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'Hardball with Chris Matthews' for Oct. 19

Read the transcript to the Tuesday show

Guest: Rahm Emanuel, Nancy Giles, Paul Krugman, John Garamendi, John

Ensign, Julie Mason, Chuck Todd, Charlie Cook

CHRIS MATTHEWS, MSNBC HOST:  A war that Bush said would cost $50 billion will cost 20 times that amount, a war that Democrats won by opposing roars on.  Let’s play “hardball.”

Good evening, I’m Chris Matthews.  Welcome to HARBDALL.  Tonight from Philadelphia.  The big story tonight—President Bush is asking Congress for billions more for the war that now could cost a trillion dollars.

Will the Democrats cut him off or once again cave in?  Are the Democrats being held hostage by the president?  We’ll talk to the man who built the Democratic majority in Congress, U.S. Congressman Rahm Emmanuel of Illinois.

In our second story, so why don’t the Democrats do anything about the war?  Most Americans are fed up and want out.  Voters put the Democrats in power, and they can take them out certainly in 2008.

We’ll talk to “New York Times” columnist Paul Krugman.  And commentator Nancy Giles.  Plus, the illegal immigration fight burns hot.  Nevada Senator John Ensign is in the thick of it and working to make sure his party doesn’t lose that war.

And a hot new poll number tonight showing the close race between Hillary Clinton and front-runner Rudy Giuliani, should they go together.  Plus, we’ll have the latest on the wild fires raging across California from the California lieutenant governor.

All that later, but first, President Bush is asking for another $46 billion for the Iraq War on top of the $150 billion already requested for upcoming fiscal year.  This could lead up to a trillion dollars for the war.  At this rate the total cost of the war will exceed $1 trillion, by the time he leaves office.  Will the Democrats bow to the president?  And fork over the money, or will they cut off spending?

Congressman Rahm Emanuel is chairman of the Democratic Caucus.  Congressman, people out there are wondering why did they elect the Democrats to end the war in if the war is still going?

REP. RAHM EMANUEL, (D) DEMOCRATIC CAUCUS CHAIR:  First of all, they elected - first of all, let’s go to the presumption of the question, Chris.  They elected the democrats for a host of reasons, including the war but also to change things that were happening in Washington as it related to their economics.  So there were a host of things that led into this election.  And I’m more than willing, and I don’t think you want to spend the time going through that analysis.  The war was a key piece of it.  So was people’s economic frustration, so was their anger at the way that Washington had gotten corrupt.  So there was a lot that fed into this election.

Second is, you know, the knowledge that you have today about what’s happening.  Yes, the president asked for another $200 billion.  The largest increase, the largest increase ever in his request is the largest request ever.  And yet, we have always said, how can you say that children’s healthcare is excessive spending for 10 million children who don’t have healthcare, whose parents work full time, yet, you’ve asked for $200 billion of more debt for this war, bringing it right now to the total of $800 billion of requests and as you said, well on his way to a trillion dollars.

And we have said just two weeks ago he has another six weeks and he has to produce a report on a plan for how America would leave Iraq.

MATTHEWS:  Well, let me ask you this.  Do you really believe that the number one issue in this country not the war in Iraq?  To you really believe that?

EMANUEL:  That’s not what I said.  You said that was the reason we won the Congress.  I said there were a lot of reasons we won Congress, but number one is Iraq, the number two is healthcare.  Beyond that is also the energy independence.  There are a lot of issues that relate to the challenges that aren’t being answered by this administration.  I said that a lot of things got led into what happened in November because people were tired of what was happening in Washington and they wanted a new direction and a change.  Iraq was prima fascia at number one, but it was not exclusive of other things.

MATTHEWS:  How are changing the direction in Iraq?

EMANUEL:  Well, I just told you, one of the things we did two weeks ago was pass a bill that said specifically if you’ve not going to set a date, you must produce a plan to present to Congress on the beginning of the reduction of the troops in Iraq that—it was a bipartisan, the first bipartisan vote to do that.

Second, all this waste and fraud had gone unreported, undocumented and unenforced.  And as you know, Henry Waxman has done a miraculous job on that committee going through contract after contract on the embassy, you saw today what happened with Dyncorp and other things, basically bringing in and somehow controlling how they basically are spending money.

And then third, the whole notion of having benchmarks.  Of meeting some guideposts, of having some accountability is what Congress is doing.  Now we have to get a policy where the president is absolutely—he does not want any date, any time for a date, to get out.

Democrats are clear that we want a date from the beginning for redeployment to deal with what’s happening in Afghanistan, deal with where al Qaeda is and stop having our policy held hostage in Iraq when the al Qaeda is formulated in Afghanistan and we have got to move resources to dealing with where al Qaeda is.

MATTHEWS:  You say your policy is being held hostage.  It seems to me that was what I was suggesting.  That the president merely has to blackmail you guys and say the minute you try to cut off any spending for this war, which would really be decisive, the minute you do that he’ll say you’re endangering our troops and you guys has to run them.  Doesn’t he have control over the Congress that way?

EMANUEL:  Listen, he does have an impact in trying to say you’re affecting the troops.  We believe putting troops in harm’s way without a strategy for reconciliation, without a political strategy or the hard work on the political and diplomatic front is holding our troops hostage.

Everybody acknowledges including Secretary Gates, the defense secretary, that A, that you can’t solve this militarily alone and B, all we’re doing is military strategy.  We’re putting more and more of the responsibility on our troops and less on the Iraqis to stand up.

