updated 2/15/2005 2:22:47 PM ET 2005-02-15T19:22:47

Guest: Debra Saunders, Margaret Carlson, Ed Rendell, Mark Sanford, Cofer Black, Al Sharpton

CHRIS MATTHEWS, HOST:  Tonight, former presidential candidates Pat Buchanan and Al Sharpton go to battle over Social Security. 

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.

With President Bush out on the road promoting his Social Security plan, he‘s managed to reshape the ideological lines in big issues—on big issues, from the United States role overseas, to an expansive role for government on abortion, gay marriage, education, tort reform, deficits, immigration, Medicare. 

So, what does it mean to be a liberal or a conservative these days? 

Pat Buchanan is an MSNBC political analyst.  And the Reverend Al Sharpton is founder and president of the National Action Network and is a former Democratic candidate for president. 

MATTHEWS:  Gentlemen, I want you to look at the latest Gallup poll here on President Bush‘s job approval rating.  It dipped in the past week from 57 down below 50 to 49. 

And according to the latest Opinion Dynamics poll, Americans both under and over the age of 55, in fact, every age group, believe they would be worse off under President Bush‘s Social Security plan. 

So, Pat Buchanan, is this a winner or a loser for the president? 

PAT BUCHANAN, NBC POLITICAL ANALYST:  In my judgment, in the long run, it is a winner, Chris, because I think it is a courageous thing the president is doing.  He is trying to make this program solvent for the baby boomer generation and Gen X and Gen Y. 

Short term politically, he has got a tremendous uphill climb.  I think there‘s a real possibility he might not get.  But I do think at the end of the day, the American people will say, look, there was a grave problem there.  The president exercised great leadership.  And I think the people who come back with nothing to the president, if that‘s what happens, I think will be the ultimate losers. 

MATTHEWS:  Reverend Sharpton, is this a winner for the president or a loser, this move to make Social Security involve personal accounts and the other changes? 

AL SHARPTON (D), FORMER PRESIDENTIAL CANDIDATE:  I think it is a loser, not only for the president.  I think it is a loser for the American people, because what we‘re really doing is removing people‘s guaranteed safety net and saying that we want to really privatize this and, in many ways, gamble it away.  And I think that the American public has seen it for what it is. 

We‘re first of all dealing with an incomplete plan.  And we‘re dealing with broad-stroke themes that would really make, in my judgment, the future of many Americans at risk.  And I think the American people see it now.  I think they will see it later.  And I think that‘s why he‘s drifting in the polls. 

MATTHEWS:  Let me ask you about this latest poll I point to, the Opinion Dynamics poll.  Why do you think every age category, including people who would just be starting off in work, think they‘re going to be losers under this plan, the Bush plan? 

BUCHANAN:  Well, I think as soon as you start talking about Social Security, Chris, people who are over 65 and are getting it are saying why is he fooling around with this plan in any way?  They‘re not looking at details. 

I think Al Sharpton is correct.  Reverend Sharpton is correct.  A lot of young people and others are saying, look, this personal plan, they‘re not sure whether they‘re going to get as much money as they were going to get.  There‘s a real air of uncertainty.  This is a very complex issue.  And most people say, look, if it ain‘t broke, don‘t fix it.  And they don‘t think it is broke. 

MATTHEWS:  Does this fix it, though?  How would personal accounts fix the long-term shortfall on Social Security, the fact that we have so many more people retired than working than we—in terms of the ratio?

BUCHANAN:  Well, I think down the road.  But in the short term, it is going to cost an awful lot of money. 

MATTHEWS:  But who says—who says in the long term it is going to fix the problem? 

BUCHANAN:  President Bush. 

(CROSSTALK)

SHARPTON:  And that‘s the problem.  We don‘t know how it is going to fix it.  The only thing we‘re certain about is that it will cost a lot of money now and there‘s an uncertainty down the road.  And I think people of all age groups have a right to be very insecure about that.  I don‘t think the president has been specific at all, other than the fact this is going to cost a lot of money and we don‘t know if the light at the end of the tunnel is the train coming or sunlight. 

BUCHANAN:  But, Chris...

(CROSSTALK)

MATTHEWS:  Suppose the president loses, Mr. Sharpton—Reverend Sharpton.  He gets beaten and he stops talking about Social Security reform by August.  He‘s just given up, because the numbers aren‘t there.  The house leadership won‘t back him.  Can‘t he go into the next election and say: “I wanted to create an opportunity society of people of all ages.  I was going to create a chance for a real Social Security improvement, a better life, more options, more money for people in the long run, real assets when they retire.  And the Democrats stopped me in my tracks without an alternative”?

Does that help the Democrats in the next election? 

SHARPTON:  No. 

The problem with that argument, the scenario you lay out, let‘s say if he goes to August, is that the Republicans are in charge of the Senate and the Congress.  How does he tell the American public that we stopped something that is that his own party, as some of them are questioning, and they had enough control of the House and the Senate to push through if they really, really wanted to do it?  How does he say that in August when the public is rebelling and saying that they don‘t agree with his plan? 

And how does he say it when no one knows the specifics of the plan? 

BUCHANAN:  Chris, I think you‘ve got the exact right point.  The president wins by losing.  It has often happened. 

He will say, look, we all know we have got a serious problem.  The baby boomers cannot be funded.  This thing is headed to the point where the surplus starts shrinking in a few years.  By 2018, it disappears.  I have tried.  I have done my best.  We did not succeed. 

