updated 8/1/2005 11:00:03 AM ET 2005-08-01T15:00:03

Guest: Amy Goodman, John Fund, Jean Schmidt, Trent Lott, Bill Nelson, Dan Bartlett

DAVID GREGORY, GUEST HOST:  About-face.  Senate Majority Leader Bill Frist, a likely 2008 contender, breaks with the president and social conservatives, backing an expansion of embryonic stem cell research. 

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R-TN), MAJORITY LEADER:  To me, it isn‘t just a matter of faith.  It‘s a matter of science. 

(END VIDEO CLIP)

GREGORY:  Will other Republicans follow their leader?  I‘m David Gregory.  Let‘s play HARDBALL. 

And hi, everybody.  I‘m David Gregory, in for Chris Matthews and reporting tonight from the White House. 

It bears repeating what was just reported a moment ago, late news from the Senate floor.  And that is, on the Roberts‘ nomination, that confirmation hearings will begin September 6, after the Labor Day holiday, after the August recess.  There was a fight about this between the White House and Republicans and Democrats.  Democrats wanted to start it after Labor Day.  Ultimately, that is what will happen. 

The White House still hopes there‘s enough time to get Judge Roberts in place, confirmed at the start of the Supreme Court term the first Monday in October. 

We begin tonight, however, with a dramatic move today by Senate Majority Leader Bill Frist, who broke with the White House and announced his support for an expansion of embryonic stem cell research.  The bill has passed the House and this fall will be considered by the Senate.  It would allow federal funding for stem cell research on cells that are left over after in vitro fertilization in fertility clinics and would otherwise be discarded.

President Bush has said he would veto any effort to expand research embryonic stem cell lines beyond the August 9, 2001, deadline he imposed. 

Late today, I spoke with Dan Bartlett, counselor to the president, about Senator Frist‘s change of heart. 

(BEGIN VIDEOTAPE)

GREGORY:  Dan, let me begin with a timing question.  How did the president feel about the fact that—that capping a week of notable achievement for this White House on Capitol Hill, between the free trade bill and energy and the highway legislation, that Senator Frist chooses this day to announce a pretty significant break with the president on stem cell research?

DAN BARTLETT, COUNSELOR TO PRESIDENT BUSH:  Well, I think you‘re right to point out that there has been a great week of progress on issues that are important to the American people, whether it be the free trade agreement, a comprehensive energy bill that this nation hasn‘t had in more than a decade, highway transportation bill.

This is great leadership and progress being made on Capitol Hill.  And Bill Frist deserves a lot of credit for helping bring that through.  Look, David, this is a very difficult issue for many members of the United States Congress.  It‘s a difficult issue for President Bush.  And I felt that Leader Frist decided this was a time to make his position known.  There‘s been a lot of discussions throughout the last several weeks.

I‘m sure what he wanted to do was to help frame that discussion going into the August recess, so it can be discovered in September and into the fall.  But that doesn‘t change the positions that the president has taken and what Bill Frist has taken.  We will continue to work with the Congress on this issue.  It is a complex issue. 

And—and President Bush recognizes people are going to vote their conscience.  But the president has taken a position that he believes is very important, one in which we‘re going to use taxpayer dollars on this type of research, that there are some ethical lines and principles that we ought to adhere to.  And he‘ll continue to make that case to the United States Congress. 

GREGORY:  The president in August of 2001 issued an order essentially saying that stem—embryonic stem cell research could go forward with federal funding, but limited to those existing cell—stem cell lines where a decision about life and death had already been made. 

Listen to Senator Frist render judgment on that order as it stands day vis-a-vis the science—Senator Frist from today.

(BEGIN VIDEO CLIP)

FRIST:  The limitations that were put in place in 2001 will over time slow our ability to bring potential new treatments for certain diseases.  Therefore, I believe the president‘s policy should be modified.  We should expand federal funding and the accompanying NIH oversight and current guidelines governing stem cell research, carefully and thoughtfully staying within ethical bounds. 

(END VIDEO CLIP)

GREGORY:  Dan, how does the president react to that? 

BARTLETT:  Well, obviously, that is a position that he has taken.  We believe that the 22 lines and what we‘re seeing through the type of projects that are being used, the 22 lines that are available have been able to allow more than 500 research projects by scientists to go forward. 

I also must point out that this is a discussion about federally tax—federal taxpayer dollars going into this—this research.  Nothing is holding back the private community, the private research and private sector going forward with certain—their types of stem cell research.  So, it‘s a difference of opinion there.  He‘s drawn his own conclusion.  Our experts who advise President Bush say the type of lines that we have there are allowing for the type of research to let the elementary research that is going on in the stem cell research. 

We don‘t know yet, David.  And we all hope that there‘s some potential with stem cell research to find the type of cures everybody wants to find, whether it come for Parkinson‘s or juvenile diabetes.  Everybody wants—shares the same goal in this project and in this endeavor.  But we believe that the type of lines that are accessible for federal funding is enough to get the job done.  They are funding current projects right now.

Like I said, over 500 projects are under way based on the 22 lines.  So, we believe that we have a very robust policy and one that is allowing the research to move forward. 

GREGORY:  But, Dan, are you suggesting that Senator Frist is wrong on the science, that there is that big of a divide in the scientific community about the utility of those existing lines now? 

