updated 5/2/2005 2:17:32 PM ET 2005-05-02T18:17:32

Guests: Hilary Rosen, David Gergen

CHRIS MATTHEWS, MSNBC HOST:  Tonight, President Bush meets the press for the first news conference of his second term.  From Social Security to gas prices, to judicial nominations, can he convince congress to enact his agenda?  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews, and this is special edition of HARDBALL.  President Bush held fourth prime time news conference of his presidency, and as 60 day campaign to sell Social Security reform nears it end, he gave it one last pitch and proposed changes that would favor low-income retirees.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off.  By providing more generous benefits for low-income retirees we will make this commitment.  If you work hard and pay into Social Security your entire life you will not retire into poverty.

(END VIDEO CLIP)

MATTHEWS:  He admitted there‘s only so much he can do when it comes to lowering gas prices.

(BEGIN VIDEO CLIP)

BUSH:  If we can get nations that have got some excess capacity to put crude on the market, the increased supply hopefully will meet increased demand, and, therefore, take the pressure off price.  But, listen, the energy bill is certainly no quick fix.  You can‘t wave a magic wand.  I wish I could, like the soldier at Fort Hood that said how come you are not lowering the price of gasoline.  I was having lunch with the fellow and he said, go lower the price of gas.  I wish I could.  It just doesn‘t work that way.

(END VIDEO CLIP)

MATTHEWS:  And the president said his judicial nominees deserve straight up or down vote on the Senate floor.

(BEGIN VIDEO CLIP)

BUSH:  Speaking about judges, I certainly hope my nominees get an up or down vote on the floor of the Senate.  They deserve an up or down vote.  I think for the sake of fairness these good people I have nominated should get a vote.  And I am hoping that will be the case.

(END VIDEO CLIP)

MATTHEWS:  “Newsweek‘s” Howard Fineman is with us, along with liberal activist, Hillary Rose and she is sitting to my left, and former advisor to four presidents, a real witness to power, David Gergen.

David, thanks for joining us.  You are the new kid on the block right now.  I thought the headline was this sliding scale for Social Security cost of living adjustments.

DAVID GERGEN, “U.S. NEWS & WORLD REPORT”:  That certainly was the news, Chris, that he has embraced now this notion put forward by Bob Pozen, here in Boston, well regarded for financial acumen, and run financial companies here in Boston, as well as taught, and that is to have a sliding scale, so lower income people, their Social Security is tied to increases in wages and higher income people are tied to inflation rate, and of course, the inflation rate is lower than the increase in wages, so it helps low income people.

But he held firm, interestingly, enough on the retirement accounts, and insisted they be part of a package, so I am not sure he yet has enough to bargain with the Democrats.  I can‘t imagine Democrats are going to accept this now as a bargaining position.

MATTHEWS:  What did you think about his discussion of gas taxes in a way that said, basically, you know, we can do a lot of things in this country in the short run, but it won‘t affect gas prices at the pumps for months or years ahead.  The real decider is what happens on the world crude market.

GERGEN:  Well, I think that was an acknowledgment that the president of the United States cannot wave a wand and have the waters part.  And the one thing I thought he was trying to accomplish politically this has been building up for a long time, we can only solve it over the long haul, and I also thought he is particularly effective when he talks about energy because he knows so much about it.  I think he always shows, this is an area in which he is very knowledgeable.  I don‘t think he helped himself much politically.

Politically as an overall press conference, my judgment was, and I will be interested in hearing your other guests, my judgment was that had this been a press conference in his first term, sort of 90 days in to his first term, it would have been fine, very positive, on top of his material, knowledgeable, confident, and the rest.  Coming now, I thought it was a very different context.  If anything, I thought he was politically—went into this press conference third and long, and while he did well, he came up a little short.

MATTHEWS:  Do you think he was smart to separate himself so dramatically from what‘s called the Christian Right, the culture conservatives, Tony Perkins, Focus on the Family, he doesn‘t believe, as apparently Mr. Perkins was quoted as saying recollect those who support filibuster in judicial nominations are fighting or attacking people of faith?

GERGEN:  Well, he certainly took some of the wind out of the sails for those folks, and clearly distanced himself from Bill Frist and Tony Perkins and other people.

MATTHEWS:  Yes.

GERGEN:  I thought there was no question what he was doing.  That was the one effort he made in the press conference that while he distanced himself from the right but I think he probably won some converts in the middle.  People who felt, at least on that issue, he is not going to be scary.  I thought where he helped himself politically in broadening the support level for himself among moderates who started to drift away from him and are worried Republicans have reached way over into the religious right.

I think he distanced himself not only from that, but in effect, I thought he distanced himself a little bit from the Schiavo case and I thought that helped him politically, but I did not think he helped himself overall with the press conference as much as he needed to.