What we did, in fact, when we started to talk about meeting benchmarks and started saying that we’re not having a policy that’s just an open wallet and open commitment, even Secretary Gates, the defense secretary, said that was helpful to try to move the Iraqis forward.  What we have gone from, specifically we have said we want a date to start to have the troops home.

They said they wouldn’t accept that.  So we went back and said, OK, we want by X date a plan on how to get the troops home and what it will take to get the troops home.  We have never deviated from the goal of getting our troops now back from Iraq, redeployed into fighting al Qaeda and fighting terrorism.  The road we’ll take to it may be different from the first road we took, but getting to that goal line, we have never deviated from that.

MATTHEWS:  You saw “The Washington Post” today, congressman.  You saw the pictures in color of the young guys and women who have been killed just in the last month.

Is there anything you’re able to do to stop the rain of death for our G.I.s?  Look at the pictures.  I don’t have to tell you about the emotions, you deal with constituents.  I’m just asking you, is there anything you’re able to do in Congress to stop the killing?

EMANUEL:  Well, a couple of things.  First of all, before we get there, you know, outside of my office, and I invite you any time you want, Chris, I have the faces of everybody who’s fallen in both Iraq and Afghanistan.  I put—it’s now close to taking the entire hallway.

So I walk by that on a regular basis.  OK?  I don’t just—it’s not just when “The Washington Post” decides to publish it.  I put it outside my office personally as a testament to their sacrifice and on the floor I have repeatedly led bipartisan one-hours reading every name into the congressional record so their families know that those individuals who have given their life will never be forgotten.  So I have done some personal things beyond just on legislation.

Third, you know, everything that you’re talking about like on this recent request that the president has, on this humvee, the whole discussion of inadequate humvees, of Kevlar vests that were not provided to the guards and reserves that were being sent over there, were all brought up by Democrats.  In fact, the type of stuff they’re talking about finally getting over are things that we brought up that you sent men and women into harm’s way without what they needed.

OK.  So the fact is when it comes to saving lives and trying to make an impact, now, all of it can’t be just get the troops home, but make sure they have the equipment if you’re going to ask them to do that, that our guard and the reserves have the same thing that regular enlistees have.

That was something that Democrats brought and shamed this administration and the Defense Department was moving on and moving faster.  Those have actually protected lives.  Ultimate protection, get the kids out of there and get us redeployed as an—redeployed as an entire country and get us focused on squashing al Qaeda.

MATTHEWS:  Congressman, during the Vietnam debate that went right through the ‘60’s and actually to the beginning of the ‘70’s, the Democratic Congress was very effective in educating the country to the cost of the war.  The Fulbright hearings were very effective.  Ironically, Robert McNamara, the secretary of defense in 1967 commissioned the Pentagon Papers and when they were published, they really did trace the causes of the war in a way that we can understand.  It began the winding down of the war in terms of people’s commitment to that continued fighting.

Now, it seems to me the Democrats don’t do that.  I don’t see a Pentagon Paper as being commissioned.  I don’t see Fulbright hearing, I don’t see Newt Gingrich style special orders at night going against this war.  What about the educational role?

EMANUEL:  Well, first of all, just I think tomorrow is in fact—tomorrow is a hearing by John Spratt in the Budget Committee on an exhaustive take on the full cost of the war and the implications for America from here going forward.  What the administration has set in play.  That’s happening just tomorrow.  OK?  So I would recommend—I don’t know what you’re doing, HARDBALL is doing or what MSNBC is doing, but John Spratt and the Budget Committee is doing exactly that.

Second is—I don’t want to go through all the names of everybody who has done special orders on the cost of war, that has done, and the entire point we have brought home, constantly, specifically on children’s healthcare, and the cost of the war is look at the priorities and choices that the administration has made, $200 billion more for Iraq, cutting $35 billion for kid’s healthcare, saying it’s excessive spending.

The last thing is one of the first bills I introduced, in this Congress when I got elected, six years ago, when I first got elected, called the American Parity Act.  In fact, I have been on the show with you on it when I first introduced it and I introduced it again this Congress.  Which is every dollar you invest in Iraq, reconstruction, hospitals, roads, schools, electricity, you have to do the same here at home so Americans do not feel like they were getting the back-end treatment and we were putting all our resources to Iraq.

And I thought that—not only did I think it was right, but it would show the choices that the administration was making to Americans to do.  Which is part of the fight we’re having with the administration, which is why they want to veto veterans healthcare, they want to veto inspecting all the cargo, the hundred thousand community policing that the president is putting in a position where Americans are taking the back end of the short stick here as it relates to what he’s investing in Iraq.

MATTHEWS:  I’ve been trying to defend the Congress, the Democrat-run Congress on air - no, I have—by trying to point out the fact that even though you have single or double-digit support right now is because Republicans don’t like Democrats and Democrats want this war over with.  That’s why the combination of those negative votes hurt you in job approval.

Now, you’re saying that’s not the reason.  You’re saying that the low number is because of something else?  I think it’s because of the war.  Why do we have the low job approval of Congress?

EMANUEL:  Chris, you made a statement and I’m sorry if I corrected you on your own show, but you made a statement that’s why the people voted Democrats in.  There were a lot of reasons.  I would suggest to you come to the Midwest and you see economic hardship, that has as much to play—people sense a loss of health care, there’s a sense of retirement insecurity, there is job insecurity and income insecurity.  If you’re saying that economic insecurity did not play a role in the election, I would recommend you .