BARTLETT:  Well, David, I don‘t think—this is a very complex issue.  And people can easily look at the same information and come to different conclusions.  That happens all the time.

But we believe based, on the information and the expert advice that President Bush has received, that we still have a robust research project going on when it comes to stem cell research.  And we‘re doing it without crossing that moral and ethical line that President Bush outlined in the speech you referenced. 

GREGORY:  Well, and the House legislation which is now moving through Senate, those who wrote it argue, look, this is consistent with the president‘s principles, because, in this case, what they‘re talking about is leftover embryos, stem cell lines, from in vitro fertilization treatment, where they would otherwise be discarded.  Will the president stick to his veto threat should that bill pass the Senate, after having passed the House? 

BARTLETT:  Well, David, obviously, we have a disagreement on the interpretation of that legislation.  It does cross the line, because using federal dollars to destroy life—and you would have to destroy life in order to do the stem cell research on those embryos. 

So, President Bush has come forward with initiatives to make sure that we can let those discarded embryos go up for adoption and have other alternatives.  Now, again, it is important we stress, if there are parents or family members that have these embryos and they want there to be research, there are private sector operations under way today that can allow for that to happen.  They don‘t have to discard them. 

So, it‘s almost a false choice to say that only federal funding can take place, when in fact there‘s a very robust private sector community...

GREGORY:  Right. 

BARTLETT:  ... that is using these cells for research. 

GREGORY:  Let me—let me ask you a question.  Since the president is on record as saying that he believes these leftover stem cells from in vitro fertilization treatment should be adopted, should be given to parents who want to have their own children and can‘t on their own, the president feels that—that that should be done. 

As an individual, not the president who is making a judgment about federal dollars, support the private sector work, research on embryonic stem cells? 

BARTLETT:  Well, he fully recognizes that it is taking place and it‘s something that individuals make those choices on their own.  What he has to make a decision on from a public policy matter as president when making decisions about taxpayer dollars is just that.

Should taxpayer dollars be used in an endeavor in which he believes destroys life?  And he believes that crosses a moral line that we shouldn‘t be crossing. 

GREGORY:  Let me move in our remaining moments, Dan, to a couple of other issues, first, the issue of John Bolton and whether he will be ambassador to the United Nations.  Has the president decided whether to recess appoint him? 

BARTLETT:  He has not.  Obviously, he retains the right to do so.  He believes and has been frustrated, quite frankly, by the fact that the United States Senate and Democrats in the Senate, for that matter, have denied him the vote that he deserves.  He has a majority support in the United States Senate. 

The work at the United Nations is critical.  It‘s vital.  We‘re in a process of fundamental reform that is going on at the U.N.  And we believe that John Bolton should be up there doing his job on behalf of the American people.  So, the president will take a look at this as the session here comes to conclusion.  He has not made a decision, but, obviously, he retains that right. 

GREGORY:  And you‘re not ruling out that he will as early as next week?

BARTLETT:  I‘m not going to make a decision for him.  He has that—that right to do it whenever he would like during this recess. 

GREGORY:  Let me turn in a final moment to the issue of John Roberts, Judge Roberts, your choice to replace Justice Sandra Day O‘Connor, the president‘s choice, on the Supreme Court. 

Senator Specter of the Judiciary Committee has said that the hearings will start after Labor Day.  The White House wanted them to go sooner, the last week in August.  What is your reaction to where they will be placed?  Will it give the Senate enough time?

BARTLETT:  Well, actually, David, we did talk about the fact that Judge Roberts should have enough time to have his hearings, have a vigorous floor debate, and then have a vote before the October 3 session starts of the new Supreme Court. 

And we think we can meet that goal.  The type of negotiations that‘s been going on in the Senate had that in mind, not just the last week of August or the first week of September, but the end game.  That means, when can he have a vote and when can he be sworn in?  And, in consultation with Leader Frist, as well as with Chairman Specter, we‘re confident that the September 6 hearing deadline will give us ample time for there to be a debate, to be a hearing, to be a floor debate and have a vote. 

So, we‘re pleased with it.  As you know, we‘re working vigorously to give as much information as we can to the Senate, so they can do their job.  And then we can have a vote, up or down. 

GREGORY:  Is there any room for compromise on the issue of access to the papers when Judge Roberts was deputy solicitor general?  Is there any room for any members of Congress, or the Senate, to view some of those memos, if not all of them? 

BARTLETT:  Well, David, I think we‘ve already shown our willingness not only to go halfway, but to go almost the complete way by the type of documents we are making available to the United States Senate.

And, remember, it‘s a simple principle.  What Democrats are asking for are documents that are protected, privacy protections for privilege between an attorney and client.  But it‘s also information that the president himself did not even use to make his own judgment, to form his own opinion about Judge Roberts.  So, I don‘t understand why they would need some information that even the president of the United States didn‘t need to make a judgment. 

And they will have ample information, mounds of information that gives keen insight into Judge Roberts as a person, as an attorney, as a judge, and we think it will be plenty of information for them to render a judgment. 

GREGORY:  Any doubt that he gets confirmed, Dan?

BARTLETT:  None. 

GREGORY:  None whatsoever.

