanctions.  Duelfer testified that based on CIA interrogations with Saddam, the Iraqi leader deliberately misled the world to scare Iraq‘s real enemy, Iran.

DUELFER:  So he wanted to create the impression that he had more than he did.

SHUSTER:  Duelfer added, however, that Saddam retained the intent to restart his weapons program and had the capability to do so.  It‘s what the president jumped on today.

BUSH:  He retained the knowledge, the materials, the means and the intent to produce weapons of mass destruction.  And he could have passed that knowledge onto our terrorists enemies.

SHUSTER:  Still, intent to restart a program or the possibility that knowledge could get passed along is far different from the imminent threat the president suggested before the war.

BUSH:  We cannot wait for the final proof, the smoking gun, that could come in the form of a mushroom cloud.

SHUSTER:  The harshly critical report is just the latest in a series of blows to the administration.  This week, the president‘s former administrator in Iraq, Paul Bremer, said too few troops had been sent to Iraq to keep control.  Last week, the CIA said it doubted Saddam Hussein had helped terrorists, as the administration had charged.  And over the summer, CIA analysts said Iraq could be expected in the next 18 months, in the best-case scenario, to achieve a tenuous stability, in the worst case, to dissolve into civil war.

Meanwhile, John Kerry continues to pound away on the growing evidence that the Bush team had its facts and its planning lethally incomplete.

KERRY:  You‘ll always get the truth from me, in good times and in bad times.  And I will never mislead the American people.  The president has not met that standard, and America is ready for change.

(END VIDEOTAPE)

SHUSTER:  Even Republican strategists acknowledge tonight that the terrain in this election has now shifted, and instead of focusing on John Kerry down the stretch, the Bush campaign is having to play defense on Iraq and on the president‘s reasons for going in—Chris.

MATTHEWS:  Thank you, David Shuster.  We‘re back with our panel.

Andrea Mitchell, I want—would you analyze right now the president‘s response?  Confronted, as he has been, by the news that the WMD reason for going to war has now eclipsed, it‘s gone, what‘s he saying now?

MITCHELL:  He‘s saying that Saddam Hussein had the intent.  He‘s seizing on the few slim pieces in this report that buttress their case, which is that he had the motivation to go after weapons after the sanctions and that he was gaming the system, raking in $2 billion by gaming the oil-for-food program, and basically, stealing money, pumping oil even while he was under economic sanctions.  So they‘re looking at, you know, the things that they can in Duelfer‘s report.

But the bottom line in Duelfer‘s report, which is devastating report -

·         and he‘s a highly credible person, for years he was a U.N. weapons inspector on the ground in Iraq—is that Saddam Hussein got rid of his weapons in 1991 and ‘92.  He got rid of the vestiges of his biological program in 1996, that his nuclear program—you know, we heard so much about the mushroom cloud from the president, Condoleezza Rice—the nuclear program was, in fact, decaying.

MATTHEWS:  Right.

MITCHELL:  And you know, all they can say now is, Well, he had the intent.  He had the scientists.  He could have gone back and started up quickly, which he could have.  But it is so far removed from the whole premise by which they went to war.

MATTHEWS:  Pat, in the beginning of the war and the months before it, the case was effectively made with the American people.  This wasn‘t a bunch of ideological politicians who decided to go to war, the American people went along with it because they feared that Saddam Hussein was enough of a menace to hurt this country, whether it was use of drone planes to deliver nuclear weapons, to deliver them whatever way they would, dropping a satchel of nuclear material, whatever, in the harbor of Tel Aviv or whatever.  There was a real fear that there was a dangerous country because of its weapons of mass destruction.

Now the case for the war, in retrospect, seems to be a notion of liberating countries which are under tyrannies, the idea that we‘re going to end the hatred of the West by regime change.  Do you think they could have sold the war with those more intangible arguments that are left now?

BUSH:  No, they couldn‘t.  Even the first Gulf war, President Bush the first sold the war on the basis of imminent possession of nuclear weapons.  That convinced an awful lot of people and went across to majority behind it.

No, I don‘t, Chris.  But the president‘s case now is basically—still is this:  Look, this is an evil man who‘s got a real grudge against the United States, who‘s had weapons of mass destruction, who has a program going.  And what we have now is that Saddam Hussein was in this oil-for-food program, bribing people to lift the sanctions so he could go back to possessing these weapons and build nuclear weapons.  And the president says, in effect, Look, we can‘t take a chance after 9/11.  This isn‘t before 9/11 anymore.