MATTHEWS:  Well, why are people mad at you, then?  Why are the people mad at the Democratic Congress?

EMANUEL:  Because they haven’t seen—Because they want—they want the type of change we’re bringing and they want it faster and more effective.  And I’m as frustrated as them, but the fact is from minimal wage, to more assistance on veterans’ health care to college assistance, to what we’re doing on kid’s health care and the energy independence, they want to see it yesterday.  And I don’t blame them for that sense of impatience.

As you know, I’m quite an impatient person so I can relate to that.


EMANUEL:  But the fact is, yes, they want a change in Iraq and they want that change.  And they want a change in our economic policies in giving people healthcare security.

They want a change to make sure that we have education access for middle-class families.  And I would suggest to you that if all you think is one thing, you’re missing the day to day lives of the American people.  They want an end to the war, and they want a change in policies to make sure their middle class life is available to their children.

If you don’t think what’s possible, I would suggest, I will give you a tour through the industrial Midwest and you will see some pretty frustrated people on the economic side and that’s what they want as much, and on an equal level as a change in the war.  It is change overall, not just on the war and continue the same economic policies.

MATTHEWS:  I just don’t think we can defend the war policy by saying we have other concerns.  It’s clearly the number one concern.

EMANUEL:  Chris, that’s not what I said.  This is the third time and that’s not what I said.  Those are both motivating people to want something.  That is not what I said.  I’m being very clear.  They want a change and an end to the war as being pursued and they want changes out of domestic concerns here at home.

Which is why the kids’ healthcare has resonated so well with the American people.

MATTHEWS:  I must be hearing from different people than you are, but you have a lot of good polling information.  All I ever hear from people is to say why don’t the Democrats end the war, they said they’d do it?  That’s what I keep hearing, but you have a response.

Thank you very much.

EMANUEL:  Thanks, Chris.

MATTHEWS.  U.S. Congressman Rahm Emanuel, chairman of the Democratic Caucus.  So, with President Bush asking for more war funding what are the Democrats going to do about it?  Will they finally stand up to him or continue to be taken hostage by this administration?

And later, U.S. Congressman Pete Stark apologized on the floor for his comments that President Bush is amused when Americans are killed in Iraq.


REP. PETE STARK, (D) CA:  I want to apologize to my—first of all, my colleagues, many of whom I have offended, to the president, his family, to the troops that may have found in my remarks as were suggested in the motion that we just voted on, and I do apologize.


MATTHEWS:  Stark’s apology and the Democrats’ failure to take on the president after Iraq.  Both ahead on HARDBALL.


MATTHEWS:  Welcome back to HARDBALL.  Conventional wisdom says the unpopular war in Iraq creates political danger for the GOP.  The Republicans.  Then why are the Democrats unwilling to stop the war nor do anything about it?

Nancy Giles is a social commentator and Paul Krugman is a “New York Times” columnist and the author of the new book “The Conscience of Liberal”.

Let me go right now to Nancy Giles.  You have written an impassioned essay on this.  What is your feeling about the Democrats and the responsibility they took last fall and they won that largely because of their opposition to the war?

NANCY GILES, CBS SUNDAY MORNING CONTRIBUTOR:  Well, the piece that you refer to that I wrote, I actually did on television on Sunday morning on CBS.

And I have to say to start with that it’s not just my anger at the Democrats but my anger at the entire system.  I think it’s important and I think a lot of Americans don’t realize that when the Democrats were swept into office and they won the majority it was a razor-thin majority, Chris.  And this was after six years of Republican control.  So they have only had nine months to try to—to put into place any of the policies they’re trying to do.

I also think that the scalding that they took when it seemed as though any kind of comments against the war made you seem un-American or unpatriotic really scared the bejeezus out of them and I think they’re taking baby steps since then at getting their voice back.

And what I believe they need to do is replicate the strength that they have been pushing forward, the SCHIP bill with what’s going on in Iraq.  I mean a hundred billion dollars, it’s insane.  I listened to the president’s speech with the military families and the people behind him talking about the money was needed for bullets and body armor.

And I was like, what are you talking about?  You mean—what is going on with the money that has been spent, the waste, the war profiteering that’s been made and the money being taken out of this country and going into what seems like a cesspool where nothing is getting any better.  And there doesn’t seem to be any kind of accounting for it.

Anyway, I mean, I think that you had spoken earlier about the disenchantment that people have with Congress right now.  I think they were under the misconception that the Democrats swept in this huge majority and they had the power to make things happen yet, and the problem is there aren’t enough independent thinking Republicans that are affecting even what their constituents are saying because the poll numbers are there, but most Americans want this war over.  And they’re playing politics and not doing the right thing.

MATTHEWS:  Paula, let me ask you about this.  I have been through this in the Vietnam War and I watched the liberals, Humphrey, etc, benefit from opposition to wars.  But, you know, I have never seen them act.  I see this time Biden, Dodd, Edwards, Hillary, Kerry, every one of them on the Eastern Seaboard, every one of the so-called liberals has supported the war when it mattered.  They keep supporting it.  They keep letting you down. 

I don’t want to sound too radical here, but it seems to me that, every time you bet your money on the establishment, whether it’s center-left or center-right, their main goal is to remain members of the establishment, to stay there.