Dan Bartlett, White House counselor, thanks very much.

BARTLETT:  You‘re welcome. 

(END VIDEOTAPE)

GREGORY:  And back live at the White House, coming up, we‘ll get reaction from Senators Trent Lott and Bill Nelson. 

And in case you missed it, a HARDBALL special report, “Boots on the Ground: Untold Stories From the Front Line,” will re-air this coming Sunday at 8:00 p.m. Eastern and again at 11:00 p.m.  We talk to top field commanders in Iraq.  And you‘ll hear their stories of war this Sunday night. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

GREGORY:  Coming up, Senate reaction to Majority Leader Bill Frist‘s split with the White House over stem cell research.  Senators Trent Lott and Bill Nelson will join us when HARDBALL returns.

(COMMERCIAL BREAK)

GREGORY:  Welcome back to HARDBALL.  I‘m David Gregory, in for Chris Matthews tonight and reporting from the White House. 

We‘ve been talking about Senate Majority Leader Bill Frist, who today broke with the White House and came out in support of an expansion of stem cell research, embryonic stem cell research. 

Late today, I spoke to Republican Senator Trent Lott of Mississippi and Democratic Senator Bill Nelson of Florida. 

(BEGIN VIDEOTAPE)

GREGORY:  Senator Lott, let me begin with you. 

At the heart of Senator Frist‘s decision today and announcement today is a bigger question about whether or not science, the science of stem cell research, has effectively left the president‘s order of August 2001 in the dust. 

SEN. TRENT LOTT ®, MISSISSIPPI:  Well, perhaps it has. 

I personally came to the conclusion over a year ago that, with very careful legal and ethical limits, that I thought to expand the research stem cell-based, by using these embryo stem cells that are not either going to be adopted or going to be destroyed, to use them to try to help fiend ways to save lives was the right thing to do. 

And I think that—it sounds to me like that‘s where Senator Bill Frist has come to. 

(CROSSTALK)

GREGORY:  So, you support the bill that will come before the Senate, do you not? 

LOTT:  I have reservations about it, because I‘m not sure they have enough of the legal or ethical protections that I would like to see.  But, more than likely, I will vote for it, yes.

GREGORY:  Like what?  What do you want to see that is not there?

LOTT:  I want to make sure—for instance, I would like to stop it at the existing frozen embryos.  I want to make sure that this is not going to be wind up being a deal where they‘re created and harvested, in effect, by doctors or other groups. 

So, I‘d to—there‘s plenty of stem cells in the existing pool.  I would like to draw the line right there.  There is a bill by Senator Hutchison that would do that.  So, I‘m looking all the options.  But this is a very important, very serious matter.  I worry that the Senate really is a little bit—maybe the president—we‘re all struggling to try to understand the science. 

But I think we‘re going to have to deal with this.  And I think it is time that we try to do a little bit more based on the science that we have before us. 

GREGORY:  Senator Nelson, you know the president‘s view on this, which is nothing.  Don‘t move from where he set down the marker, August 9, 2001.  Is he wrong? 

SEN. BILL NELSON (D), FLORIDA:  Well, if you want to have science advance and give hope to people that have all of these terrible kinds of diseases, then what you ought to do is use every means available in the research on these stem cells. 

And the president cuts it off at just—it think it‘s something like 22 stem cell lines now that are only available under the president‘s directive.  So, in that regard, the president—events have overtaken the president‘s decision. 

GREGORY:  Right.  Well, but he—he would argue, of course, the White House would argue he was the first one to actually approve government funding of stem cell research.  And they would make the argument here that this is still such basic science.  So, let‘s wait to see what happens with the existing line before we expand it. 

LOTT:  Let make this point, David.  I‘m not being critical of the president.  I think the president stepped up and tried to address it in a responsible way.  I think that some of what he thought would be made available by that did not materialize. 

It is evolving science.  And I think you need to be careful not to get too far down the line.  I want to make sure that this doesn‘t lead to cloning or all these other very difficult issues.  But, as a pro-life advocate over a 30-year career, I think the pro-life position is to be able to use these very limited stem cells to try to find more solutions to things like juvenile diabetes. 

GREGORY:  Right. 

Senator Nelson, comment?

NELSON:  Look, my mother died of ALS.  This is one of the hopes that we have.  Look, why is Nancy Reagan doing what she‘s doing?  Because there‘s hope that Alzheimer‘s can be cured.  Diabetes, the whole range of things, that, if we will do our research and development, there is no telling what we could do to cure this pestilence on Earth. 

GREGORY:  Let me turn now to the issue of John Bolton, the president‘s choice to be ambassador to the United Nations, blocked for a vote in the Senate. 

Senator Lott, do you think and do you expect the president to recess appoint him? 

LOTT:  It sounds to me like he does plan to give him a recess appointment.  The president has that right under the Constitution. 

I have advised against it.  I think that he was not confirmed.  And, if he went in there, he would be limit to like 17 months.  Perhaps he would not be weakened, but it appears to me that he would.  But I would recommend against a recess appointment. 

GREGORY:  Senator Nelson, the White House makes the argument—

Secretary of State Condoleezza Rice did in an interview yesterday—that the General Assembly meets in September.  There‘s some major work to be done to reform the United Nations.  The administration needs someone in place. 