MATTHEWS:  Let me go to Hilary Rosen.  The president did take a stand on Social Security, he said that can bring solvency to the system, if we employ new way adjust for cost of living.  If we adjust for prices, upper income people, over $20,000 a year, upper income.

HILARY ROSEN, DEMOCRATIC STRATEGIST:  That‘s right.

MATTHEWS:  We will save money, and can use some of the money for helping less well off people.  Do you think that will sell?

ROSEN:  Well, I don‘t think it will sell, and I think it will turn out to be seen as a little deceitful on the president‘s part because essentially what he was saying was we are going to cut people‘s benefits, if you make more than $20,000 a year.

MATTHEWS:  In real terms.

ROSEN:  That‘s not exactly what he started out this process doing.

MATTHEWS:  How do you cut benefits if you adjust for price?

ROSEN:  Well, because you are not increasing—It would still cost more every year to go buy things, and income isn‘t going up, so in effect, you are experiencing .

MATTHEWS:  No, no, give person full consumer price index increase of, say, whatever the percentage of inflation was that year, and add that to their benefit, how is that hurting them?

ROSEN:  But you won‘t do that for anybody more than $20,000.

MATTHEWS:  No, they are going to.  Just not going to adjust for wages.  They are going to—No, you are wrong.  They are going to adjust for prices, not going to adjust for wages, which was higher standard.  Howard, am I right?

HOWARD FINEMAN, MSNBC POLITICAL ANALST:  You are right.  But, the democrats are going to say, wait a minute, if you did it the old way for everybody, then .

MATTHEWS:  Higher.

FINEMAN:  It would be higher.

MATTHEWS:  Right.

FINEMAN:  So it‘s going to be a cut in the nomenclature.

MATTHEWS:  From the growth, but not in real terms from your current income.

FINEMAN:  Right.  That‘s always the argument about how you index these things.

MATTHEWS:  Can we all agree the president tonight touched the third rail?

FINEMAN:  He not only touched it, he embraced it, he lay down on it.

ROSEN:  But he made that decision a couple of months ago.

FINEMAN:  Strapped himself to the track.

MATTHEWS:  David, you remember these cases, 1982 - 1986, when you had people like Paul Hawkins, the Republican senator from Florida, Jeremiah Dent, and slew of others basically supported what was Reagan‘s tentative position to adjust COLAs, cost of living downward and they all lost.

GERGEN:  Yeah, I think that‘s right in the old days, Chris, but it seems to me, the third rail is not quite as electrified as it was before.  And as Howard said, he did lay down on it, but he has been on the third rail now for a long time.  What I thought he did do tonight was to make a decision.  Where is he going to get the rest of the reductions, in Social Security, is he going to get it out of higher tax or reducing benefits?  And he made a clear choice tonight, I am not going to allow taxes to go up, but I am going to adjust benefits for the upper income.  With all due respect to Hilary Rosen, I think that‘s negotiable position with a lot of Democrats.  I think a lot of Democrats agree that‘s a sensible approach for one aspect of Social Security reform, what I don‘t think they will buy is retirement package as part of that.

MATTHEWS:  Will they buy it before the election David?GERGEN:  What‘s that?

MATTHEWS:  Will they buy it before or after the next election?  You‘ll know they‘ll buy it after it.

ROSEN:  The question was the numbers.  You know, David may be right, if we really were talking about the same upper income people who benefited the most from the president‘s tax cuts, maybe you could have a negotiation with the Democrats over that, but that‘s not really the number they are talking about.  They are really talking about true middle income people, $35,000 a year to $60,000 a year receiving up to a 30 percent benefit reduction.  That‘s not going to be negotiable for ...

FINEMAN:  Couple things.  I think you keep mentioning Paula Hawkins, what happened in 1986.  I think to some extent, to pursue analogy to ridiculous degree, there is a little less juice flowing through the third rail, it‘s not quite as dangerous, but paradoxically, the president has made it more dangerous for himself by stressing private accounts, personal accounts, call it what you will.  Because that struck everybody, wait a minute, this guy wants to totally turn Social Security upside down.

If he had just gone more surgically for mix of benefits and taxes like 20 years ago, he could have gotten progress on it, but he actually got it backwards.  He actually got it backwards the way he has tried to sell this thing.

MATTHEWS:  Howard, is this going to affect people, retired now, this adjusting in cost of living?

FINEMAN:  No.  It doesn‘t affect anybody born before 1950.  And the president has gone around the country and used quarter of his entire spiel.

MATTHEWS:  Even this piece of it.

FINEMAN:  Even tonight saying if you were born before 1950, none of this is going to affect you.

MATTHEWS:  You still get the full waged based COLAs.

FINEMAN:  Get it all.  Wage-based, growth, the whole nine yards.  This is about everything after that, but what I am saying is by having gone after discussion of such a big fundamental change and the theory of it at the beginning, people are already scared.  Now he comes with the means testing.  It scares them further.