I mean, look, Rahm Emanuel is half right, your previous guest.  The—the Democrats now have a huge advantage on domestic issues and the trends.  In “Conscience of a Liberal,” I talk about that.  The trends in public opinion, the trends in demography have all worked in their favor. 

And they are doing is, they have been burned badly on national security in the past.  And they can’t—they’re afraid to take on Bush, even though this is a massively unpopular war, because they’re afraid that it will somehow, you know, backfire on them.  It—it goes back. 

You know, they—a lot of the Democrats believe—wrongly, I would argue—but they believe that they were punished for decades for having been right about Vietnam. 


KRUGMAN:  And now they’re afraid.  So, they’re basically trying to keep possession of the ball, and they’re afraid to do anything that might upset things. 

They’re afraid that, one last time, Bush will pull the national security thing on them.  But, no, it’s unforgivable, I would say.  but I don’t think—I think—unfortunately, Emanuel’s calculations are probably right.  Voters will not vote against the Democrats because they failed to end the war, when the Republicans want to expand, want to go out and attack Iran.  It’s not—it’s not actually going to hurt them that much, but it’s deeply disappointing. 

MATTHEWS:  Let me ask you, Nancy.  If a voter goes out—I’m talking about a regular person who goes to vote last November, and they voted...

GILES:  Well, I’m a total regular person, so there you are.


MATTHEWS:  I know.  No, I mean go to vote, and you vote, like, in Virginia, or you voted in Missouri.

GILES:  Right. 

MATTHEWS:  And you voted against the war, so you got somebody like Jim Webb, who is an unusual choice for Virginia.  It’s a pretty conservative state. 

GILES:  Right. 

MATTHEWS:  But it was because of the war, to a large extent.  Or you got rid of Rick Santorum and you got Bob Casey in Pennsylvania. 

What are you supposed to feel when, after all that effort of maybe switching your vote from an established family polls, you voted Democrat because you’re against the war?  Isn’t something supposed to happen? 

GILES:  Well, yes, but, again, I mean, I know I’m repeating myself.  I don’t think most people really, really get that the Democrats are not in the position to really make the changes that need to be made. 

I mean, they need Republican—they need bipartisan help...

MATTHEWS:  No, they don’t.  No, they don’t.

GILES:  ... to do that.  I don’t think they get it. 


MATTHEWS:  Well, I don’t think you get it.  I mean, you don’t need—you don’t need a super-majority.  You need 51 percent to simply say, no more funding. 

GILES:  Well, that’s true.

MATTHEWS:  You simply say, no more funding.

GILES:  Well, I’m not defending any of the Democrats that went ahead and sat back and voted for the war funding.  I think that’s totally wrong. 

But I think most people do get the fact that it’s got to be a partnership.  And this war is not—it’s not a Republican—well, I find it much more of a Republican war than a Democratic war. 


KRUGMAN:  Chris, can I break in here? 

GILES:  Oh, yes.  Please do. 

KRUGMAN:  Because, you know, what happened in Virginia, yes, it was about the war, but it was also about macaca. 

MATTHEWS:  Right. 

KRUGMAN:  And what really happened—and this is why, the Democrats, I think are so cautious, because they see the country changing in a way that works to their advantage.

It was because of the ugly face of racism showed. 


KRUGMAN:  And it doesn’t—and the country, Virginia, won’t stand for that.  And the Democrats are seeing that this is not—this is a country that’s trending their direction and they’re very cautious. 

Again, no excuses.  This is terrible, because Americans are dying while they...


GILES:  That’s right. 


MATTHEWS:  Well, I think both of you are right.  I’m being devil’s advocate, because I do get it, I suppose.

But, you know, it’s frustrating, because General Grant, who has become one of my new heroes, because he really did oppose slavery.  He really did want to do something to change things with Reconstruction after the Civil War.

He said, you never win politically in America by opposing a war.  I mean, that’s a profound statement.  And I wonder if that—if that’s the case...

KRUGMAN:  And especially...


KRUGMAN:  ... especially given that the way they can effectively oppose this war at this point is to cut off funding. 

GILES:  I know.


KRUGMAN:  And that is so easily spun.  You know, they don’t have the votes to just stop the war. 

GILES:  Right. 


KRUGMAN:  They can refuse to pass a funding bill.


KRUGMAN:  And that’s so easily spun against them.  So, I understand their caution.  But—you know, it’s shameful, but I understand it.

GILES:  Paul is totally right.  I know.  He’s right. 

I mean, short of stopping the funding, which could be spun in all kinds of ways to look like we do not support the troops—and I say we because I’m a Democrat.

KRUGMAN:  Right. 


GILES:  But you know what?  I feel like—and I don’t know if Paul would agree—the things that can be done, we need to use the media.  The need to use the media in the same way that the Republicans can...

MATTHEWS:  Thank you. 

GILES:  ... or that the president does. 

I mean, buy time on television.  Get some of the families of those...

MATTHEWS:  I have to go.

GILES:  ... of those writers that, you know, that ended up dying in Iraq, and put them behind you, as they say, stop the money. 



MATTHEWS:  Please, gentleman, lady, I’m sorry.  We’re out of time. 


MATTHEWS:  It’s great to have you.

Please, both of you come back.

Paul Krugman, good luck with “Conscience of a Liberal.”

And, Nancy Giles, it’s great to have you on.

GILES:  Thank you. 