NELSON:  Indeed, we do.  And we need somebody like a John Negroponte or a John Danforth, someone who the nation can be proud of, not someone who, for example, has done a very poor job in his last job as the arms control negotiator. 

We certainly didn‘t get anywhere under his leadership with regard to North Korea or Iran in the last four years.  I don‘t think he ought to be promoted because he didn‘t do a good job. 

GREGORY:  Senator Nelson, I want to give you the final word on another issue that, of course, is of concern to so many Americans right now.  And that is the space program and specifically the fate of our astronauts on this mission, with this foam incident that‘s happened. 

What are your concerns about the danger for reentry for this crew and do you think it was a mistake for them to launch in the first place? 

NELSON:  Well, thank the good lord.  I think this crew is fine.  There are very few dings on this orbiter, compared to previous flights. 

But NASA has a design problem.  And it has got to be fixed.  And then we can fly again.  And so, yes, the work worked.  They—they stopped a lot less of the shredding coming off of the external tank.  But there is a design flaw that they did not fix, and that has got to be fixed soon. 

GREGORY:  And, Senator Nelson, your views, obviously, as a former astronaut, so important.

Thank you both, Senator Nelson and Senator Lott, for joining us tonight. 

LOTT:  Thank you, David.

NELSON:  Thanks.

(END VIDEOTAPE)

GREGORY:  And when we come back tonight on HARDBALL, the very latest on the London terror investigation.  After dramatic raids today, all four suspects in the attempted bombings are now in custody—the details when HARDBALL returns, only on MSNBC.

(COMMERCIAL BREAK)

GREGORY:  Welcome back to HARDBALL. 

Some major developments in the investigation of the failed July 21 London transit bombings.  British police now say they‘ve arrested four more suspects in those attempted attacks and Italian police say they have picked up a fifth suspect in Rome. 

For the latest, we now go to MSNBC‘s James Hattori standing by in London—James.

JAMES HATTORI, NBC CORRESPONDENT:  Good evening, David.

You know, it was stunningly quick work by law enforcement, just eight days after the bungled bombings here in London.  But, tonight, Scotland Yard has five big reasons to be pleased. 

(BEGIN VIDEOTAPE)

HATTORI (voice-over):  A massive police action just up the road from London‘s trendy Notting Hill, first, a controlled explosion, followed by stun grenades, as elite officers in gas masks clear the building, so quickly there isn‘t time to move two children in a unit below. 

Then police, yelling from outside, coax the men to come out. 

LISA DAVIES, WITNESS:  They are asking him to leave the flats fully undressed or in his underwear.  And then they‘re just—they keep asking him, why is there a reason that you shouldn‘t leave the flat?  Why aren‘t you leaving the flat?

UNIDENTIFIED FEMALE:  He was then saying to them, how do I know that you‘re not going to—you‘re not going to shoot me?  I‘m scared.  How am I going to know that you‘re not going to shoot me?  And he kept repeating that. 

HATTORI:  Residents worry about loved ones still inside the housing complex.  Finally, two men step onto the balcony, still visibly feeling the effects of tear gas and comply with orders to strip to their underwear. 

They identify themselves as Ibrahim Muktar Said and Ramzi Mohammed, two of last week‘s would-be bombers.  Then, 900 miles away, police in Rome arrest another suspect, Hussain Osman.  They now join Yasin Hassan Omar, arrested Wednesday, the round-up of all four suspects wanted in the July 21 attacks complete.  And, NBC News has learned, police also arrested a suspected fifth bomber. 

PETER CLARKE, METROPOLITAN POLICE:  Today has been a day of intense activity.  The investigation continues to develop at great speed. 

HATTORI:  And seems to have been orchestrated all at once. 

STEVE PARK, TERRORISM EXPERT:  If the police are going to make a coordinated attack on these suspects, they would like to do it simultaneously, so that it happened bing, bing, bing. 

(END VIDEOTAPE)

HATTORI:  Tonight, most resident are being let back into this neighborhood, this housing complex where the raid took place.  And they‘re obviously relieved, not only that the raid went off successfully, but that it went off without a single shot being fired—David. 

GREGORY:  James, I understand there‘s still concern, though, that British authorities are talking about with regard to whether there is another cell that may be still operating that may have a connection to this. 

HATTORI:  That‘s been a suspicion all along. 

Obviously, one thing that gives them some concern is that this—one of the suspects was picked up in Rome and that there may be connections between Italy and here.  As you know, Italy has been widely talked about as expecting a—some sort of terrorism attack.  The Scotland Yard spokesman today underscored it in his remarks, saying that he wants people here to remain vigilant. 

And the investigation is still going to expand.  And some reports, 20 or 30 people could be still involved in this action, this investigation—

David.

GREGORY:  James Hattori on the ground for us tonight in London—

James, thanks.

And when we come back on HARDBALL, Ohio is preparing for next week‘s special congressional election.  Yesterday, you recall one of the candidates, Paul Hackett, was on HARDBALL.  He is the first veteran of the Iraq war to run for Congress. 

When we return, we‘re going to talk to his opponent, Republican Jean Schmidt.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

(NEWS BREAK)

GREGORY:  Welcome back to HARDBALL.  I‘m David Gregory, in tonight for Chris Matthews and reporting from the White House.