MATTHEWS:  Right.

BUSH:  We‘ve got to take this guy out.  But you were right to this extent.  To the neoconservatives and others in the administration, the whole idea was part of a larger agenda: The way to deal with terror is political reform in the Middle East and get rid of these thugs and criminal regimes before they do get nuclear weapons.

MATTHEWS:  So it is more of a preventive war...

BUSH:  It is...

MATTHEWS:  ... than a preemptive war.

BUSH:  It is a...

MATTHEWS:  It isn‘t like Israel fighting the Arabs when they‘re about...

BUSH:  Right.

MATTHEWS:  ... to attack in ‘67, which is a preemptive war.

BUSH:  Right.

MATTHEWS:  A preventive war is when you attack the other country (UNINTELLIGIBLE) the option of ever attacking (UNINTELLIGIBLE)

BUSH:  Exactly.  There‘s no imminent and grave threat, but they‘re headed in this direction, and we‘re going to take ‘em down before it happens.

MATTHEWS:  I want you to think about whether we could have sold the notion of preventive war.

Up next, Congressman David Dreier previews what the Bush campaign is thinking heading into that big second presidential debate here at the Washington University campus tomorrow night.

You‘re watching HARDBALL live from the campus in St. Louis on MSNBC.

(COMMERCIAL BREAK)

(NEWS BREAK)

(CHEERING AND APPLAUSE) 

MATTHEWS:  Welcome back to HARDBALL live, as you can hear, from Washington University right on the campus here in Saint Louis. 

Tomorrow night, on this campus, the president is going to debate John Kerry for the second time. 

And right now, we‘re joined by U.S. Congressman David Dreier, Republican of California and co-chair of the Bush-Cheney campaign out in the big state of California. 

Congressman, you know politics as well as anybody, especially for the California area.  Has anything changed in California since the debate of last week between the president and Senator Kerry? 

REP. DAVID DREIER ®, CALIFORNIA:  Well, Chris, let me tell you one thing that has changed and that is—I spoke last night to him, marking the first anniversary.  Today is the first anniversary of my being with you as Arnold Schwarzenegger was elected governor of California. 

And he has clearly changed the landscape not only in California, but across the country.  We all remember vividly that great speech that he delivered to the Republican National Convention focusing on outreach and the issue of immigrants, playing by the rules if they are here in this country and having limitless opportunity to succeed.  That is a message that is extraordinarily pervasive.

And I think is going to help us tremendously in California and it is helping across the country.  We all know that tomorrow night‘s debate is going to be extremely important.  It is interesting, while you all are celebrating—and I hear all that racket—it sounds like you are having a heck of a good time there—we are right here in the Congress and at this moment, we‘re passing an American jobs creation bill which is designed to make us more competitive to complete globally.

And what we have done, Chris, is we have had phenomenal success as we get what you said a few minutes ago will quite possibly be positive economic news.  We are winning the global war on terror.  And it is simply underscored by the fact that we have been able to keep the terrorists off of our soil. 

And so I think the things that we‘re doing are much more than simply talk, as John Kerry will have tomorrow, of plans for the future.  And it‘s a record of accomplishment and a vision to continue to build on these successes. 

MATTHEWS:  It sounds like the Republican Party, as you describe it, has now joined the Democratic Party in refusing to criticize in any way people whose first event in this country when they come here is to break the law by coming here illegally.  Is that now the position of the Republican Party?  It doesn‘t matter how you got here, as long, as you put it, you obey the rules once you get here?

DREIER:  You know, Chris, playing by the rules is the term that Arnold used in his speech that he gave to the Republican National Committee.

And what he meant by playing by the rules is that people need to go through the process of legally becoming citizens of the United States.  No, we‘re adamantly opposed to illegal immigration.  Our party stands firmly opposed to illegal immigration.  We know that illegal is illegal. 

And what we want to do—and, frankly, in the Homeland Security bill that we have been debating today—excuse me, the 9/11 Commission bill we have been debating today and we are going to further consider tomorrow, we have got an amendment that we have been working on to make sure that we have the fence up, so that people don‘t illegally cross the border.  And also we‘re going to be doing everything that we can to allow the focus to be not simply on the problem of illegal immigration, but on the problem of dealing with the protection of our borders from the threat of international terrorism. 

So, no, we‘re still opposed as a party to  illegal immigration, but we do know and underscore the fact that, like Arnold Schwarzenegger, this country was built on the backs of immigrants.  And immigrants are the ones who have really made this country what it is. 