MATTHEWS:  Up next:  Fred Thompson finally weighs in on the Terri Schiavo case again, saying it’s an issue for the family, not the government.  What a statement.  Will conservatives be happy with that answer?  Some will.  In fact, I think most will. 

You’re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Welcome back to HARDBALL.  Time now for some more politics. 

The usually articulate Mitt Romney has registered an odd complaint today. 

Here’s what Romney said—quote—“Just look at what Osam—Barack Obama said just yesterday, Barack Obama calling on radicals, jihadists of all different types, to come together in Iraq.  That is the battlefield.  It’s almost as if the Democratic contenders for president are living in fantasy land.  Their idea for jihad is to retreat, and their idea for the economy is also retreat.  And, in my view, both efforts are wrongheaded.”

Well, if you think you have heard this before, this confusion between Barack and Osama bin Laden, watch this scene from “30 Rock.” 


JANE KRAKOWSKI, ACTRESS:  If the president so serious is about the war on terror, why doesn’t he hunt down and capture Barack Obama before he strikes again?  It’s time for a change, America.  That’s why I’m voting for Osama in 2008. 

Oh, no comeback?  You’re burnt.


MATTHEWS:  The truth is, I have probably made the same slip myself. 

Anyway, Barack Obama himself continues to drive a wedge between front-runner Hillary Clinton and the Democratic Party’s anti-war base.  In a postcard sent to Iowa voters, Obama tacitly hits Hillary for her hawkishness—quote—“While others went along, Obama opposed Bush’s war plans.”

It says on the subject of that recent Senate resolution declaring the Iranian Revolutionary Guard a terrorist organization, the Barack postcard says—quote—“While other Democrats voted for the Kyl-Lieberman amendment, Barack Obama opposed another Bush foreign policy fiasco.”

Will he stand in there with his fight against Hillary?

For her part, Hillary is trying out the victim role that has worked so well in the past.  She told “The Des Moines Register”—quote—“I’m well aware this is pile on.  I used to play touch football with my brothers and my friends, and I am on the bottom and they are piling on.”

Anyway, on the Republican side, Fred Thompson is showing some freedom from the arch deacons of the right.  Last month, you might recall, he ducked questions about the Terri Schiavo case, saying he didn’t know enough about it. 

Well, yesterday, he weighed in on it, evoking his own personal experience with his own daughter Betsy’s death from an accidental drug overdose. 


FRED THOMPSON, REPUBLICAN PRESIDENTIAL CANDIDATE:  I had to make those decisions with the rest of my family.  And I will assure you one thing:  No matter which decision you make, you will never know whether or not you made exactly the right decision.

So, making this into a political football is something that I don’t welcome.  And this will probably be the last time I ever address it.  It should be decided by the family.  The federal government and the state government, too, except for the court system, ought to stay out of these matters as far as I’m concerned.


MATTHEWS:  The government ought to say out of it.  That’s what a lot of people said back when the Republican-controlled Congress held a weekend session to interview in the Schiavo case. 

Well, today, California Democrat Pete Stark went on the floor of the

House of Representatives to apologize for saying that U.S. troops—quote

“get their heads blown off” for the president’s amusement. 

Here he is.


REP. PETE STARK (D), CALIFORNIA:  I want to apologize to my—first of all, my colleagues, many of whom I have offended, to the president, his family, to the troops that may have found in my remarks, as were suggested in the motion that we just voted on.  And I do apologize. 


MATTHEWS:  Finally, a fascinating moment on National Public Radio.  It’s an interview with Bill Clinton in which he talks about Franklin Roosevelt’s relationship with his wife, Eleanor. 

When you listen to it, you can’t help but wonder which presidential couple he is actually talking about. 

Let’s listen.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES:  He and his wife had a very complicated relationship.  They loved each other very much.  They had a bunch of kids, but they had big pockets of estrangement between them that—and pain.  And they—they rendered enormous service to this country because they stuck with what they had in common.  I mean, that’s fascinating to me. 


MATTHEWS:  Well, historians note that Eleanor and Franklin did in fact end their romantic relationship early in their marriage after she discovered his love letters to Lucy Mercer.

As President Clinton put it, fascinating.

Up next:  The governor of New York wants to give illegal immigrants driver’s licenses.  How vulnerable are Democrats on this red-hot issue of illegal immigration? 

Plus, the latest on the wildfires raging out of control in Southern California. 

You’re watching HARDBALL, only on MSNBC.  


MIKE HUCKMAN, CNBC CORRESPONDENT:  I am Mike Huckman with your CNBC “Market Wrap.”

And solid gains today.  The Dow Jones industrials shot up almost 109 points.  The S&P 500 was up 13 points, and the Nasdaq gained 45.

Governor Schwarzenegger tells CNBC’s Scott Cohn the damages and losses from the California wildfires will run into the hundreds of millions of dollars, but he says the state’s economy, he believes, is resilient.  Officials say that, so far, more than 1,300 homes and businesses have been destroyed there. 

After the closing bell, Amazon reported, third-quarter profits quadrupled.  And earnings beat analyst estimates by one penny.  The online retailer also raised its fourth-quarter outlook, but, in after-hours trading, Amazon shares are down 8 percent, after rising—rising more than 10 percent today to a new high. 

And mortgage lender Countrywide Financial is now offering help to homeowners who face those higher loan payments.  It’s offering to refinance or restructure more than $16 billion in adjustable-rate mortgages. 