There is a special election in Ohio next Tuesday.  And Republican Jean Schmidt is hoping to fill the congressional seat vacated by Rob Portman, who left to become U.S. trade representative for the president.  She faces an interesting opponent, however, Paul Hackett, a Democrat with very little political experience, who recently returned from active duty in Iraq.  Jean Hackett, a Marine major and critic of the war now, appeared yesterday on HARDBALL and explained why he accused the president of being a—quote—

“chicken hawk.”

(BEGIN VIDEO CLIP)

PAUL HACKETT (D), OHIO CONGRESSIONAL CANDIDATE:  I respect the office of the president of the United States.  I said those words.  I meant them.  I stand by them.  I would say them again. 

And I‘m—look, I‘m not a career politician.  I‘m a tough-talking, straight-shooting, forward guy.  What you see is what you get.  And one of my heroes, Harry Truman, said, if you can‘t stand the heat, get out of the kitchen.  I‘m taking some heat for it.  I‘m OK with it.  The hits are easy compared to some of things that I‘ve seen in the last year or so. 

(END VIDEO CLIP)

GREGORY:  Republican candidate Jean Schmidt is in Owensville, Ohio, this evening.  And she joins us now. 

Thank you very much.

JEAN SCHMIDT ®, OHIO CONGRESSIONAL CANDIDATE:  Good evening.  How are you? 

GREGORY:  Doing fine. 

Let me ask you about that chicken hawk comment from your challenger.  As people may or may not know, your district, the one that Representative Portman is vacating, is a heavily conservative district.  The president carried it last year by over 60 percent.  Is that all the ammunition you need to use against your opponent?  

SCHMIDT:  Looks like it is.  My folks in this district are calling those fighting words and they‘re fighting back.  And they are going to be there for me on August the 2nd

GREGORY:  Why?  Explain why that is. 

SCHMIDT:  The people of this district like the president.  They like what the president is doing.  And they respect him as a person and for the office that he holds. 

And the people of this district don‘t like it when someone, especially someone in uniform, says words like chicken hawk or says the SOB word, as he said in “USA Today” earlier this week, or when he says that... 

(CROSSTALK)

GREGORY:  He called the president an SOB, but said he would still be willing to die for the guy as a member of the armed forces. 

SCHMIDT:  Well, I think they‘re looking at that as disingenuous. 

They‘re also looking at a man that said the greatest threat to the United States is not Osama bin Laden, but the man in the White House.  And the people out here in southern Ohio, they like this president.  If you look on the map, we were the most crimson of red in Ohio just a few short months ago.  And we‘re still red for our president. 

GREGORY:  Well, let me ask you this, Ms. Schmidt.  Do you think that, in this race, Mr. Hackett start out ahead on the credibility question of Iraq, since he is a veteran, since he was actually there?  Do you dispute that he has got more experience on this issue? 

SCHMIDT:  Well, first, let me speak to the fact of why I‘m here in Owensville tonight.  We are honoring a fallen soldier, Nick Urty (ph), who used to be a 4-Her here at the Clermont County Fair. 

And just a few minutes ago, I left the track where the Owensville Fire Department is dedicating a plaque to the Urty (ph) family and for his service. 

GREGORY:  Right. 

SCHMIDT:  And like all the soldiers that have gone over there, I respect them. 

But the bigger question is, will my opponent‘s views mesh with the views of this district if he goes to D.C.? 

GREGORY:  Right.  But...

(CROSSTALK)

SCHMIDT:  And the answer, quite frankly, is no.  And let me tell you why it‘s no. 

(CROSSTALK)

GREGORY:  Well, hold on one second, because...

(CROSSTALK)

GREGORY:  Hold on.  Hold on, Ms. Schmidt.

There is a question on the floor here.  That is, why doesn‘t he have more credibility on the question of Iraq or military policy as a veteran?  Why doesn‘t he begin this race with a leg up over you, given his veteran status? 

SCHMIDT:  Because he‘s espousing the same liberal Democratic rhetoric as Nancy Pelosi and Ted Kennedy are espousing.  What he is espousing is nothing more unique than the Democratic Party platform.  It is not playing here in the district. 

I respect and honor his service, but I also believe that what the president is doing is right.  So, do the people of the 2nd Congressional District.  We know that we‘re on the right track in Iraq.  And we need to stay the course. 

GREGORY:  Do you think that the president made mistakes in the prosecution of this war? 

SCHMIDT:  Absolutely not.  It‘s more important to fight the enemies of freedom on their shore than on ours; 9/11 was a huge wake-up call.  And it showed America that we are no longer innocent and that the enemies of freedom can come to us in a heartbeat. 

GREGORY:  Right. 

SCHMIDT:  It is important that we continue to fight them over there, so that they don‘t come over here. 

GREGORY:  OK. 

Ms. Schmidt, just a moment ago, you accused your opponent of making the same argument that Nancy Pelosi would make.  What you have just said could have come directly, verbatim, from the president‘s speech?

SCHMIDT:  Well, as I said to you, I believe in what the president is doing.  So do the people of this district. 