ROSEN:  Something more, by emphasizing so repeatedly it doesn‘t—oh, don‘t worry.  Anybody who is older now, don‘t worry.  It only creates more anxiety about what‘s actually going to happen to the people who should worry.

FINEMAN:  But he can‘t win for losing in your scenario.

MATTHEWS:  David, you‘re rumbling out there.  What are your thoughts? 

Is this not as bad as it‘s been said it is?

GERGEN:  Listen, I think had he argued in the beginning that these were going to be voluntary accounts, he has introduced the word voluntary several times tonight.  He wasn‘t calling it that way back then.  We were talking about partial privatization, then we moved to private retirement accounts.  I think the language he is using now is actually right.  I think the Democrats are so dug in, he is not going to crack that coalition.  And as long as he can‘t crack the coalition, it‘s nonstarter, whatever else he says.

I will bet you at the end of the day, though, when Social Security solution is finally found down the road somewhere, included in that will be something very similar to what he said about benefits tonight.  I agree with Hilary Rosen, it will be renegotiated for people in the middle, the Democrats will insist on treating them better.  But I think in the end what you are going to find is it is going to be more means tested as a way to deal with benefits, and I think the Pozen solution is very close to the final answer on benefits, I also think in the final answer it is going to include some payroll tax increases.

MATTHEWS:  Just reminder, we‘ll be re-airing the president‘s full news conference tonight, beginning at midnight Eastern Time.  That‘s 9:00 Pacific Time, of course, and we are looking forward to tomorrow‘s HARDBALL when Nicolle Devenish, the White House communications director will be our guest.  Also, tomorrow will mark 30th anniversary of the end of the Vietnam War for Americans, and we will be joined by two of America‘s most accomplished generals, Norman Schwarzkopf and Tommy Franks.

You‘re watching a special edition of HARDBALL only on NBC.

(COMMERCIAL BREAK)

(NEWSBREAK)

MATTHEWS:  Welcome back to this special edition of HARDBALL.  We‘re back with “Newsweek‘s” Howard fireman, liberal activist, I love the phrase, Hilary Rosen, and former presidential advisor, David Gergen.

David, I want to ask you again about this whole issue involved in so much on HARDBALL the last couple of weeks, that‘s the role in which religious conservatives are playing in a very effective manner, we must say, the last election, very effectively with regard to the Schiavo matter, and now apparently playing a big role with regard to this fight over whether we continue to have filibusters used against judicial nominations.  Is it your sense it‘s good for the Republican Party to have this tremendous involvement of people from the churches who are normally not that political?

GERGEN:  No.  I think it‘s good for the Republican Party that people of faith are deeply involved in politics, and they should be welcomed into politics, and I think they have been helpful to the Republican Party, but when the Republican Party overreaches as it was seen to do in the Schiavo case, and when Senator Frist was seen to be exploiting religion for political purposes, I think that was a setback for Republicans with a lot of moderates and others, for whom it represents a scary prospect, and I think the president very cleverly, not cleverly, but carefully walked himself back tonight from that position.

I think he very, very definitely moved back from what Senator Frist had done over the weekend.  And that does not mean the religious right is not going to continue to play continuing role but I think there‘s a big cover package in “Harper‘s” this month, about people in Colorado Springs, New Life, and so forth, I am sure for people of faith, that‘s exciting prospect, for a lot of other Americans, it‘s also, when people call themselves religious warriors or spiritual warriors, and we are going to establish America as Christian nation, that represents something pretty alarming to them, and I think the president was trying to be very reassuring on that point tonight.

MATTHEWS:  My experience with the Republican Party growing up, is the suburbs of the east.  Pennsylvania.  I hear from very good source out there the people aren‘t too happy about this, this whole involvement of this cultural issue, the strong, zealotry we are seeing here in terms of really painting the opposition as bad.  On the issue of the filibuster.  What do you hear, Howard?  Talking about Pennsylvania, the purple states, more or less.

FINEMAN:  In the purple states, I think it‘s problematic.  In the suburbs of Philadelphia, where you have moderate Republicans who like to win elections, they don‘t like to hear Dr. James Dobson, of Focus on the Family, is in charge of the Republican Party.  What George Bush subtly did today .

MATTHEWS:  Not party of Scranton and ...

FINEMAN:  And Arlen Specter for that matter, man on the middle in the filibusters.  What George Bush was trying to do tonight is take the leadership of the fight over the filibuster, and the judges, away from Bill Frist, and take it on himself, and make the argument that Frist was unable to make, because Frist picked the wrong forum to do it in.  Frist basically said the same things.  It‘s matter of fairness, except he said it in a video, in church event in Louisville, which turns out to have been a mistake, of a guy who is running for the presidential Republican nomination, who is looking at the Iowa caucuses and not the suburbs of Philadelphia.