And no one will have been hurt in their Social Security.  People will say, whatever you say about the president of the United States, he tried to lead on this.  I think he will be well thought of on that.  And I do believe that we all know there‘s a problem, Chris.  We all know the numbers show there‘s a problem.  And I think the president will be highly regarded for having tried. 

MATTHEWS:  Last question on this before we get to the philosophical question about whether George Bush is really a conservative.  And I want to raise that question really seriously right now.  But do the Democrats need to offer an alternative? 

If you were leading the Democratic Party in the House or the Senate, Reverend Sharpton, would you come forward and meet them halfway with an alternative or would you say—would you do to them what Bill Kristol urged back in the 1990s against Hillary Clinton, give them nothing so they can‘t compromise?

SHARPTON:  Well, I think the difference is that, in the ‘90s, Hillary Clinton laid out a plan.  We still don‘t know what we are fighting here.  We‘re dealing with a broad stroke of ideas.  If the Democrats came with a counterplan, it would be the only detailed plan on the table. 

I think that we ought to expose the fact the president has not come with a specific plan.  We—all we know is that it will cost a lot.  It will gamble in the long run and that the details that are lacking is on the president‘s side, not the Democrats‘ side. 

BUCHANAN:  But the plan is going to be coming.  The president is going to have to have a specific plan.  The Republicans are going to have to have a specific plan.  And when they do, the Democrats can‘t get up and say, just say no.  We‘re going to do nothing. 

(CROSSTALK)

MATTHEWS:  But isn‘t that what the Republicans did to Hillary?  And they got away with it.  They killed it.

(CROSSTALK)

BUCHANAN:  Well, the reason they did is, no one saw the major problem of national health care.  All I heard was they‘re going to take away my health insurance and put me in some other plan. 

MATTHEWS:  Yes. 

SHARPTON:  But I think the Democrats...

(CROSSTALK)

BUCHANAN:  Hold it. 

Every American, Al, I do believe knows there‘s a serious problem, especially young people.  They‘re all thinking, we ain‘t going to get anything.  They know there‘s a problem.  And I think they‘re say, we may not have agreed with the president, but darn it. he tried to fix this thing for us.  And I think he is going to get good marks on it. 

SHARPTON:  I think we will come with a plan.  And I think we‘ve already started laying it.  It was written by Franklin D. Roosevelt.  We‘re going to just update it. 

MATTHEWS:  OK, let me ask you, gentlemen, about something I have no idea which way you‘re going to go on.  It‘s the definition of what a conservative is and what a liberal is. 

When we were all growing up, a conservative was a guy who did not spend much money at the federal level.  He was a guy who didn‘t believe or a woman who didn‘t believe in much government at the federal level to begin with and maybe even less at the local level.  He was a guy that didn‘t want to spend much money on poor people or anything else.  He was a guy that didn‘t want to go fight overseas wars if we could get out of them. 

Now a conservative is a guy who want to have wars overseas in the Middle East.  We‘re heavily involved over there now.  He‘s for all kinds of things like prescription drugs, for liberalization of immigration, for more spending—involvement in abortion, involvement in the federal level, involved in marriage definitions. 

Pat, let me—and it seems like Bush may not be a conservative as we grew up thinking a conservative is. 

BUCHANAN:  George Bush is a Great Society conservative.  It‘s a brand new beast.

MATTHEWS:  Explain that to the viewers. 

(LAUGHTER)

MATTHEWS:  That‘s a hell of a definition.

BUCHANAN:  Well, he is not in the Goldwater, Reagan tradition of conservative, or Taft. 

(CROSSTALK)

MATTHEWS:  Is he a conservative in the case of—is he a conservative? 

BUCHANAN:  In my judgment, in many cases, there—he does have conservative ideas.  Social Security reform is one of them. 

But I do not believe George Bush is a traditional conservative.  He uses Reaganite rhetoric to cover up Rockefeller policies.  Look, when you have No Child Left Behind, a huge expansion of the federal budget there in the federal bureaucracy there, you have got prescription drugs under Medicare that is the first entitlement since LBJ, you have faith-based pork out there, which is the same thing LBJ did in the cities. 

(CROSSTALK)

MATTHEWS:  How about never vetoing a single spending bill? 

BUCHANAN:  Exactly.  You‘ve got deficits, $400 billion.  You‘ve got Wilsonian interventionism abroad.

(CROSSTALK)

MATTHEWS:  Reverend Sharpton, I want to ask you a couple questions. 

And I know your positions on these.  You‘re public on them.

Is overseas adventurism, overseas involvement in many countries like we have right now, in the Middle East especially, is that conservative foreign policy or is it something else? 

SHARPTON:  I think it is something else. 

I think that when you look at the fact that this president has engaged in a lot of overseas involvement, to a tremendous cost to Americans, that‘s not what we traditionally thought as of being conservative.  In fact, he has spent money when we have been faced with record deficits here both on the federal and the state level. 

I think that, in many ways, he has been an extreme right-winger.  But I don‘t think in terms of what we traditionally regarded as conservative and as regarded as being very cautious and prudent, he has not shown that in how they‘ve spent money overseas and domestically. 

It is funny how they talk about Democrats are tax and spend when they have spent much more money than anyone would imagine and they‘re—and talking about spending even more, while they accuse the other side of that. 

BUCHANAN:  You know, Democrats are the party of tax and spend.  And Republicans have become the party of guns and butter and tax cuts, too. 

SHARPTON:  And spin while you cut. 

(CROSSTALK)

MATTHEWS:  Also liberalized immigration policies. 

BUCHANAN:  Exactly. 

(CROSSTALK)

MATTHEWS:  How can you call that conservative, the immigration policy of this administration? 