That’s it from CNBC, American’s business channel—now back to



GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  All of us across this nation are concerned for the families who have lost their homes, and the many families who have been evacuated from their homes.  We send our prayers and thoughts with those who have been affected.  And we send the help of the federal government as well. 


MATTHEWS:  Raging wildfires in California have consumed now more than 1,200 homes and businesses and forced hundreds of thousands of people to flee the area. 

President Bush will visit the fire-damaged region Thursday. 

For an update, we turn to California Lieutenant Governor John Garamendi.

Governor, thank you for joining us. 

Is the federal government doing what it has to do here? 

LIEUTENANT GOVERNOR JOHN GARAMENDI (D), CALIFORNIA:  Well, they’re doing a lot.  And we appreciate what they have done thus far. 

Resources are coming in, the U.S. Forest Service, 70 units from Arizona and Nevada.  And all that’s good.  I have got some doubt about the value of President Bush coming out here. 

That—you know, how many times did he go to New York—to New Orleans, and still made promises, but hasn’t delivered?  We have the Terminator out here, Governor Schwarzenegger, who is doing a good job.  And we will see. 

MATTHEWS:  Do you think it’s public relations, rather than action? 

GARAMENDI:  Of course it’s public relations. 

The action is taking place by the hardworking firefighters, the men and women, the police that are out there on the line, and the community that’s pulling together to support each other.  That’s where the action is taking place. 

And I know—OK, President Bush comes out.  We will be polite.  But, frankly, that’s not the solution.  How about sending our National Guard back from Iraq, so that we have those people available here to help us? 

MATTHEWS:  Let me ask you what you think the situation will be by Thursday, when the president arrives?  Will these fires still be raging? 

GARAMENDI:  We have some indication that the Santa Ana winds are going to die down tomorrow.  If they do, these fires will set down.  They won’t be out for several days, if not for several weeks. 

But we will have less of a blowup that we’re having today and yesterday and the day before.  It’s really all about the winds.  If those winds do die down, then we will see this fire set down.  On the other hand, when the winds die down, it usually turns around from the other direction, and will blow back into areas that haven’t yet burned.  We’re in for a tough situation for several more days.  Thursday is likely to be another tough day.

MATTHEWS:  Do you think the president’s arrival will distract from the efforts to fight the fire? 

GARAMENDI:  Absolutely, no doubt about it. 

The president goes someplace, you have got a huge entourage.  You have got Secret Service all over the place and all the chaos that comes with whatever the president arrives, wherever the president happens to arrive. 

But, listen, what we really need are those firefighters.  We need the equipment.  We need—frankly, we need our troops back from Iraq.  We will get on here.  Whether he comes or not, that’s not really—really the issue.  I just hope that, if he does come, he brings more than he brought to New Orleans. 

MATTHEWS:  OK, thank you.  It’s great having you on, Governor, Lieutenant Governor John Garamendi of the state of California. 

Nevada Senator John Ensign is chairman of the National Republican Senatorial Committee. 

Thank you, Senator Ensign, for coming on the program tonight. 

Do you have any thoughts about the way the federal government is responding?  And your state is getting involved very much in that effort to fight those fires. 

SEN. JOHN ENSIGN ®, NEVADA:  Well, the bottom line, this is not a time to play partisan politics.  It’s a time to solve problems.  Our state is certainly jumping in with both feet.  Our governor is lending a hand out there.  We’re sending volunteers from all over the state of Nevada because we deal with wild fires in Nevada.  You know, they’re normal.  They’re natural, you know, part of the ecosystem out there, just like they are in California. 

And unfortunately, as people have moved into places that normally burn, you’re going to end up with these situations every once in a while.  When those situations happen, it’s time to pull together.  It’s time to show people that we care about each other, get the resources where we need to get them, to save as many homes and as much of the communities that have burned as we possibly can. 

MATTHEWS:  What’s your rating right now on the FEMA response? 

ENSION:  Well, right now it seems to be very aggressive.  And I think that we have learned a lot from natural disasters that have happened.  Obviously, down in the Gulf Coast you have things like hurricanes and I think FEMA has had to learn some hard lessons down there.  In the West, wild fires are nothing new.  And we have had adequate responses in the past and some very heroic people have given their lives in the past.  That’s what’s happening right now. 

You have people on the lines, giving it everything they have.  I think that those people need to be applauded. 

MATTHEWS:  Let me ask you about another hot issue.  It’s not as hot as

this raging fire, but it is political as hell in this country.  No one

knows more than you from the Southwest.  Immigration, it’s hot on call in

radio.  It’s hot on cable.  For some reason, the Congress is split on the

issue to the point where you’re not going to really enforce this country’s

nationality basically.  People come in the country; they stay here.  People

they break the law.  And the Democrats don’t want to touch it; the Democrats are afraid to touch it. 

It seems like nobody wants to get after the issue. 

ENSION:  Well, I think the Congress has failed on this issue.  It is a critical issue to our country, both from an economic perspective and from a national security perspective.  We need to deal with this issue.  We need to secure the borders, but we also need to have an immigration policy that deals with the employment needs of this country.  The current system is broken. 

So we need to secure the borders.  We need to have an employee verification system that uses biometric identification, so we know whether somebody is here legally or not.  We have to deal with the 12 million who are here illegally today.  We cannot ship them home.  What we have to do is make sure that we put them all through a criminal background check.  We make them pay a fee.  But you need to take the amnesty part of it out and prove that the system works, that we are requiring people to learn English, that we are putting incentives in there for them to get a job with health care. 