MATTHEWS:  Was this Sister Soulja moment for the president, to separate himself from cultural people on the right?

ROSEN:  I just don‘t make that.

MATTHEWS:  You going to give him a break on this or not?

ROSEN:  I think he said a good thing, but I just don‘t make that much of it.  He has done this before with the religious right, several times throughout the campaign.  I think this is just a bunch of good cop, bad cop going on.  He wants his filibuster proposal to go through.  He doesn‘t want it to go down based on polling that he has seen with the religious right.  And—but he is not going to jump to the defense of Democrats who get attacked by these religious right groups for this purpose if they vote against filibuster.

FINEMAN:  Hilary, I agree with you, but I think that the .

ROSEN:  He is not .

FINEMAN:  . president has decided the way to get what he wants out of the Senate is to take his argumentative line, not Frist‘s.

MATTHEWS:  David Gergen?

GERGEN:  I agree with Howard‘s fundamental point, that he is trying to get it with his own argument.  I think he made a much better argument than Senator Frist, but having said that, what I can‘t understand, Howard, is contradiction between saying let‘s go forward with the filibuster, which is probably going to shut the Senate down, so he won‘t get Social Security, won‘t get energy, and his advocacy of I have got to have any energy bill and I have got to have Social Security.  It seems to me that it‘s very questionable, if the white house really believes it‘s the national interest to get Social Security done and get energy done by August, why do they think it‘s also in the national interest to have a filibuster that may shut down the Senate?  I don‘t get that.

FINEMAN:  My answer to your question, I think they think in the White House in their heart of hearts, they will win up or down majority vote on changing Senate rules, which is what we are talking about, they will get the 50-plus Dick Cheney in the chair, and they‘ll muscle it through.  They haven‘t really begun to twist arms on this yet.

GERGEN:  But Howard, but if they win, do they lose?  On energy and Social Security?

MATTHEWS:  They might win on the Supreme Court justices coming up next summer, David.

GERGEN:  That‘s what they care about above all.

MATTHEWS:  Maybe—could that be the primary goal of the Republican Party right now is conservative judges in the Supreme Court?

FINEMAN:  Yes.  I think so.  I think that that is the ultimate end of 20 or 30 years worth of growth and change in the Republican Party, is to make the changes on the Supreme Court.  That‘s what I think.

ROSEN:  But it makes really no sense, I agree with you, I think that might be what their base is looking at, but as a practical matter, senates, even with opposite party majorities, have never consistently denied the president their Supreme Court choice.  Maybe they have denied them their first one, once they even denied them their second one, but they have never denied them their third one.

That would not have happened, this Senate .

FINEMAN?:  I don‘t think he wants to take the chance.

ROSEN:  This Senate has approved 20 George Bush appointees who are anti-abortion, anti-civil rights everything that that agenda is afraid of.

MATTHEWS:  Wasn‘t it, Hilary, that the president, or rather Bill Frist, proposing today, it seems like a million years ago, there will be 100 hours limit on debate, in exchange to agreeing to have a vote at some point, including Supreme Court justice nominees?  When we come back, the news conference by the numbers, this is going to be fun.  We‘ll look at how many times President Bush touched on his top themes tonight.

You are watching special edition of HARDBALL tonight only here on

MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to this special edition of HARDBALL.  HARDBALL correspondent, David Shuster, is with us now to take a look at the news conference tonight, by the numbers—David.

DAVID SHUSTER, MSNBC CORRESPONDENT:  Well, Chris, the president‘s opening statement went eight minutes, that was half as long as his last prime time statement a year ago, his prime time news conference.  The rest of the news conference, 53 minutes, a total of 18 questions.  That‘s about average for this president in his news conferences.

A couple of surprises, though, the president received three questions about Social security, but he also got three questions about North Korea.  Two questions about Iraq, two on the war in terror, two on political atmosphere in Washington and one each on gas prices, the Bolton nomination, judicial nominations, Russia, economy, and education.

One big surprise, not a single question tonight about the ethics problems of Tom DeLay.  There were key issues President Bush wanted to focus on in this news conference, and he did, watch this.

(BEGIN VIDEO CLIP)

BUSH:  Today, there are about 40 million retirees receiving benefits.  There will be more than 72 million retires drawing Social Security benefits and Congress has ensured their benefits will rise faster than the rate of inflation, so I propose a Social Security system in the future where benefits for low income workers will grow faster for benefits for people who are better off.

(END VIDEO CLIP)

SHUSTER:  Social Security and benefits, the president mentioned the words “Social Security” 33 times in this news conference.  He talked about “benefits” 17 times.  “Personal accounts,” 12.  What about the other main issue he wanted to talk about?  Energy, he used the word “energy” 30 times.  “Gasoline,” 15.  In his news conference, the president tends to get asked about the situation in the Middle East.  He was asked about Iraq and used the word “Iraq” 15 times.  The other word he uses along with that, “progress,” 12 times, “democracy,” 11, and Condoleezza Rice, that should actually state instead of calling her secretary of state or Condoleezza Rice, he simply shortened it to “Condi.” “Condi,” three times tonight.  Chris.