BUCHANAN:  It is not conservative.  The conservative—look, when Eisenhower came in, he had Operation Wetback and he sent a million illegal...

MATTHEWS:  That‘s a nice word.

BUCHANAN:  Nice word.

He sent one million illegal aliens who were in the country, said, you have got to go home.  George Bush will not even defend the borders of the United States. 

MATTHEWS:  Why not? 

BUCHANAN:  Because he believes in open borders.  That‘s “Wall Street Journal” conservatism.

MATTHEWS:  But does he believe in getting more votes?

BUCHANAN:  Well, I mean, that‘s one of the reasons, is that.  But big business wants it.  George Bush I think personally has got that point of view.  I think he believes it deeply. 

MATTHEWS:  OK.

BUCHANAN:  But it is not conservatism, not traditionally. 

MATTHEWS:  I want to come back and talk about federal involvement in issues like abortion, gay marriage, definitions of marriage, and whether you can truly call that a conservative approach, because it‘s Washington making the rules. 

Anyway, more with Pat Buchanan and Al Sharpton when we return. 

And still ahead, with Iran and North Korea showing off their nuclear capabilities or hopes, is the United States any safer since 9/11?  Cofer Black, the man who was in charge of counterterrorism efforts for the State Department and the CIA before and after the attack, joins me.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, Pat Buchanan and the Reverend Al Sharpton fight over how to save Social Security—when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Pat Buchanan and the Reverend Al Sharpton.

Reverend Sharpton, I want you to start here.

Again, it is the question of federal power.  Conservatives used to say, we don‘t want a lot of federal power.  We want it at the local level.  Yet, when it comes to the issue of defining marriage, when it comes to the issue of—well, let‘s start with that one. 

Is this a conservative move, to say we‘re going to outlaw same-sex marriage at the federal level, or this is a liberal position?  What is it?

SHARPTON:  I think it is a tortured contradiction.  At one level, they don‘t want federal involvement in people‘s personal choices.  But, at another level, they want to impose their will and lifestyles and like definitions on people. 

So, I think it is an extreme right-wing ideology with a less-than-conservative form of how they want to govern it, which shows to me how diabolically wrong it is.  They want to contradict their own sense of governing to violate people‘s right to choose. 

MATTHEWS:  Did you hear that?  Same-sex marriage is diabolical. 

(CROSSTALK)

(LAUGHTER)

MATTHEWS:  No, but isn‘t it a conservative—a definitional issue, Patrick? 

BUCHANAN:  That‘s right. 

MATTHEWS:  And you‘re one of the great ideologues of our time. 

BUCHANAN:  Right. 

MATTHEWS:  Is the federal government‘s insistence from the president on setting the rules on what is a marriage, is this conservative or liberal? 

BUCHANAN:  Here‘s why it is conservative.  This is a states‘ rights issue.  States should decide these things themselves.

MATTHEWS:  Right. 

BUCHANAN:  The problem is, you have federal and local judges who are now handing down decisions that should be dealt with by legislatures.  Who deals with the Supreme Court if the Supreme Court is a renegade court, in other words, it decides suddenly homosexuality was what Madison wanted to protect?

Only the Congress of the United States can do that.  Now, I prefer that the Congress restrict the jurisdiction of the court under the Constitution, rather than a constitutional amendment, which we‘re not going to get... 

(CROSSTALK)

MATTHEWS:  Has that ever been done?

(CROSSTALK)

BUCHANAN:  Yes, it has.  It‘s been done a number of time. 

MATTHEWS:  Go ahead, Reverend.

SHARPTON:  States‘ rights has always been against the rights of most citizens.  A runaway court ran away in the year 2000, Pat.

And I again say that it is an extremely suspicious thing for people that believe in states‘ rights to now all of a sudden wants the federal government to make sure that people don‘t have the right to choose their own lifestyle.  The role of the president, first of all, is not to decide marriage for anyone.  The role of the president is to take care of health care and education and other things. 

I think it is a diversion.  And I think it‘s a way to begin to have the government come back in and rob people of their civil rights. 

MATTHEWS:  OK.

The Reverend Al Sharpton, sir, thank you for joining us again tonight.

Thank you, Patrick Buchanan. 

Still ahead, with bin Laden still at large and North Korea declaring they have nuclear weapons, is the U.S. any safer than it was a few years ago?  Former State Department counterterrorism coordinator Cofer Black will be here to talk about that very question in just a moment. 

You‘re watching HARDBALL on MSNBC. 

(NEWS BREAK)

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

Cofer Black was one of the stalwarts in the war against terrorism.  He served 28 years in the CIA and was the director of the agency‘s Counterterrorism Center when the 9/11 attacks happened.  A year after the attacks, he became the State Department‘s coordinator for counterterrorism.  He‘s now the vice chairman of the Blackwater USA group, which trains law enforcement and security personnel. 

Mr. Black, thank you for joining us. 

COFER BLACK, FORMER STATE DEPARTMENT COUNTERTERRORISM COORDINATOR:   

Pleasure.  Thanks, Chris.  

MATTHEWS:  Let me ask you about—when we talk about the war in Iraq, the war in Afghanistan, the other threats in Iran, and—are we winning or losing the war against terrorism globally? 

BLACK:  We‘re definitely winning.  I think one has to take the long view. 

My position—OK, I‘ve been doing this for years.  And if you look before 9/11, after, there‘s been a fundamental change.  We are winning because the most capable terrorists, those with the most amount of knowledge, are being successfully identified and countered to protect innocent men, women and children.  And the reason for that is the community of nations, the people that do the work, the practitioners of counterterrorism, the cops, the intelligence people, are cooperating every day more efficiently and more effectively. 