Five or six or seven years from now, we can deal with the whole issue of Green Cards or whatever.  But for right now, let’s deal with the current problem that exists.  Let’s put politics aside.  That’s what the American people are asking us.  Nobody Republicans, nobody Democrats, whether we’re talking the war, whether we’re talking health care, whether we’re talking immigration, the American people expect us to act in their behalf. 

MATTHEWS:  Do you think there are too many people in this country illegally now to absorb culturally? 

ENSION:  Well, I think—

MATTHEWS:  I mean, right now—if you close the border right now effectively, and only had the people that came up from the south right now, would they be able to become culturated (sic) into an English language culture?  Are you afraid?  In other words, does anybody really want to throw people out who are already here? 

ENSION:  I don’t think we should throw people out that are already here unless they have committed serious crimes.  Those people should have background checks.  But what should happen is we should inculcate people into our culture of what it means to be an American, and teaching those ideals that we have taught to immigrants throughout the history of the United States. 

It’s something special to be an American.  If we moved to Japan, we can never become Japanese.  But if somebody from around the world moves here, they can become an American.  But what we’re losing focus on, Chris, is we’re losing focus for the new folks coming in on what it means to be an American.  We need to re-instill that into our immigration system. 

MATTHEWS:  I have a simple plan, senator.  Tell me if I’m wrong.  Everyone here is here.  Anybody that comes here tomorrow has to go through these checks with real I.D. cares, checkable I.D.  They must be who they say are or they can’t work.  Why don’t you pass that bill tomorrow?  Who would that offend? 

ENSION:  I think that’s a good way to start.  But the 12 million people who are here, we can actually bring them out of the shadows if we make them go through a criminal background check.  We make them pay a fine for what they have done since being here illegally.  We’ll ship home any of them that are serious criminals.  But those who are here, require them to get—to get a job.  They can’t be on any kind of welfare benefits at all. 

I think that if you do that and you take the actual amnesty part, the part that allows them to get a Green Card, take that off the table for now.  Let’s prove that this system of employee verification works, prove that they aren’t here criminals, that they are playing by the rules—and I think if you have a system like that, in five or six years from now, the Americans people would be open to addressing the Green Card issue. 

MATTHEWS:  The way it is now, they don’t trust the Congress.  they don’t the government because they in the end you guys will pander—in the end you’ll give it away and you won’t have teeth in your bill, because you really don’t want to buckle—you know what’s going on, senator, more than anybody. 

ENSION:  Absolutely. 

MATTHEWS:  Thank you very much, Senator John Ensign of Nevada.  Up next, the round table will join us and we’ll look at America’s attitude towards the war in Iraq.  Did President Bush succeed in combining the issue of terrorism and Iraq to the point where people get them confused now?  Plus, a brand new number on the 2008 general election match-up between Hillary and Rudy.  It is very close.  We’re going to see that number for the first time tonight; Hillary versus Rudy in the latest polling. 


MATTHEWS:  Welcome back to HARDBALL.  Time for the round table.  Julie Mason is the White House correspondent for the “Houston Chronicle.”  Chuck Todd is NBC’s own political director.  And Charlie Cook is the publisher of the “Cook Political Report” and an MSNBC News analyst. 

Let’s take a look at this poll, a national poll on immigration.  Nearly half say, require illegal immigrants to reenter legally.  Legally, in other words, go home and come back from wherever you came from.  That’s five points more than those who say we should allow illegal immigrants to simply become citizens by sticking around here. 

That’s not the greatest poll in the world, but it tells you something. 

What does it tell you, Chuck? 

CHUCK TODD, NBC NEWS POLITICAL DIRECTOR:  Look, the one thing that Democrats may not understand about the immigration issue is that this isn’t a left/right issue.  It really is, in some cases, a coast versus the inner heart of this country.  I think you have a lot of people in the Midwest who are just now seeing Hispanic immigration, and it’s becoming a culture clash there, the way it was in, for instance, Florida 25 years ago, or in California 30 years ago. 

I think you’re seeing—literally, growing up in Florida, I feel like I’m seeing the same debates raging on in the Midwest now about Hispanic immigration that we saw 25 years ago of Cuban immigration in South Florida. 

MATTHEWS:  Julie, you represent a newspaper from Houston, but is this not an issue that’s growing?  I see it showing up in that Massachusetts vote in that special Congressional election the other day, where the Republican got almost half the votes by opposing illegal immigration. 

JULIE MASON, “THE HOUSTON CHRONICLE”:  You’re right, Chris.  That Nicky Tsongas win was very narrow.  Immigration became a huge issue in Massachusetts, my home state.  But I think Chuck is absolutely right.  This issue, you can’t just say well, Republicans think this way and Democrats think this way and we’ll just proceed from there.  You know, you see how it played out with Bush in his own party.  They were totally against what he was proposing.  So it defies easy solutions.  We are clearly seeing that. 

MATTHEWS:  Charlie, your view of this as an—we call these voting issues, issues that people vote on singly (sic).  Will this be one of them? 


got an opinion on immigration.  And I think that poll was, what, 93, 94

percent thought one thing or the other.  But the thing is having an opinion

and feeling passionate, feeling really fervent, where it is a voting issue

is two different things.  Only about one in three voters really feel

strongly about this issue.  You have pockets on each side, so that it’s not

you know, once you get outside of the Republican base, and you get outside of among Hispanic, this is not terribly a strong voting issue.  But among those people, it really is very, very strong. 