MATTHEWS:  Great stuff, David Shuster.  I don‘t know how you do that. 

With a machine?  How do you do that?

SHUSTER:  The old-fashioned way.  Mark with slashes and compare to the transcript and hope that we are correct.

MATTHEWS:  So edifying.  Thank you David Shuster, our HARDBALL correspondent.

Let me go to David Gergen.  I heard him saying a moment ago, do you think judges should be selected on the base of ideology or competence by the United States Senate?

GERGEN:  I think it‘s appropriate for a president to select a person based on both competence and stance toward the law.  General philosophical outlook toward the law.  I don‘t think there ought to be a litmus test, but I do think an outlook toward the law is perfectly appropriate for a president.  What becomes important, Chris, is if the positions taken by the nominee seem so far outside the mainstream, even though they represent conservative or liberal view toward the law, they are so far outside the mainstream, it‘s been perfectly appropriate in the past for Republicans to question Bill Clinton‘s nominees to the court of appeals, and perfectly appropriate for Democrats to do that toward the President Bush nominees.  I think that‘s been the give and take of American politics.  After all, it is with the “advice and consent of the Senate.”  It‘s supposed to be with the “advice and consent.”

Especially now when we have moved away from going to the American Bar Association and instead go to groups outside the American Bar Association for clearances, I think it‘s even more important for senators to give serious, take seriously their role for advice and consent.

MATTHEWS:  OK.  We will come back and talk more with David Gergen and Howard Fineman and Hilary Rosen about the question of whether the Senate itself should set an ideological test for these fellows and decide sometimes to simply lay them aside, don‘t accept or reject, just kill nominations by inaction.  That‘s the issue before the issue for the Senate now, it‘s the big question about whether we get rid of the filibuster in such cases.  This is a special edition of HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(NEWSBREAK)

MATTHEWS:  Welcome back to this special edition of HARDBALL.  We are back with the panel, “Newsweek‘s” Howard Fineman, liberal activist, I guess we could say, Democratic activist Hilary Rosen, and former presidential adviser David Gergen. 

Here‘s exchange tonight and the president and NBC News White House correspondent David Gregory about judicial nominees. 

(BEGIN VIDEO CLIP)

BUSH:  David Gregory. 

DAVID GREGORY, NBC NEWS WHITE HOUSE CORRESPONDENT:  Mr. President, recently the head of the Family Research Council said that judicial filibusters are an attack against people of faith.  And I wonder whether you believe that, in fact, that is what is nominating Democrats who oppose your judicial choices?  And I wonder what you think generally about the role that faith is playing, how it‘s being used, in our political debates right now? 

BUSH:  Yes. 

I think people are opposing my nominees because they don‘t like the judicial philosophy of the people I have nominated.  Some would like to see judges legislate from the bench.  That‘s not my view of the proper role of a judge. 

Speaking about judges, I certainly hope my nominees get an up or down vote on the floor of the Senate.  They deserve an up or down vote.  I think for the sake of fairness, these good people I have nominated should get a vote.  And I am hoping that will be the case as time goes on. 

The role of religion in our society, I view religion as a personal matter.  I think a person ought to be judged on how he or she lives his life. 

(END VIDEO CLIP)

MATTHEWS:  Just guessing, I think the talking points here, David Gergen, might be up or down vote.  What do you make?  Do you think so? 

The president really punched that home a couple of times.  And he tried to do it a third time, and I think he heard himself echo, he didn‘t want to do that.  Clearly that want that issue. 

My hunch—is it yours—that sounds pretty true, that people do think, fairly or not, that a person that gets nominated for federal judgeship, ought to get the courtesy of a no or a yes from the United States Senate? 

GERGEN:  I think that‘s right, Chris.  And the notion that just laying it aside, I think, for most people is one that‘s sort of unfair.  It‘s like indicting somebody, and then not having a trial as you sort of put them into limbo.  So I think the president does get a lot of points when it comes to sort of arguing, give me an up or down vote. 

And so when you put that into polls, as Republicans have done on some of the internal polls, they get a lot of support for that.  But if you say, you know, change the poll, and say, well, we should loosen standards and so it makes it a lot easier for Republicans to get their judges through, it makes it harder for Democrats to object, as you know, the numbers change.

And people are against changing the filibuster rules, at least as measured

by the public polls we have seen. 

So, you know, how you come out on this depends a lot on how you argue the case, how the public comes out on it.  And right now, I am just astonished the degree to which this president now finds himself in a hole at the end of almost his first 100 days in the second term. 