And that‘s separate from politics, geopolitical interaction, what we see on a lot of our TV screens.  The guys, men and women doing the work on the ground, are getting better and better, catching more and more of these guys, which means that the expertise level devolves, which mean you‘re dealing with operatives that are less capable, which means, as our communication interaction goes up, we‘re catching more of these guys. 

So, from a tactical, practical counterterrorism level, looking at the world, we‘re doing a better job. 

MATTHEWS:  We‘re decapitating it.  But what about the recruitment of people to the terrorist organizations lately the last couple—since we went to Iraq, for example? 

BLACK:  This is probably comparatively the harder area for us. 

Watch your television.  Watch the media in the region.  There is sufficient incitement that plays upon a fundamental humiliation among the youth in certainly the Arab world, humiliation of—that is seen for themselves, for their parents, perhaps.  And this drives youth towards people that will lead them astray. 

It still is a comparatively small population.  You watch TV, you think there must be armies of these guys.  Not true.  Very small number.  But it enough to cause certainly tremendous heartbreak, tremendous casualty.  And it is the job of all of us that do counterterrorism to identify those people and to render them to justice. 

MATTHEWS:  But—could I say that we‘re winning the short-term war in the fact that we‘re decapitating the most experienced people at the top, but, in the long run, if people keep joining these terrorist organizations in significant numbers that eventually they will rebuild their structure?

BLACK:  Let‘s look at the continuum, Chris.  Let‘s look at in the ‘90s.  We are weren‘t winning.  We were barely keeping up.  They got a head start.  They got way ahead of us. 

Small groups of people like my colleagues in the CIA killing themselves to keep up with these guys.  Finally, this country caught up.  So, we‘re playing catchup.  So, it is a great step tactically to be doing as well as we are.  The next step is very much a political one where we have to come to terms with some of these engines and these drivers that motivate or allow young people to join these groups. 

MATTHEWS:  Let‘s talk about those engines.  When I—if I were sitting—if you were sitting here trying to recruit me and I was a 25-year-old Arab guy from Cairo, I just got out, I have got some technical ability, right?

BLACK:  Yes. 

MATTHEWS:  What would you say to me to join al Qaeda?  What would be the pitch? 

BLACK:  Look at television.  Look at TV. 

On the one hand, you‘ll see a screen of an American-manufactured Apache helicopter shooting a Hellfire missile into a target in Afghanistan.  And then, the other, you will see the same thing, the same platform, the same weapon being used by the Israelis in Palestine.  These images and these lines are manipulated very well.  The acculturation period takes a long period of time.  There‘s a vetting process where you bring essentially...

(CROSSTALK)

MATTHEWS:  So it is foreign policy that ignites this hatred of the United States. 

(CROSSTALK)  

MATTHEWS:  People—but the president always says—speaks in grander terms.  He says, they don‘t like our freedoms.  What does that mean?  Is that true?  Is that why they care?  Do they care whether we‘re free in this country or simply that we‘re pro-Israeli or that we have too much of a culture influence in the Mideast? 

BLACK:  They are constrained in their thinking.  They go very quickly from a religious orientation that is radicalized, that is moved by their handlers, very quickly into a system they can‘t get out of.  It‘s almost like a drug cartel.  They get in.  They can‘t take out. 

Suicide videos are taken of them beforehand.  They make him martyr posters.  And all of this makes it so it is pretty easy to get in, if you have feelings of inadequacy, humiliation.

MATTHEWS:  Right. 

BLACK:  And it is very difficult to get out.  And a lot of the people that we chase are just—are just simple criminals doing it for money, this sort of blend. 

(CROSSTALK)

MATTHEWS:  I see.

Look down the road 10 years.  Where are we going to be in the war on terrorism if we keep up the effort we have now?  Can you win? 

(CROSSTALK)

MATTHEWS:  That‘s a question.  In Iraq, any country—we were talking about this before the show.  If you have an insurgency of people who are willing to risk their lives to fight a government, don‘t we have to kill the insurgency in Iraq before we leave?

BLACK:  Yes. 

MATTHEWS:  Just like we had to do it with the V.C. in Vietnam and didn‘t do it?  We left the South Vietnamese government to fight the V.C.  We did not get rid of them. 

BLACK:  Yes. 

MATTHEWS:  Do we have to get rid of the insurgency in Iraq? 

BLACK:  Let me answer it this way. 

It‘s like an insurance policy.  You cannot say to me as a practitioner of counterterrorism, essentially, I want an insurance policy that eliminates 100 percent of the risk.  The way the global war on terrorism is going, led by the United States, and doing a fine job of it, puts you in a position where you whittle down these attacks, so that they are somewhat comparatively manageable, so that the casualties are as low as humanly possible, as much as we can do.

But, Chris, in this country, we need a deductible, like an insurance policy, $500 or less.  We as a people have to understand, there is no 100 percent defense.  There is no perfection.  We will have to be with this for the long period of time.  The objective of this effort is to minimize, to keep catastrophic strikes to a minimum, absolutely weapons of mass destruction.  That‘s what keeps people away wake at night.  And keep it down to a manageable level, where we can sustain it. 

MATTHEWS:  Let me ask you, what‘s the biggest threat, countries or peoples? 

BLACK:  Peoples also run countries. 