MATTHEWS:  Well, isn’t it a big issue in small towns, where all of a sudden there’s a big influx of people from the south?  I’m thinking of the poorer areas of Massachusetts.  You go to places like Worcester, Massachusetts, where you have inexpensive housing.  That’s a tremendous magnet to people coming to this country with no money.  You go to an area where you can get a house pretty cheap and live in a house your first time here.  And all of a sudden, the neighbor changes dramatically.  Isn’t that an issue? 

COOK:  Sure, Chris, you’ve got small towns in Arkansas where suddenly huge influx—like Dequane (ph), Arkansas, huge influx of Hispanics coming in to work in chicken processing plants.  These are places where, other than the model cars coming to the dealerships ever fall and the movies change at the theater—these are towns that haven’t seen a lot of change and suddenly it’s a lot.  It’s very threatening. 

MATTHEWS:  Let’s take a look at this new CBS poll.  They found an upswing since July—that’s a couple months ago—in how many people think the U.S. should confront countries in the Middle East that support terror.  This is very pro-Bush.  But what do you make of these numbers?  It shows that people are about evenly matched, in fact, slightly more say now, as opposed to a couple of months ago, take on the countries that are dangerous?  Chuck? 

TODD:  Look, I think part of this is that you had the political debate in the fall on Iraq was won by the Republicans in Congress and the president and the White House.  And then you’re seeing a ramping up of the rhetoric with Iran.  And I think the combination of those two things has started, and you don’t have a unified message—anti-war message anymore on the left.  It’s very muddled among the Democrats. 

So I think, lacking that, that’s why maybe the president’s message is winning out here a little bit. 

MATTHEWS:  I think so, Julie.  That’s what I think; the president has made his case over and over again.  The supporters for the war, the hawks, have made it over and over again.  I don’t care what Rahm Emanuel said on this show earlier tonight, I do not hear a loud voice from the Democrats saying this war is wrong. 

MASON:  You’re right, Chris.  I agree with Rahm.  The thing is that Bush is out there saying it and it’s the Karen Hughes principal.  If you repeat it often enough, it becomes the truth.  And Bush and Cheney are both out there saying this is the next front in the war on terrorism.  There’s no counter-message to that.  That’s why it’s getting through.  People are believing it. 

MATTHEWS:  It may not be the big lie, but it’s the big sale.  We’ll be right back with the round table, Charlie Cook’s brand new number, by the way, on this match-up with Hillary and Rudy. 

We’ll check in on Charlie Cook, the world’s expert on elections, and see what he thinks about Rudy Giuliani’s chances to actually get in this playoff.  We’ll be right back with HARDBALL.


MATTHEWS:  If you love politics, you’re go love this number.  It’s a brand new number released by Charlie Cook tonight.  It shows Hillary Clinton ahead of Rudy Giuliani by four points right now, with a three percent margin of error, both directions.  Charlie, interpret that number.  You’re a great poll interpreter.  What does that really tell you? 

COOK:  Well, it was very interesting; you look at the first four months of this year and Clinton was behind all the—well, behind Giuliani every single poll, behind McCain who was already dropping half the time.  Now, it’s been July since she has been behind Giuliani, mid June since she was behind McCain.  And I think what’s happening is that Hillary Clinton is not becoming more likable.  I think she’s getting less unacceptable, that she’s sort of wearing down the opposition.  There’s almost like a resignation—

MATTHEWS:  Can she reach 50 percent?  Can she ever reach 50 percent nationwide? 

COOK:  I think if she were a stock, she would have narrow trading range, and the very top of that trading range might be 50.  But it would be more like 46 to 50. 

MATTHEWS:  You’re unbelievable, Charlie.  That is a—Chuck, come in on this, because you’re our director here.  Does that tell you that—I have a poll from Zogby that says 51 percent will never vote for Hillary in the general, 42 percent of women will never voter for her.  Does she have a low ceiling, even though she can win the nomination fights. 

TODD:  Let’s not forget, a majority of men wouldn’t vote for any Democratic nominee these days.  So let’s not get too carried away with that.  I think she can get 50.  Jimmy Carter got 50, why can’t she?  That’s what type of environment this is.  This is like 76.  It’s an anybody, change the—but can she get more than 50, 51, 52?  It’s highly unlikely.  In a two-way.  If she got 52-48, that would be considered a close election and yet also an electoral land slide. 

MATTHEWS:  Julie, I think they’re going to skunk Hillary the way they did Dukakis back in 1988.  They’re going to say, we want change but not this one, baby. 

MASON:  It’s true, and if you look at that Gallup poll, Chris, and you see Giuliani’s approval ratings dropping 15 percent, you know, every few months, that’s kind of part of the answer, too. 

MATTHEWS:  OK, I still bet on Giuliani to be the toughest competitor of Hillary.  I expect that to be a nail biter, the debate to be the greatest show in history!  We don’t know who is going to sweat.  Anyway, thank you Chuck Todd.  Thank you, Julie Mason.  Charlie Cook, you’re a changed man. 

Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now it’s time for “TUCKER.”

Hundreds of square miles of wildfire fueled by strong desert dry winds continue to burn virtually unabated this afternoon across southern California. 

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