MATTHEWS:  You don‘t have anyone in the queue in your party to replace President George W. Bush, should he get reelected.  Are you touting Arnold as the guy who should be constitutionally permitted to run for president? 

DREIER:  Well, Chris, I don‘t know how you can come to the conclusion that we don‘t have anyone in the queue.  There are a lot of first-rate Republicans around the country that are governors.

And you know on Tuesday, our friend Orrin Hatch chaired a hearing in the Senate focused on this notion of dealing with the American—with a naturalized citizen becoming president of the United States.  And it‘s—to me, if you look at the U.S. Constitution, Chris, we actually have some limitations on the American people to choose leaders they want. 

Ron Reagan is sitting there.  And I‘ll never forget, Chris, his father said—I‘ll never forget—to me in 1989, just as he was leaving—his No. 1 priority then was to repeal the 22nd Amendment to the Constitution which imposes term limits and limits, in fact, limit the choice of the American people.  Similarly, along with that, we have the limitation that exists of someone who is a naturalized citizen not being able to run for president of the United States. 

MATTHEWS:  Right. 

DREIER:  So I think those are great proposals we can look it at.

But there are a lot of other potential candidates.  And I‘m not going to start naming them right now, but there are a number of governors, a number of people who spoke very eloquently at the Republican National Convention who I think would be great candidates for president of the United States. 

MATTHEWS:  I‘m sorry, David.  I misunderstood you.  I seriously thought that you were touting Arnold for major national office the way we began the conversation. 

DREIER:  Well, no, what I said—of course I am. 

And the thing is, obviously, to run for president of the United States, there would have to be a change in the U.S. Constitution.  And I think that‘s something worth looking at.  And I think, again, that the constraints that exist in the Constitution do limit the choice of the American people.  After four elections, FDR saw people in my party, unfortunately, limit the choice of the American people when it came to the term limits on the president. 

MATTHEWS:  Right. 

DREIER:  I happen to think that those should be lifted.  Similarly, the Constitution limits the choice of someone like Governor Granholm or Governor Schwarzenegger or Madeleine Albright or Henry Kissinger. 

MATTHEWS:  Well, maybe you could have a Granholm-Schwarzenegger bill and let them both in. 

(CROSSTALK)

DREIER:  ... Albright bill. 

MATTHEWS:  I understand that the reason we don‘t allow foreign-born people to become president of the United States is because of the precedent of the Brits having German kings so often, that people who had come from Britain and became Americans were sick of having German kings who were just appointed and they moved into England and became monarchs. 

(CROSSTALK)

DREIER:  But, Chris, as you look back at that monarchy, it was nothing like the melting pot of the United States of America. 

And I don‘t believe that Arnold Schwarzenegger while he‘s always been an ambitious guy, when he was pumping iron, he was contemplating being president of the United States, maybe just governor of California. 

MATTHEWS:  Ronald.

REAGAN:  Congressman, it‘s Ron Reagan.  How are you?

DREIER:  Hey, Ron.  How you doing?  I just talked to your mother. 

REAGAN:  Oh, good.  Well, how is she? 

(LAUGHTER)

DREIER:  She‘s doing really well and she‘s looking forward to tomorrow in night. 

REAGAN:  Well, I‘m glad to hear it. 

Tell me, do you think that we can amend the Constitution to allow foreign-born people to run for president if it‘s perceived, if that change is perceived to be for Arnold Schwarzenegger‘s benefit specifically?

DREIER:  Chris just brought it up.  I have been hesitant to talk about it simply based on that fact. 

I think that there are a lot of people who would aspire to that.  And

I just—I believe that any amendment to the Constitution that expands the

rights of the American people and creates a wider range of choices is

something worth looking at.  But that is why I just mentioned Madeleine

Albright and Henry Kissinger, along with Governor Granholm and Arnold.  But

(CROSSTALK)

REAGAN:  But Arnold is clearly the key here.  People are thinking about Arnold Schwarzenegger. 

(CROSSTALK)

DREIER:  Excuse me? 

REAGAN:  If it‘s about Arnold Schwarzenegger, is the Constitution going to be amended or will people say, no way, Republicans, we‘re not going to let you do that?

DREIER:  The point is a fair one.  And I don‘t think it should simply be about Arnold Schwarzenegger, but it is clear that the appeal of Arnold has played a role in saying to some people, why can‘t this guy potentially become president of the United States?  And so—and I think that you‘re correct in that some Democrats may be very virulently opposed to this idea, Ron, simply based on the fact that they would not want a Republican like Arnold Schwarzenegger to become president. 