I think we‘re coming away a bit from the environment that, as a counterterrorist specialist, that I had to face in the ‘90s.  Carlos “The Jackal” would have been caught 10 years earlier if he had not been supported by the remaining intelligence service in the KGB and everybody else.  So, as American diplomacy—our secretary of state, Condoleezza Rice, says the time for diplomacy is now.  Strip away that type of support.  Delegitimize it.  Confront when we see it.  Engage individuals with the cooperation of law enforcement and intelligence.  I think we can do a good job. 

MATTHEWS:  Thank you very much, Cofer Black.  Thanks for joining us.

BLACK:  Thanks.

MATTHEWS:  How will the Democrats and Republicans respond to Howard Dean as the new chairman of the DNC?  And we take the fight over Social Security stateside with Governors Ed Rendell of Pennsylvania, Democrat, and Mark Sanford of South Carolina, Republican.  They‘re going to talk about Social Security.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

There‘s a new sheriff in town.  Howard Dean is now head of the Democratic National Committee and he is raring to remake the party.  Will Republicans use the Dean victory to further knock the Democrats? 

Pennsylvania Governor Ed Rendell chaired the Democratic National Committee during the 2000 election.  Mark Sanford was a six-term Republican congressman from South Carolina before he was elected South Carolina governor. 

Governor Sanford, are you one of those who join with Rush Limbaugh in celebrating the victory of Howard Dean as a metaphor for what‘s wrong with the Democrats? 

GOV. MARK SANFORD ®, SOUTH CAROLINA:  I‘m ashamed to say I‘ve not kept up with what Rush has been saying about Howard Dean here lately. 

I will simply say this.  I would welcome that kind of enthusiasm to the political debate.  I think good debate ultimately makes for better ideas.  And the fact that he‘s a little spirited in his debate, some people see that as an advantage on the Republican side.  Some see it as a disadvantage.  The bottom line is, more involvement is a good thing. 

MATTHEWS:  Do you think he‘ll be a good chairman for the other party? 

SANFORD:  That I don‘t know.  Time will tell.  He‘s certainly enthusiastic.  I‘ll give him that credit.  And, again, level of involvement ultimately is something we want to see more of in the political process, whether in South Carolina or elsewhere in the country. 

So I don‘t know is the answer . I don‘t think he‘s quite as measured as some of those folks you‘ve seen in the past.  But, again, I would simply say enthusiasm is something we want to say more of, whether on the Republican or the Democratic side. 

MATTHEWS:  Governor Rendell, that‘s too much nuance for me on this show, for HARDBALL.

(LAUGHTER)

MATTHEWS:  But that was rather magnanimous and even nuanced.  I don‘t know what to do either of those varieties of thinking.

(LAUGHTER)

MATTHEWS:  But your thoughts are rarely nuanced.  Do you think Dean is the guy?  You didn‘t like him during the race.  You had better—you were hoping for somebody better.  Do you think Dean can do what Governor Sanford says for the other side?  He could liven up the party? 

GOV. ED RENDELL (D), PENNSYLVANIA:  Well, first of all, Howard wasn‘t my first choice, because I think we need to talk to the—that big gap in the middle who really haven‘t decided which way they want to go politically, but are trending Republican; 47 out of the 50 largest counties in America, as you know, Chris, are trending Republican. 

MATTHEWS:  Right. 

RENDELL:  We‘ve got to get those people back.  So, I would like someone who talked more to the middle. 

But, having said that, for Rush Limbaugh and all those other people who are taking delight in Howard‘s ascension, be careful what you wish for, because Howard Dean will be focused.  He will work like nobody has ever worked.  He will energize the base of this party.  He‘ll grow the base of this party.  He‘ll grow our fund-raising. 

And, as for his role as the public spokesperson, No. 1, Howard says—and I had a long conversation with him—that he has a plan to have a lot of people, including governors and mayors, speak for the Democratic Party.  And, No. 2, I think Howard is smart enough to understand this is a different role.  He understands that they have got to get a message that resonates in the red states. 

So I think you‘re going to see a different Howard Dean as spokesman of this party.  Howard is smart.  He knows the issues.  And if he can give that measured response—and that remains to be seen, if he can restrain himself.  You know, I did not do such a great job restraining myself, Chris.  But if Howard can do better than me and restrain himself, I think he‘s going to do the other roles of a chairman extraordinarily well, increase the enthusiasm, make us a party that can do a whole lot more on the ground than we‘ve ever done before. 

MATTHEWS:  Let me ask Governor Sanford, do you think that the presidential budget that President Bush came out with last week, which cuts a lot of agricultural programs in a way that really is going to cause a lot of concern, do you think that‘s helpful politically to you and to other Republicans from states with big agricultural programs, agricultural communities? 

SANFORD:  You know, I think, Chris, we‘ve got to get away from looking quite so specifically at each different tranche of government spending and look at the big picture. 

And the big picture is that the federal government is a disaster with regard to long-term spending.  If you look at the accumulated deficits that are projected to come our way in the out years between now and basically 10 years from now, we‘ve got a real problem.  And so I would give the president a whole lot of credit for attempting to rein in spending. 

We have a fundamentally flawed agricultural system, wherein we literally pay farmers not to farm in some cases.  Or, in other cases, we pay people literally to clip coupons, if you want to call it that.  They may live in Palm Beach. They may live in New York.  And these aren‘t farmers.  We need to make sure that ag dollars actually get down to the farmers and that we cut out some of this excess. 

And that was something that I was and others were a part of back when I was in Congress.  These things have a remarkable resilience.  So, what you see in the president proposing and the Congress disposing yet remain to be seen.  Look at something like the mohair subsidy.  It was put in place after World War II to help military folks with field jackets.  It is still in place today.  And certain notables, Sam Donaldson and others, collect in subsidies who have nothing to do with farming. 