(CROSSTALK)

GREGORY:  You don‘t think he made any mistakes?  If you were elected to Congress and you were in a room with the president and the secretary of defense, what would you advise them on how to win this war that we‘re in the middle of? 

SCHMIDT:  I would advise him to listen to the people that are leading us in this effort.  They have the larger picture.  They know what is going on. 

And I would ask him to continue to give our soldiers the tools and training, so that they can best defend us on Iraq soil, instead of on our soil. 

GREGORY:  You don‘t believe...

SCHMIDT:  You know, the best...

GREGORY:  Go ahead. 

SCHMIDT:  The best defense is a good offense.  We need to be over there for the offense, because I don‘t want to play defense over here. 

GREGORY:  You don‘t believe that there‘s any areas of the preparation for war, for instance, the claim that there were weapons of mass destruction in Iraq that proved not to be true, for which this president ought to be accountable? 

SCHMIDT:  You know, the fact of the matter is, there are no weapons of mass destruction.  And we were listening to a thug, Saddam Hussein, who said that there was.  He was not allowing people to go in and inspect.  We called him on it.

And, you know, we‘re now standing with the government, where there won‘t be any weapons of mass destruction and in a country that‘s becoming democratic and where we won‘t have to face a nuclear threat. 

GREGORY:  Right. 

SCHMIDT:  I think that‘s a great thing.  So do the people of the 2nd district. 

GREGORY:  Let me—let me ask you about the 2nd District.  When you talk to people in meetings, as you campaign around this district and around the rural areas outside of Cincinnati, what do people tell you when they express their concerns about this war?

SCHMIDT:  Actually, what the people are talking about are three issues, national security, taxes and tax reform, and a sound energy policy. 

With national security, they want us to stay the course in the war.  They also want stronger border patrols back here.  They‘re concerned about the illegal immigrants that are coming here.  They want it stopped.  They, like me, support the idea of having Minutemen that are empowered, both in New Mexico and Arizona.  They want the president...

(CROSSTALK)

GREGORY:  I‘m asking you about Iraq, Ms. Schmidt.  I‘m asking you about Iraq. 

(CROSSTALK)

GREGORY:  Do they express—do they express apprehension?

(CROSSTALK)

SCHMIDT:  David, David, David...

GREGORY:  I‘m sorry.  I‘m sorry. 

SCHMIDT:  They‘re not talking about it in those terms. 

GREGORY:  OK.

SCHMIDT:  The people of this district are talking about national security in the terms that I‘m talking about to you. 

GREGORY:  Right. 

SCHMIDT:  I‘m here.  I‘ve grown up here.  I‘ve lived here all my life.  I‘m listening to these citizens.  What they‘re saying is, we need to stay the course in the war, bring the soldiers home safely, but not until we have democracy in place over there.  And then they‘re turning around and talking about border patrols, keeping the tax cuts permanent, having a sound energy policy that is both a short-term and a long-term solution. 

These are the things that the people of this district are talking about.  They‘re not solely focused on this war.  Maybe the national media is, but the people right here in southern Ohio are talking about issues that affect them.  They‘re talking about having tax cuts that are permanent, because they want to spend their own money.  They don‘t want government to. 

They want the elimination of the death tax, and so do I.  They want the elimination of the alternative minimum tax, and so do I.  They want the elimination of the capital gains tax, and so do I.  They‘re looking at an energy policy and they are cheering at what the House and the Senate has passed...

GREGORY:  All right. 

SCHMIDT:  ... because it has an ethanol component. 

You‘re talking about southern Ohio.  Southern Ohio grows corn.  And corn is ethanol.  It has a great component to empower the people in the 2nd Congressional District to not only reduce the emissions in the air, to not only reduce the price of gas at the pump, but to allow farmers in this district to make a bigger bang for their buck for the corn that they grow. 

GREGORY:  Ms. Schmidt...

SCHMIDT:  It is a win-win-win. 

GREGORY:  Thank you very much for your views. 

SCHMIDT:  And that‘s what these people are talking about. 

GREGORY:  Thank you, Jean Schmidt, running for Congress in Ohio. 

Thanks very much. 

And when we return...

SCHMIDT:  Thank you so much. 

SCHMIDT:  ... much more on Senator Bill Frist‘s split with the White House over embryonic stem cell research. 

Plus, the latest on the CIA leak investigation and the confirmation hearings for Supreme Court nominee John Roberts, now set to begin on September 6.

This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

GREGORY:  Coming up, how does Senator Frist‘s change of heart on stem cell research impact the politics of the 2008 race?

HARDBALL returns right after this.

(COMMERCIAL BREAK)

GREGORY:  Congress wrapped up a flurry of legislation this week, delivering key victories to President Bush on energy and trade legislation, even as Senate Republican Leader Bill Frist broke this morning from the president on the issue of stem cell research. 

So, where does this leave both ends of Pennsylvania Avenue politically? 

John Fund is with “The Wall Street Journal”‘s OpinionJournal.com.  And Amy Goodman is the host of “Democracy Now” on radio and television and is co-author of the book, “Exception to the Rulers.” 

Welcome to both of you.

AMY GOODMAN, HOST, “DEMOCRACY NOW”:  It‘s good to be with you, David. 

GREGORY:  John, a busy week, and really a notable week of achievement for the White House, as I said to Dan Bartlett earlier in the program.