Given where we were three, four months ago, he has just had not just a terrible time, but he‘s had just series of stumbles, so no matter what the argument is, he doesn‘t seem to get the benefit of the doubt this time.  So as I say, I think this press conference the first term would have been seen as great success.  In the second, when he is in a hole as deep as he is, I think he climbed some, but I don‘t think he got out of the hole. 

MATTHEWS:  Let me ask you about a couple of things, because you really are an expert in the White House, having served there so many times.  I know your a professor of Harvard on this about White House structure. 

The staffing of the nomination of John Bolton for U.N. ambassador, the vetting process, do you believe it‘s reasonable to assume that the president of the United States, this president, knew all these questions that were raised about sort of the office behavior, the manner in which he dealt with intelligence analysts, John Bolton, do you think the president knew that picture of him before he put his name up? 

GERGEN: I think everybody in town know that he was brusque and could be a difficult boss.  I don‘t think—I am sure the president did not know all the details of all of this.  I mean, some has come to light pretty late in the game.  But I don‘t think it was any doubt. 

You know, the story for circulating, long before Colin Powell became secretary of State, that Colin Powell said, if I go to the State Department, the one person I don‘t want there is John Bolton. 

And of course, he had to accept him.  So you know, there‘s been this friction for a long, long time.  I am sure the president was aware of all of that.  I am sure the president thought, I need a brusque, tough, confrontational man, and he made the argument tonight.  But I will bet in the vetting, they didn‘t get into all the detail that‘s now surfacing. 

MATTHEWS:  Howard? 

FINEMAN:  Couple things.  I think in the second term, this White House is underestimating the unity and the willingness to fight on every issue of the Democrats, No. 1.  And they have underestimated the subtle anger on the part of some Republicans who felt that in the first term, this White House was a little too heavy-handed, was twisting a few too many arms, was a little imperious on the war argument, and lots of other things, and now the Colin Powell over Iraq is still waged, the resentment of some moderate Republicans, and other Republicans, is coming out against this White House.  And the White House staff is not in every respect the same group of front-line characters they had first time around. 

They have not made dealing with the Congress a high priority, many of the times in the first term, and now there‘s a lot of resentment on the Hill.  And that‘s why a senator from Ohio, like Voinovich, who hadn‘t raised his head on these kinds of issues, suddenly calls a halt to the Bolton nomination, and says I am having an attack of conscience. 

Now what did he mean by that?  I thought that was an actually very interesting statement, conscience about what?  About Bolton?  About the war?  About the fights between State and Defense?  A lot of those buried arguments are coming out now. 

ROSEN:  Howard is right, but I think this really is more about the Republicans than it is about the Democrats.  We should expect Democratic unity, especially when they are in such a precious minority. 

MATTHEWS:  Why should we expect that? 

(LAUGHTER)

ROSEN:  Because they‘re a pressured minority.  It‘s really the majority who never shows unity, as you know.  And I think what happened is, these Republican members, this is a lame duck president in their mind.  These Republican members are worrying about their own races, they‘re worrying about their own futures, and Social Security is an unknown third rail for them. 

Public support...

(CROSSTALK)

MATTHEWS:  Do you think we have the second rate team at the White House right now, David, compared to last term? 

GERGEN:  I‘m sorry.  What did you say? 

MATTHEWS:  Do we have second rate set of personnel there?  Are they up to the level of—you know, this often happens in administration, the second team, are the second team.  They‘re the ones passed over in the first administration.  They get much better jobs, more important positions in the second, and they are not as good as the first team. 

GERGEN:  That‘s usually a very good analysis.  My sense is that most of the topsiders on the first team stayed.  They may be more tired than a new team.  And I also—it is a surprise to me—I think Howard‘s analysis is absolutely right, but I had assumed that these folks would bring the same political wizardry to the second term they brought to the first. 

I thought they had a very good read on the American public, the first term, on many, many issues.  But on the Schiavo case, they clearly misplayed their hand.  And I think in retrospect, I think many are going to argue that he made a mistake in going with Social Security as hard as he did, and made that his top priority. 

He didn‘t campaign on it during the campaign, didn‘t have a mandate coming out of the campaign.  And then put all of his chips on Social Security.  And it was like Medicare—healthcare for Clinton, you know, it was so easy to lampoon, or to harpoon his proposal from the left, that he is now in a deep hole on this. 

And I don‘t know how he gets out of this now, because you only have a short time to get things done in the second term.  And when you are stumbling like this and people aren‘t with you, and your numbers are frittering away on you—I have been surprised at the political misjudgments, by a team I thought so really excellent, whether you agreed with them or disagreed with them, they were good political heads. 

FINEMAN:  But, but, but, but, but. 

GERGEN:  Sure. 