MATTHEWS:  Yes.   

SANFORD:  We have got to reform that system.  And that is what he is proposing. 

MATTHEWS:  What‘s your biggest agricultural product in South Carolina, Governor? 

SANFORD:  Timber and—timber is the biggest one.  And beside that, you would have tomatoes.  Interestingly, tomatoes, cantaloupes, cucumbers, you go down, the produce crops get no subsidy whatsoever.  It is really the grains that gets subsidies. 

MATTHEWS:  Let me go to Governor Rendell.

Do you take the same equanimity towards this issue of cutting agricultural programs?

RENDELL:  Well, I don‘t take the same equanimity, although I think Governor Sanford is right.  There are cuts and then there are cuts.  If you cut out programs that really don‘t work, programs that give subsidies to people who don‘t need them, you‘re on the right track.  And, certainly, I did that as mayor of Philadelphia and I‘m doing it again as governor of Pennsylvania. 

But Governor Sanford is kidding himself and kidding the audience if he wants people to believe that the cuts in the agricultural subsidies don‘t hurt real farmers and real family farmers as well.  It is not the fact that...

(CROSSTALK)

SANFORD:  Eddie, you can‘t have your cake and eat it, too, on that. 

RENDELL:  Oh, yes, you can.  You can make smart cuts, but not broad-brush cuts. 

MATTHEWS:  Let me ask you, Governor Rendell, who is going to be more helpful to you in your reelection and Democrats running next year, Howard Dean or the president‘s proposal on Social Security? 

(LAUGHTER)

RENDELL:  I think the party chairman can be helpful on party organization type things. 

But I think what is happening in Washington has some effect on local elections, more on Senate elections than governor‘s elections.  But I think I give the president credit for tackling Social Security.  I think it needs to be tackle.  No, it is not an immediate crisis, but we need to do something about it for our children and for our children‘s children. 

(CROSSTALK)

MATTHEWS:  You are making me feel like Oprah Winfrey here.  Everybody has been so reasonable. 

(CROSSTALK)

MATTHEWS:  Do you really think the president hasn‘t given you guys a firecracker of an issue? 

RENDELL:  Oh, of course, because—not because he‘s tackled the issue, but because his solution is all wrong. 

If we want to do personal accounts, we can do what, believe it or not, Al Gore suggested in 2000, Social Security-plus. 

MATTHEWS:  Who? 

RENDELL:  Al Gore.  You remember Al Gore. 

MATTHEWS:  OK.  Go ahead.

RENDELL:  Social Security-plus, where he allows people to invest, invest some of their money, and, for poor people, we even—government even matches those investments in the equivalent of personal IRAs that are not employer driven. 

We can do that without touching Social Security.  We have to keep

Social Security whole, No. 1.  No. 2, we can‘t pay and have three-quarters

·         and even if you take Bush administration‘s best case scenario—three-quarters of a trillion dollars added to the national debt.  That national debt is starting to kill us everywhere.  We can‘t do that.  And the first thing we ought to do is raise the cap on the payroll tax.  That would affect me, but I don‘t think it is unfair at all.  We should raise the cap on the payroll tax. 

MATTHEWS:  I‘m sorry, Governor Sanford.  We‘ll give you much more time to make up for this next—we can talk more about Social Security next time and the president‘s plan when you come back the next time.

(CROSSTALK)

SANFORD:  ... wait.

(LAUGHTER)

MATTHEWS:  I was kidding.  I think it‘s a very difficult sell.

SANFORD:  I look forward to it.

MATTHEWS:  Anyway, thank you, Governor Rendell.  And he‘s been very nice. 

You‘ve both been very nice to the other party.  You‘re very magnanimous fellows.

SANFORD:  We‘ll be rude next time.  We promise, Chris. 

(LAUGHTER)

MATTHEWS:  It must be a long way to election.  Anyway, thank you...

(CROSSTALK)

RENDELL:  Tell Governor Sanford he‘s not coming back unless he‘s tougher on us. 

MATTHEWS:  OK.

SANFORD:  All right. 

MATTHEWS:  You know, Pennsylvania is one of three oldest states in the union, Governor Rendell.  You know that.  You have got to look out for those people. 

Anyway, when we...

RENDELL:  We‘re the second, second oldest. 

MATTHEWS:  Second oldest?   OK.  You always know more than I know. 

(LAUGHTER)

MATTHEWS:  When we come back, journalists Margaret Carlson and Debra Saunders take on President Bush‘s second-term agenda.  And that will be hot, too.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, how will Republicans and Democrats use Social Security against each other?  Debra Saunders and Margaret Carlson will be here to duke it out when HARDBALL returns.

(COMMERCIAL BREAK)

(NEWS BREAK) 

MATTHEWS:  For insight on the Iraqi vote that was just counted, the president selling of Social Security reform, and the future of the Democratic Party, we turn to two of the keenest minds in American journalism.  Margaret Carlson is a contributing editor at “TIME” magazine.  And Debra Saunders is a columnist at “The San Francisco Chronicle,” my old paper.

Let me start with you about the—with Debra out there in San Francisco.  What did we win in Iraq with this election, besides the process itself? 

DEBRA SAUNDERS, “THE SAN FRANCISCO CHRONICLE”:  We don‘t own it anymore.  We won the fact that the Iraqis have chosen the government that they want and that they can—people won‘t be able to say that the new leadership was handpicked by the United States federal government.  And the Iraqi people are stakeholders and they get to decide what happens in their country.  A big win. 