(CROSSTALK)

MATTHEWS:  If you had to vote right now on a Constitution—on submitting this to the states, Congressman, would you submit this amendment to the Constitution to the states?  Would you do it? 

DREIER:  Would I do it?  Absolutely. 

And, frankly, I‘ll tell you what I‘m working on right now, Chris.  And that is looking at the priority that Ron‘s father had of dealing with the 22nd Amendment to the Constitution, while at the same time looking at this question of naturalized citizens. 

MATTHEWS:  OK, thank you very much, Congressman David Dreier.

When we come back, we will be talking to the crowd here at Wash U. 

Plus, Kerry economic Roger Altman, he‘s going to be here. 

HARDBALL‘s live coverage of the eve of the second presidential debate will return after this on MSNBC. 

(CHEERING AND APPLAUSE) 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  The only thing consistent about my opponent‘s position is that he‘s been inconsistent. 

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE:  He misled the American people when he said we‘d go to war as a last resort.  We did not go as a last resort. 

(END VIDEO CLIP)

(CHEERING AND APPLAUSE)  

MATTHEWS:  We were talking about the fact that the last big unemployment news comes out tomorrow before the election.  This is, of course, always a tricky figure, the last monthly report before the election.

We have joining us right now John Kerry‘s—one of his top economic advisers, Roger Altman.

Roger, what happens if the unemployment rate comes out tomorrow and it‘s about the same, 5.4 percent unemployment? 

ROGER ALTMAN, KERRY CAMPAIGN ECONOMIC ADVISER:  Well, it is too late to change the Bush economic record.  We know what that is.  We know it‘s not a good one.  On jobs, we know he is going to the first president since Herbert Hoover to see jobs fall over a four-year term. 

MATTHEWS:  The number of people working. 

ALTMAN:  And they like to talk about how they inherited so many problems. 

So I think the best way to look at it is over the last three months, where none of the factors they talk about, the corporate scandals, the tech bubble, and, for that matter, 9/11 apply.  Well, over the last three months, Chris, the percentage of Americans working in this country has gone down, not up, and incomes have gone down, not up.  Why?  Because job growth has been anemic and population growth has been faster. 

And on incomes, inflation is subdued, but it‘s higher than the anemic wage growth we‘re seeing.  So, over the last three months, the acid tests of economic success or failure, jobs and income, are both down. 

MATTHEWS:  Let me ask you a practical—I‘ll give you a practical problem we have.  When I was trying to get my AOL fixed yesterday, I had to go to Bangalore or somewhere in India and talk to somebody.  And she was a very nice young woman.  And she spoke in very good, learned American English, and she was very nice and very respected and a great, professional worker.  Why isn‘t that worker in Joplin?  Why isn‘t that worker here in Missouri somewhere? 

Why do we have to go around the world to get our computers fixed? 

ALTMAN:  Well, one thing we have to do as a nation is get back or competitive edge internationally.  And Senator Kerry talks a lot about that, because the essence of his economic plan, long-term plan, is to reduce the costs of doing business for American employers, get health care costs down.  They‘re skyrocketing.  Get energy costs down.  We all know what‘s happened on energy costs. 

And to cut corporate taxes.  And he has put forth very substantial programs on those regards, as you know.  On taxes, for example, eliminate the incentives for outsourcing in the tax code, the deferral plan, which would eliminate deferral.  Use all the proceeds to cut corporate taxes at home, the proposed new jobs tax credit, which would relieve employers for two year after new jobs are created. 

MATTHEWS:  How do you have corporations from cutting costs by sending jobs over to parts of the world, in Southern Asia, for example, South Asia, where it‘s just really cheap to get people to work for a buck or day or something? 

ALTMAN:  Well, two ways.

MATTHEWS:  How do you stop them from doing that? 

ALTMAN:  Well, two ways.  You reduce the incentives we have in our tax system, which effectively reward them for doing it.

MATTHEWS:  You really think that would work? 

ALTMAN:  I think it would work, yes. 

And, secondly, you cut the cost of doing business for them here, so it becomes cheaper for them to keep jobs here and to create new jobs here.  We are not as uncompetitive internationally as we people think we are.  All the press focuses on the wage differentials, the U.S. vs. India.  And those are very big.  But when you add in the additional costs, all the indirect costs, the overall differential is not as big as we think it is.  And we can be more competitive than people think that we are if we focus on it and make it a priority, the way Kerry has talked about. 