FINEMAN:  The Democrats are succeeding right now, playing this very tight, defensive game.  I mean, they are not offering anything.  They are saying no to everything.  That‘s working in the short term. 

The one thing George Bush has going for him is his optimism and his willingness to engage big ideas.  I wouldn‘t count him out on all these things just yet because of that.  He is not looking too healthy right now politically, and his numbers are bad. 

GERGEN:  But, Howard. 

FINEMAN:  He has virtue of having opponents who don‘t have an agenda, of any kind, as far as I can tell. 

ROSEN:  I would agree with Howard on this point, that I think. 

FINEMAN:  Wow. 

ROSEN:  In many respects, the president has won on Social Security, because the Democrats the entire campaign, have been saying, this is about jobs, this is about healthcare, this is about poor people who are not getting breaks.  The president has managed to change the terms of the debate, where people believe the No. 1 domestic priority is Social Security, when it really isn‘t. 

But I think we should remember, they moved Karl Rove into the White House so that he could do for policy what he did for politics.  And I think that they just assumed they could muscle their way and organize their way through this with a well-funded R.N.C., with a well-funded message machine, and I think that fundamentally the proposals just aren‘t that good, and that‘s coming through. 

MATTHEWS:  OK.  When we come back, will Congress solve the impasse over the president‘s judicial nominees without resorting to the nuclear option?  That means changing the rules to outlaw filibusters in such cases. 

And don‘t forget, at midnight Eastern tonight, we will replay the president‘s entire news conference that some people saw earlier.  This is a special of HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to this special edition of HARDBALL.  We‘re back with the panel—Howard Fineman, Hilary Rosen and David Gergen. 

David, today, Senator Bill Frist, the Republican leader of the Senate, offered the Democrats 100 hours of debate on every court nominee if they agreed to actually have a vote at the end of the 100 hours, and it was just sort of dumped on by the Democrats. 

GERGEN:  Well, I think that in this case, Senator Frist—it was a shrewd move on his part, because it does sound like a very reasonable proposal to an awful lot of people, who think, well, isn‘t 100 hours enough, and then have a vote, up or down, as you said earlier.  But I am not surprised the Democrats held steady.  They don‘t want to do anything which curtails—I mean that, in effect, does curtail their filibuster rights.  This is not something that the Republicans were prepared to do, for example, during the Clinton era, and Democrats are not going to be prepared to do it now. 

But where that leads is probably a showdown.  I think Howard is right, that the Republicans are apt to win the showdown in the short term, and the real reason, I think, they want to curtail the filibuster is they want to show that if they can—if it only takes 51 votes to confirm, they are trying to send a signal to the president, you can send us a very conservative nominee, and we can get it through with 51 votes.  In other words, it will change who they might nominate.  That‘s what the conservatives tell me.  They want to get a signal to the White House, before he makes a choice, assuming that Justice Rehnquist is going to step down this summer, they want to send the White House the signal, saying you can now make a different choice than you would otherwise make, because you only have to get 51 votes. 

So I think they may well win it in the short term, but you know, there‘s such a thing as winning the battle and losing the war.  You can get a court nominee through, but it may really curtail your capacity to get anything else done as president. 

MATTHEWS:  Howard?  Can you lose the war?  The war is about, in your terms, the war is about getting a conservative chief justice, a conservative associate justice? 

FINEMAN:  That‘s the big question.  I think that‘s what this is all about, and I think within that box, it‘s all about Roe v. Wade, and it‘s about right to life versus choice.  That‘s what is the emotion behind this.  If you talk to Dr. James Dobson, as I have, the head of Focus on the Family, if you talk to Democrats who care passionately about that, that‘s what this is about. 

What David‘s saying, I think, is, if they win the procedural war, if they nominate a very culturally and socially conservative chief justice or new justice to the court, if they reverse Roe v. Wade, what does that do to the Republican Party?  I don‘t know the answer to that.  But abortion has torn the country apart before; it will tear it apart again. 

MATTHEWS:  When it throws it back to the states. 

FINEMAN:  If it throws it back to the states. 

MATTHEWS:  We‘ll be right back with a panel in just a moment to talk about someone who didn‘t come up tonight, House Majority Leader Tom DeLay, never mentioned tonight by the president or the press.  And don‘t forget to check out Hardblogger, our political blog Web site.  Just go to hardball.msnbc.com.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to this special edition of HARDBALL.  It‘s getting late here.  We‘re back with the panel, Howard Fineman, Hilary Rosen and David Gergen. 

David Gergen, again, we haven‘t heard from you until lately tonight, I‘d love to know what you think about Tom DeLay.  Do you believe that his investigation, which is now forthcoming, is going to be a danger for him? 

GERGEN:  Sure.  That‘s why he didn‘t want to have it.  The—you know, there is a certain amount of pounding after a while, no matter what the facts are, people are going to start to make assumptions.  And I think it gets to be—it‘s dangerous territory for him. 