MATTHEWS:  OK, Margaret, what did we gain?

MARGARET CARLSON, CONTRIBUTING EDITOR, “TIME”:  Only some of the Iraqis have chosen to government they want.  And that‘s the problem that we face going ahead, after the euphoria of seeing all those ink-stained fingers, because the Sunnis did not participate.  And the question is, is this going to reduce Sunni insurgency?  Not yet. 

Are we not going to have a theocracy similar to the one in Iran?  Let‘s hope not.  It is something the United States fought against for so long.  Now Americans may be dying to put in the very kind of government we hoped would never exist there. 

MATTHEWS:  Well, let me ask you, Debra, do you think the United States military men and women fighting over there, risking and giving their lives, should fight for a theocracy if it comes to that? 

SAUNDERS:  Well, I don‘t think you‘re going to get a theocracy.  I think you‘re going to have people who have a very different sense of what a government should do. 

And, I mean, look, you‘re going to have Muslims running that country.  But that doesn‘t mean that they‘re going to have Sharia.  It doesn‘t mean that they‘re going to say that one religion has less rights than others.  We‘ve seen a lot of reasons to think that people there want the government to work and they realize that they have to be fair to the other folks. 

I mean, look, you have got a constitution that can be rejected if three provinces say no to it.  And that includes three Sunni provinces.  So, obviously, there‘s a recognition that the majority can‘t just bludgeon the minorities.  And I think that that is the kind of government you‘re going to see.  Would it be the kind of government I would want to live under?  Not for a minute.  But if we are to be humble in our sense of a foreign policy, we have got to allow things that we wouldn‘t do here. 

MATTHEWS:  Margaret, well, there‘s not much choice now right now, is there?  If the Democrats say—Ted Kennedy, for example, was on this program.  He said, let‘s come home.  What happens if we just come home or start coming home?

CARLSON:  I think everybody wants to start coming home.  But you have got to get those—the—our troops come down as the Iraqi troops go up.  There‘s no other way to do it, because you can‘t not have a military. 

MATTHEWS:  That‘s what we did with Vietnam, and we ended up giving the country to the communists. 

CARLSON:  I know.  I know. 

But we have to cut, but we can‘t run.  So, it has got to be calibrated, how you get out of there.  And there may be a way to separate now the Sunni insurgents from—the hard-core terrorists from the Sunni mainstream, who we could get over to the side of the Americans now that they have their own government—not the side of the Americans, but the Iraqi government. 

MATTHEWS:  Yes, but you said a moment ago there‘s no Sunnis in this new government. 

CARLSON:  Well, Ayatollah Sistani says his party is going to try to bring some in.  Let‘s see who comes in, how many.  Sistani also says his party is going to meet separately and vote as a bloc on everything.  That‘s not a good sign. 

And some of what they want, which is multiple wives for males, Iraqis, Shias, and inheritance only going to men, some of that sounds very much like a theocracy. 

MATTHEWS:  Would that bother you, Debra, if we were supporting a government like that? 

SAUNDERS:  Yes, it would bother me, but I still think it is better than what we had before.  There are a lot of things that bother me about what other governments do. 

But, again, we‘re not in charge there.  And they‘re going to do things that we don‘t like.  At least they‘re going to make the choices that they make.  And if they want U.S. troops to stay, it will be an Iraqi decision.  And if they want U.S. troops to go, I don‘t think a lot of people in this country will shed tears. 

(CROSSTALK)

MATTHEWS:  You know, right now, the polling shows it is just about even on the question, was the war in Iraq worth it because of these elections?

It is amazing, Margaret and Debra, how close this country is on this issue.  It is just about 47-47 on whether this war was wore it.  I find it amazing that after, all this time, we‘re just evenly divided. 

CARLSON:  Just to Debra‘s point, it doesn‘t matter whether it bothers us.  It matters whether it bothers the Kurds and the Sunnis. 

And on that point, remember, Howard Dean, who was just elected DNC chair, may have been right way ahead of his time, because now it is about half and half thinking that we‘re not safer having gone into Iraq and having deposed Saddam Hussein. 

MATTHEWS:  Well, politically, we‘re going to have to ask—let‘s come back with Debra Saunders.  I want to talk about Social Security, because everybody out here hopes to get it some day.  It is the one guaranteed American common interest, get as many years of Social Security as you can, because that means how many years you‘re going to live. 

(LAUGHTER)

MATTHEWS:  We‘ll be right back with Margaret and Debra when we come back.

And don‘t forget to check out Hardblogger, our political blog Web site.  Just go to HARDBALL.MSNBC.com.

(COMMERCIAL BREAK)

MATTHEWS:  I want to talk about Howard Dean in a moment.  But I‘m back now with Margaret Carlson of “TIME” magazine and “The San Francisco Chronicle”‘s Debra Saunders. 

Debra, I looked at a poll yesterday that showed—it was a Fox poll, actually, certainly not a left-wing poll—that showed every single age group in America believes it will suffer, will be worse off, under the president‘s Social Security plan.  That makes it hard to sell, doesn‘t it? 

SAUNDERS:  Yes, I think so. 

(LAUGHTER)

SAUNDERS:  It‘s a problem.  And everybody said it was the third rail of politics.  I guess this is a time when conventional wisdom was right. 

MATTHEWS:  Well, it is.