So, I just have to wonder what the president says when he gets off the phone with Bill Frist last night, after being told that Frist chose today, the end of this notable week, to break with him on stem cell research. 

JOHN FUND, COLUMNIST, “THE WALL STREET JOURNAL”:  Well, I don‘t think the split is quite as dramatic as you think. 

If you go back and read Senator Frist‘s speeches in July 2001, he basically had set out the principles that we should have research on embryonic stem cells that would otherwise be discarded.  Then the president came out with his more limited plan.  And, at the time, it was thought the president would allow research on up to 78 lines.  We now know that‘s been scaled back.  It is much smaller. 

So, now Frist is going back to his original position.  He is breaking with the administration.  But I think it is a soft break, not a hard break.  I think this is a signal that the White House is not going to fight the stem cell bill tooth-and-nail.  Now, what Senator Frist has been able to do with leverage is, he says, we need to have much stronger ethical oversight...

GREGORY:  Right. 

FUND:  ... and much stronger ethical guidelines.  So, Frist is, I think, paving the way for him to be the power broker in this deal, fashioning a bill the president can accept. 

GREGORY:  Amy, why is he doing it now, do you think? 

GOODMAN:  Well, I think this is very interesting. 

I don‘t think Dr. Frist—let‘s remember, he is a medical doctor, the Senate majority leader—has really changed his views.  I agree with John Fund there.  I think what is interesting is that, right now, he feels freer, that there is more space to express that.  And that is because the Republicans are right now desperate because of President Bush‘s position in Iraq.  I really do think this is much more connected to Iraq than—than the senator having a change of heart, and that we‘re not only talking about 2008 and possibly that Frist as a presidential candidate...

GREGORY:  Wait.  Wait.  I‘m sorry.  How is it connected to Iraq? 

GOODMAN:  Because I think, right now, the Republicans are trying to separate themselves at this point of this lame-duck presidency from the Bush administration‘s views on Iraq.  And they feel—they are looking for different spaces. 

And there is a great deal of disillusionment now with President Bush. 

And people feel there‘s more space to disagree with him on these issues.

GREGORY:  Well, that may or may not be the case.  But I would like to stay focused to the issue at hand, because, John, I mean, if you look at where this break actually is, it is not that he‘s changing his previous views.  It is that he is breaking from the White House on what do you going forward, that even where there are unused stem cell lines after fertility treatment that would otherwise be discarded, here‘s Senator Frist, a doctor, saying, no, we need to tap into the potential here. 

The president is saying, no, this is still early science.  Let‘s not go beyond where we are. 

That‘s significant.  Why do you think, as a political matter, he‘s doing it? 

FUND:  Well, I think, for one thing, he gets the advantage of a mini-McCain moment.  He gets the appearance of independence and, you know, being able to strike out on his own. 

And remember, if he‘s going to run for president in 2008, he has obviously is going to have his own separate identity.  But I just have to tell you, you know, I was talking to a lot of members of Congress on Capitol Hill this week.  And the ones that Amy thinks are desperate and trying to distance themselves from the president passed his trade bill, passed his highway bill, passed his energy bill. 

I mean, if this is desperation, the White House probably wants more of it. 

GREGORY:  Amy, you‘ve got to admit, you‘ve got to admit, for a guy who was written off as a lame duck, this was a pretty good week. 

GOODMAN:  Well, I mean, I‘d say, if you look at CAFTA and how, at first, he did not get by and he lost and they extended the session for more people to vote, and even now there are serious questions being raised by people like Congress member Taylor, who said he voted against, but he was counted not present instead.  So, there are very real questions to ask about what happened with the CAFTA vote.

But I do think, right now, that people like Frist are trying to distance themselves, that he did disagree with President Bush in the past on stem cell research, didn‘t express himself at the time.  But, right now, he is expressing himself, because there is so much disaffection with the Bush administration right now. 

GREGORY:  John, go ahead. 

FUND:  Well, I just don‘t see this. 

The president has obviously had some problems with Social Security.  But, look, his nominee for the Supreme Court I predict is going to get 70 votes for confirmation.  That‘s a 10-strike.  And, as for CAFTA, look, it won.  Am I happy with all the arm-twisting and all of the deals that had to be made?  No.  But the legislative process is a sausage factory. 

I have to tell you, this president has had more substantive achievements in the first year of the second term than most presidents. 

GOODMAN:  Listen, I mean, the primary issue right now is the occupation and war in Iraq.  And the United States is losing. 

Just look at this week.  For the first time, you have the U.S.  commander in Iraq, Casey, saying we have to talk about leaving.  You even have Rumsfeld saying we have to talk about leaving, at a time when the troops...

GREGORY:  All right, Amy, just hold that thought for one second.  I want to pick it up.  But we have got to take a break. 

We‘re going to come back with Amy Goodman and John Fund.

And this program note.  Premiering Monday, August 8, at 9:00 p.m., catch Rita Cosby on her brand new show, “RITA COSBY: LIVE & DIRECT,” right here on MSNBC, the biggest stories, the biggest interviews.  That‘s “RITA COSBY: LIVE & DIRECT,” premiering Monday, August 8, at 9:00 Eastern, only on MSNBC.