MATTHEWS:  Why are the labor unions in this country so weak?  They used to be powerful.  They used to fight for wages.  Now they seem to cut one deal after another.  You don‘t hear of labor really striking anybody with any kind of power.  The airlines break them.  The media breaks them. 

Where—how are the Democrat going to, if they want to, increase the power of organized labor and collective bargaining?  How do you do it or do you want to do it? 

ALTMAN:  Well, I am not sure of the answer as to how you do that, but I know what we need in this country is to get the job creation rate back up. 

MATTHEWS:  What about labor unions?  Why are they so weak and are you guys going to make them any stronger? 

ALTMAN:  Well, that is a hard question, because I don‘t know whether

it‘s possible for the union movement to move—to begin to make progress

again in terms of the percentage

(CROSSTALK)

MATTHEWS:  I‘m just asking because you guys have all the labor support.  I just wonder what you are going to do for labor.  Are you going to give them a little more muscle than they have or are they going to be as weak four years from now if you get back in? 

ALTMAN:  I don‘t know the answer to that, Chris.

But what I do know is that during the Clinton years, we created 23.5 million new jobs.  The worst year President Clinton had was 2.5 million new jobs.  The worst month he had was 250,000 jobs.  Do you know that the worst -- they have had only two months that are better than the worst month that Clinton had. 

So what we really need to do for American labor is get back on the track which we saw in the ‘90s, which was very recently, as you know, which created 23.5 million jobs.  That is we need to do for working Americans. 

MATTHEWS:  Well, will John Kerry bring back the industrial base of America so that towns like Michigan City in Indiana and in Western Pennsylvania, like Spencerville, all the towns that have nothing left really but one of those movie places where you rent the movies?

I mean, is that all we have in our towns left is maybe a diner and some movie rental place?  When are you going to fill those factories with working jobs again? 

ALTMAN:  Well, the death of American manufacturing has been predicted every 15 or 20 years for decades. 

MATTHEWS:  Right. 

ALTMAN:  And, of course, it is being predicted again now. 

MATTHEWS:  Well, you can see it.  It‘s manifest.  I‘ve gone through those towns. 

ALTMAN:  I understand that.  But it‘s been very often predicted over the years. 

MATTHEWS:  Yes. 

ALTMAN:  I don‘t think that American manufacturing is history.  I think it can be revived.  I think an overall program, as I say...

MATTHEWS:  How do you scrape off the rust and bring those towns back in America that are now ghost towns or should you move to some other area to find the jobs?  People want to stay in places like Pennsylvania.  They don‘t want to move out.  How do you give them something to work on and have something for the kids to do so they will stay home in places like Scranton and Wilkesboro?  How do you do that?

ALTMAN:  Well, two-part answer.

First of all, 15 years ago, people were also proclaiming the death of manufacturing.

MATTHEWS:  Right. 

ALTMAN:  In the latter Reagan years.  And what he saw subsequent to that during the 1990s was the greatest job boom in American history.  It really was.

MATTHEWS:  Right. 

ALTMAN:  The greatest job boom in American history, the greatest income boom in American history, the lowest unemployment in yours and my lifetime.  So the idea that we can‘t go back and do that again on jobs and on income is just not correct.  We can do that. 

Second of all, there are parts of this country which actually are very competitive relative to India and China.  And we have to broadband into those places and make them more competitive. 

(CROSSTALK)

MATTHEWS:  It is part of my job, a hard break.  I‘m trying to keep my job. 

Thank you, Roger Altman, with the Kerry campaign.

ALTMAN:  Pleasure.

MATTHEWS:  We‘ll be right back.

(CHEERING AND APPLAUSE) 

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE) 

MATTHEWS:  We‘re here at Washington University.  I‘m here with all the students in Saint Louis.  This is the same campus we‘re going to have the debate tomorrow night, the sort of town hall-style debate between the president and of course John Kerry.  And after the first debate, everybody is looking for the results of second debate, which may create what Ron Reagan earlier tonight called a tipping point in this election, where all the votes start go to one of the two candidates. 

Let‘s get some questions for my distinguished panel back there. 

MATTHEWS:  You have a question.

UNIDENTIFIED MALE:  I have a question for Mr. Reagan. 

I‘m curious.  You spoke at the Democratic Convention about the importance of stem-cell research.  I‘m wondering if there any other reasons why you think that the Democrats might be the right choice in selection?