You know, I always remember that woman—I may have told this before on the air—but the woman who was against Barry Goldwater and somebody said, well, why are you against Barry Goldwater?  And the woman said, because he‘s going to take away my TV.  And the commentator said, well, not TV.  The Tennessee Valley Authority, he is going to privatize that, the TVA.  And she says, I‘m not taking any chances. 

(LAUGHTER)

MATTHEWS:  And I just wonder whether the attitude of this country is, I‘m not taking any chances?  Is it, Margaret? 

CARLSON:  Oh, well, partly. 

Who wants to give up a defined benefit plan for a defined contribution plan, when we‘ve seen what has happened over the last five years with the stock market up and down?  I‘m in a defined contribution plan at Time Warner. 

MATTHEWS:  Right. 

CARLSON:  And, hey, Time Warner‘s stock is way, way down.  I don‘t know that the whole country wants to reverse what FDR said, which is, you will have a civilized retirement in this country.  We want dignity for everybody. 

(CROSSTALK)

MATTHEWS:  What about the argument raised earlier in the program, Debra, that young people—even though they will see problem perhaps go down, it may not succeed in passing both houses and getting a presidential signature, but they‘ll see the Republican president—he is a Republican, as well as being everybody‘s president—making the case for more freedom, more options in life, more opportunities to save money.  Could he win the political argument even if he loses the legislative argument? 

SAUNDERS:  You know, I think there‘s a chance of that. 

And can I respond to something Margaret talked about? 

MATTHEWS:  Sure.

SAUNDERS:  With the—kids are going to hear the word defined benefit and their ears are going to turn off. 

But a lot of people look at Social Security as a sure thing.  And it is sort of interesting, because nobody called Social Security a sure thing until Bush talked about privatizing.  All of a sudden, now we think it‘s a sure thing.  I‘m not so sure it is.  We‘re going to see some private pensions fall into bad times.  And people are going to start looking at what happens with what they thought was promise, and it is not. 

And they‘re going to look at 401(k)s as a sure thing in the future.  So that‘s the reason why this could work for Bush politically, even if it is a hard sell on Capitol Hill. 

MATTHEWS:  Debra, can you imagine a time where the federal government would actually say to retirees, we can‘t pay you? 

SAUNDERS:  Yes. 

MATTHEWS:  You can? 

SAUNDERS:  We will have to pay you less.

MATTHEWS:  Wouldn‘t they simply—being politicians, wouldn‘t they simply borrow it, add it to the deficit? 

SAUNDERS:  We‘ll to have pay you less.  We can‘t give you as much.  And if Washington doesn‘t do something about what is happening now, that will happen. 

And right now, the government is saying to people whose pensions they thought were protected by the federal government that they are not going to get as much because they allowed the corporations that promised them something to put in less money than they should have.  And they had—I hate to say these words again—but unfunded liabilities in the pension systems. 

CARLSON:  But this is because United Airlines invested poorly.  I don‘t think the government is in the business of throwing pensions into bad investments.  It‘s one of the reasons they invest in dull bonds.

Enron, United Airlines, U.S. Air, they‘re all not living up to their pensions, because they did—not only did they do poorly as businesses.  They did poorly as investors. 

MATTHEWS:  Let me ask you, Margaret.  You know how the Democrats—both parties do this.  The left and the right do it.  These activist groups get out there.  They don‘t need Internets or Web sites or blogging to do it.  They simply start sending mail to older people and scaring the bejesus out of them. 

What happens when the Democrats and all these groups and the Committee to Save Social Security, all these groups, just start sending people mail, emergency letter, emergency notice?  You know how they do it? 

CARLSON:  Urgent.

MATTHEWS:  Urgent.  Urgent.  Read this now.  Immediately send $50 or you will lose your Social Security.  What happens when that game starts? 

(CROSSTALK)

CARLSON:  No, but this is the first time Republicans have tried scaring young people, saying, listen, you are not going to get it when you‘re older.  That part has kind of worked.  That poll shows that young people don‘t think they‘re going to get Social Security.  What they don‘t believe in is the solution. 

MATTHEWS:  Debra, we have nothing to fear but fear itself, but won‘t fear the name of this fight?

SAUNDERS:  Well...

MATTHEWS:  Trying to scare both sides.  One side scares the other with change.  The other scares the other side with status quo. 

SAUNDERS:  Chris, you‘ve said this.  One thing goes wrong, the whole thing fails because the public can‘t be behind it.  This is a really hard sell. 

But it doesn‘t mean it is not worth discussing.  And I think for people to talk—look at Social Security the way it now as this great, cushy, safe thing, it is a mistake, because it isn‘t as safe as people think it is. 

CARLSON:  Democrats should hope this is out there for a really long time before it dies, because I think it makes Bush and the Bush administration look careless. 

MATTHEWS:  Why do you think the president is doing it, Margaret?  Why is he risking so much? 

CARLSON:  I think Charles Schwab whispered in his ear at an economic summits, private accounts would be a really good idea, the ownership society.  And he bought it.

MATTHEWS:  I think on this issue, I think he truly is...

CARLSON:  It‘s the same thing as WMDs.

MATTHEWS:  I think, on this issue, he truly is a committed conservative and would like to reduce the role of government.  I think he is an ideologue on this, for better or worse. 

Anyway...

SAUNDERS:  He believes in the ownership society.

MATTHEWS:  I think he is a philosopher.  I think he believes in it.

(CROSSTALK)

MATTHEWS:  Thank you, Margaret Carlson and Debra Saunders. 

Join me tomorrow night at 7:00 Eastern on HARDBALL.  Emmy and Golden Award winner Tom Selleck, our buddy, one of the most independent voices in Hollywood, will be here.

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

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

END   

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