I think the president did not mention it tonight, because the president has already sent an incredibly important signal about Tom DeLay when he brought him back from Texas on his plane.  He threw his arm around him, basically, and said this is my guy.  And they‘re going to stick with him as long as he is, quote, “effective.”  That‘s the standard they‘re using, and if he starts going down in the House and other Republicans start peeling away from him, they will move, too.  But they need him up there.  He‘s the guy who can get things passed, you know, and he is doing a lot of good work for them up there. 

But I do think he is—I think that this investigation brings to light more stories, more questions, a lot of swirl, then a lot of people are going to—the Democrats are going to clearly try to turn him into late Newt Gingrich, you know, how they used Newt as a punching bag for a while. 

MATTHEWS:  Howard. 

FINEMAN:  I think what the White House is worried about is less Tom DeLay specifically than that whole group of lobbyists—Jack Abramoff is a name some people may have heard and others around town, they are sort of like pulling them up out of the bottom of the sea onto the boat.  And they might have not only the name DeLay written on it, they may have the name Bush and Rove and others written on it.  People who were lobbied by these people.  And if it‘s guilt by association, that‘s the way things work around here, unfortunately.  I think that‘s what the White House is worried about, because you are really looking at the whole machinery of Republican-based lobbying in town now. 

It used to be a Democrats-only enterprise.  Now it‘s run by the Republicans.  And one thing about George Bush, he doesn‘t like anything associated with any kind of crossing the line, lobbying stuff.  You can call him a corporate toady.  A lot of liberals and Republicans—and Democrats do, but he does not like that type of stuff associated with his name.  His father didn‘t like it, and he doesn‘t like it either, and that‘s a threat to him.  That‘s a bigger threat to them...

(CROSSTALK) 

ROSEN:  He likes to (INAUDIBLE) to give the money away himself.  He doesn‘t like to be asked to give it away. 

FINEMAN:  Exactly, right, exactly.

ROSEN:  But I think Tom DeLay‘s problem is actually—and Jack Abramoff was a big fund-raiser for the president, which has come out lately.  I think Tom DeLay‘s problem is much more parochial, which is that now they have 30 members of the House Republican caucus meeting regularly to plan the DeLay defense.  So they‘re regularly meeting on messages and attack strategies, and distracting themselves from the messages of the day, whatever they want to get done.  And I just think members will not tolerate that very long.  And what tends to happen in Washington is that members get more tired of defending other members before prosecutors actually come up with conviction evidence. 

MATTHEWS:  And so?

ROSEN:  And so I think he‘s done.  It‘s just a matter of when. 

FINEMAN:  I don‘t think he‘s done yet.  But...

ROSEN:  Not yet.  Not yet, but a matter of when. 

FINEMAN:  The Democrats would love to—the Democrats would love to draw the drama out all year, and at some point the White House is going to say, we don‘t want it. 

MATTHEWS:  David Gergen, looking ahead, do you think the 2006 elections are going to be good for the opposition party or the governing party? 

GERGEN:  The way it‘s heading right now, I think that the House won‘t change much, because of the way that the lines are drawn, but I think in the Senate, I think you could see some real gains for the Democrats that are totally unexpected. 

I mean, we are in an incredibly different place today than we were 90 days ago.  This has moved much more in a pro-Democratic direction.  I don‘t agree with Hilary Rosen, I don‘t think Social Security has been a win for the Republicans at all.  I think it‘s shaping up as a potential serious political setback for the president, the first major one he‘s faced, and—on domestic issues.  And his whole second-term presidency is I think really at risk now. 

So I think there is a chance the Democrats, first time in a long time, the Democrats have a reason to hope.  They don‘t have an agenda of their own, but I have to tell you something, Harry Reid is turning out to be one heck of a lot better leader than anybody might have assumed in keeping them together in the Senate. 

MATTHEWS:  He sure is.  Thank you very much.  We miss you, we miss you, David Gergen. 

GERGEN:  OK, thank you. 

MATTHEWS:  (INAUDIBLE) tonight.  I know you only come back for these big events, but...

(CROSSTALK)

MATTHEWS:  Hilary Rosen, as always, thank you. 

ROSEN:  Can I just clarify real quick?

MATTHEWS:  Quickly.  Very quickly.

ROSEN:  I think that—not that the Social Security is a win for Republicans, it‘s that Democrats need to offer something proactive. 

MATTHEWS:  OK.  Hilary, Howard Fineman, thank you.  We are looking forward to tomorrow‘s HARDBALL, when Nicolle Devenish from the White House -- she‘s head of communications there—will be our guest on HARDBALL.

Also tomorrow, we‘ll mark the 30th anniversary of the end of the Vietnam War, with Schwarzkopf and Tommy Franks.  Back tomorrow night at 7:00.

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

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