REAGAN:  Well, they are less likely to start a war unnecessarily in the Middle East, I think.  That would be one reason.

(APPLAUSE)

REAGAN:  They are also marginally more honest with the American people, as far as I can see. 

MATTHEWS:  Next question.

REAGAN:  So that‘s just my opinion.  I get to have opinions.

(CROSSTALK)

UNIDENTIFIED MALE:  Question for Andrea.

What does the president have to do in tomorrow night‘s debate to stop the bleeding and regain the momentum? 

MITCHELL:  I think he has to have an answer to the war in Iraq.  He has to be forceful, as personable as we know he can be, because he‘s good at that.

But I think he has to be a little bit more forceful and better with the facts.  He has got to prove that he understands all these issues, as they tell us he does.  But he wasn‘t articulate enough in the first debate. 

MATTHEWS:  Let‘s go to the next—I see a Kerry-Edwards supporter here.  What‘s your question for who?

(CROSSTALK)  

UNIDENTIFIED FEMALE:  My question is for Mr. Reagan.         

And that is, why has the Bush-Cheney team gotten away with telling us so many lies regarding their presidency? 

MATTHEWS:  That‘s a question all right. 

(LAUGHTER)

REAGAN:  Boy.

MATTHEWS:  It sounds like an indictment.

Are you going to be a prosecutor or what?

Go ahead.  Let‘s go answer it, Ron.

(CROSSTALK)

REAGAN:  Well, they don‘t always get away with them.  Some of us pay attention and we call them on the misstatements of fact, let‘s call them. 

So if they are getting away with any lies or misstatements, whatever you want to call it, I think that‘s largely our fault, the big we in the media.  Maybe we‘re not doing our job well enough. 

MATTHEWS:  Don‘t take us all done with you, Ron.

(LAUGHTER)

(CROSSTALK)

REAGAN:  Except for Chris, of course.

UNIDENTIFIED FEMALE:  Yes, I have a question for any of the conservatives on the panel.

MATTHEWS:  Let‘s go with Pat Buchanan.

UNIDENTIFIED FEMALE:  Pat Buchanan, what is a conservative student like me supposed to do on a college campus surrounded by Kerry-Edwards fans?

(CHEERING AND APPLAUSE) 

(CROSSTALK)

BUCHANAN:  Well, I think you just show guts.  Listen, I used to be in teach-ins out here at Washington University 40 years ago.  The campus was as liberal then as it is now.  And I think you have got a golden opportunity to learn and study and, frankly, be challenged by your opposition.  And you will come out of it better if you have got to answer tough questions and you are not part of the general herd.  Congratulations for standing up for Cheney-Bush, or Bush-Cheney.

(CHEERING AND APPLAUSE) 

(CROSSTALK)

(LAUGHTER)

REAGAN:  Freudian slip.

MATTHEWS:  Do you have a question?

UNIDENTIFIED FEMALE:  I have a question for any of the liberals on the panel.

MATTHEWS:  Ron Reagan, I‘ll put up for that.  I‘ll put him up. 

Go ahead, Ron.

REAGAN:  OK.

UNIDENTIFIED FEMALE:  I want to know, if John Kerry can‘t keep his

wife‘s company in the country, why am I supposed to believe he can keep

anybody else‘s company

(CROSSTALK)

MATTHEWS:  What company has left the country for her?

REAGAN:  Yes. 

UNIDENTIFIED FEMALE:  Heinz has almost 100 companies in countries all over the world.  I can‘t remember any of the specific names.

MATTHEWS:  Did they start there or start here and move there? 

Well, it‘s not their fault if they started there.

Anyway, you take it, Ron.  That‘s a tough question if it‘s well premised—Ron.

REAGAN:  I am informed by my more knowledgeable colleague here that she does not actually own or control the company, so it‘s not her call whether they go overseas. 

MATTHEWS:  OK.

We‘re going to have another hour to go here at Washington University, more questions from the students, more activity from the activists on campus.

We‘re going to come back and talk to the Congressman Harold Ford of Tennessee.  The polls in his state, by the way, are tightening up, and Kerry could actually win there.

(CHEERING AND APPLAUSE) 

MATTHEWS:  A state where Al Gore couldn‘t.

You‘re watching HARDBALL live from Saint Louis on MSNBC. 

(CHEERING AND APPLAUSE) 

(COMMERCIAL BREAK)

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END   

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