We‘ll be right back.

(COMMERCIAL BREAK)

GREGORY:  And we‘re back with radio host Amy Goodman and John Fund from OpinionJournal.com. 

John, before the break, Amy was making the point about the war in Iraq.  And for all of the president‘s accomplishments, Congress‘ accomplishments, isn‘t it a fact that, going into next year‘s midterm elections, the question of when our soldiers are coming home is going to loom very large for any congressman on the Republican side looking for reelection? 

FUND:  Certainly.  And you‘re certainly seeing some restlessness among members of Congress.  They want to know exactly if there‘s a timetable, assuming the insurgency can be tamped down.  And already, you‘re tapping the generals, come forward and saying, yes, we probably can remove some troops next year.

The insurgency is an ongoing problem.  But cutting and running or doing anything like that is not going to solve the problem.  It would only embolden our enemies.  And we‘ve seen in London recently what happens when the enemy senses weakness. 

GREGORY:  Amy, your sense is that the legacy, the political legacy, for this president is Iraq and nothing else? 

GOODMAN:  Oh, I mean, absolutely.  And I also think—well, I think there are other issues.  But that is the key one. 

And I think what‘s interesting, in raising the issue of London, is that the polls show overwhelmingly the people of Britain feel that what has happened to them with these terrible bombings is directly related to the occupation of Iraq, Republicans, as well as Democrats, right now in this country.  And I think the Republicans, it is most interesting to watch them. 

People like Walter Jones, the Republican who renamed french fries freedom fries at the congressional cafeteria, are now joining with perhaps the most liberal Congress members, like Kucinich, and demanding a withdrawal from Iraq.  And President Bush is standing firm on the wrong side. 

(CROSSTALK)

GOODMAN:  Here, he is dealing with a losing war in Iraq.  People are afraid to say that.  But that is the truth. 

GREGORY:  All right. 

GOODMAN:  We might soon see 2,000 U.S. soldiers dead in Iraq. 

GREGORY:  All right.  Let me turn to another issue that is a hot political topic.  And that is John Bolton.

John Fund, everyone in this town expects that, as early as next week, the president is going to recess appointment.  Is that a dangerous move politically at a time, when his Supreme Court nominee is going up on the Hill and there‘s other matters to be considered by Congress? 

FUND:  If it were unprecedented, maybe, but every president has made use of the recess appointment.  Bill Clinton did it for Bill Lann Lee, whom he wanted put in as civil rights head at the Justice Department.  So, the senators obviously succeeded in blocking Mr. Bolton from getting a vote, even though everyone agrees he would have had a majority. 

Given those extraordinary circumstance, because it is highly unusual to filibuster a nominee and not even give him a vote, a recess appointment seems to me tit for tat.

GOODMAN:  Well, I think what‘s most interesting here is, Ohio Senator Voinovich, not a Democrat, a Republican, on the Senate, and who is one of those who said—actually cried on the floor of the Senate, fearful that this man, who is all about unilateralism and not about negotiation, in a time when we need this world to come together, fearful that he would be named U.S. ambassador to the United Nations. 

It would be an incredible slap in the face to the Senate.  Talking about unprecedented, it is unprecedented that—well, in the last 12 years, the Senate Judiciary Committee has not put a vote to the floor without recommending that nominee.  And that‘s what they did here, because it was split between the Republicans and the Democrats. 

FUND:  Well, let me just say one other thing that‘s unprecedented, the level of corruption, dishonesty and thievery at the United Nations, which John Bolton at least recognizes and which probably he could help clean up, because, certainly, everyone must agree the United Nations is an ill institution in need of dramatic reform.

(CROSSTALK)

GOODMAN:  John, if we‘re going to talk about dishonesty, what about the fact that Bolton was dishonest when he was asked by Congress whether he had been involved in any investigation?  In fact, it now turns out the State Department said he did not tell the truth, that he has been questioned by the State Department inspector general.

(CROSSTALK)

GREGORY:  He says that he forgot about it.  And he changed his questionnaire today.

I‘ve got less than a minute.  I want to have you both sound off on one final topic, the CIA leak investigation. 

John, is there an October surprise here for this administration when the special prosecutor, Patrick Fitzgerald, is expected to wrap it up, wrap the grand jury investigation up? 

FUND:  Almost everything about this investigation has been misreported.  Yes, there probably will be an October surprise.  And I bet it will be the following.  There may be perjury charges.  And it has nothing to do with undercover—of covering up or revealing an agent‘s identity.  And it may involve some journalists being in some trouble. 

GREGORY:  OK, Amy, I‘ve just got 10 seconds for a comment. 

GOODMAN:  Whatever comes down in terms of indictments, it is absolutely amazing that Karl still roves the White House. 

GREGORY:  OK.

Amy Goodman and John Fund, thanks to both of you for being here. 

GOODMAN:  Thank you. 

GREGORY:  And Chris will be back Monday at 7:00 Eastern for more

HARDBALL. 

Also, don‘t miss the HARDBALL special report “Boots on the Ground:

Untold Stories from the Front Line,” re-airing this coming Sunday at 8:00 p.m. Eastern and again at 11:00 p.m.

Right now, it is time for “COUNTDOWN WITH KEITH OLBERMANN.” 

END

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