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'Hardball with Chris Matthews' for Friday, September 3rd, 2010

Guests: Hampton Pearson, Larry Sabato, Susan Page, Sam Stein, Steve Kornacki, Donna Edwards, John Yarmuth, Bernard Charbonnet


Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews in Washington. 

Leading off tonight: Democrats starting to play hardball.  To avoid disaster in November, Democrats are going to have to get tough.  They‘re going to have to punch back.  They‘re going to have to nail their opponents with the same hard shots the Republicans and the Tea Parties have been using against them. 

That means going negative.  It means brutally pointed, honest, devastating negative ads.  As one strategist put it, anyone who spends money on a positive ad may as well give the money to charity.  Well, the Democrats are finally getting tough, and that‘s our top story tonight.

Plus, what scares you?  What‘s to fear if the Republicans grab control of the Congress, a push to starve the health care bill, another government shutdown in order to shift spending power to the Congress, a relentless campaign to take down President Obama?  Listen tonight to what the Republicans themselves are offering up.

Also, we got a glimmer of good economic news this morning.  The jobless rate ticked up a tenth of a point to 9.6 percent -- 9.6 -- and 54,000 jobs were lost overall because of the temporary Census Bureau jobs coming to an end, but the private sector added 67,000 new jobs, higher than expected.  And that offers hope that things are getting better in the real economic world out there.

Still, some Democrats are becoming quite worried about ending those Bush tax cuts for even the top brackets.  We‘ll look into that retreat.  Now, there‘s some have retreated—not all the Democrats, certainly, but some of them are starting to get very wary of spending the time between now and election day bringing back the higher rates for even the richest Americans.

And if there were already enough reasons to be angry with BP—and there are a lot of them—now the oil giant is saying to Congress if Congress cuts down its ability to drill in deep water, BP may not be able to pay what it‘s promised to pay in damages to those people who got hurt down there.  Big surprise?  Not really.

Finally, “Let Me Finish” tonight by telling you the pair of people I think President Obama needs to put into his administration at the highest level to turn things around and really make things work.

Let‘s start with the Democrats playing hardball.  Larry Sabato is a professor at the Center for Politics at the fabulous University of Virginia, and Susan Page is the Washington bureau chief of “USA Today.”  It‘s not fabulous just because of you, Larry, but it is one hell of a school.

Here are Larry‘s numbers.  They were out the other day.  I want to

start with your thoughts and your predictions.  Currently, 47 House seats

go Republican, a shift enough—enough of a shift to give power to the

Republicans.  Eight or nine pick-ups of the Senate seats they need to win -

the 10 they need to win won‘t quite make it yet, although I think he‘s offering up that possibility.  A net gain of eight governors going to the Republican side.  So a very, very big win for the Republican Party, but not a complete shutout yet, apparently.

And a new “USA Today” Gallup poll in your paper says it finds voters prefer a Republican candidate across the country by 49 percent to 43 percent, which should be enough of a percentage, 6-point difference, to give them control, as well.

Let me start with Larry Sabato, but just to let you capsulize your current prediction.  What is it?

LARRY SABATO, CENTER FOR POLITICS, UNIVERSITY OF VIRGINIA:  It‘s exactly what you suggested there, Chris, Republicans taking over the House not by an enormous margin, but by a decent margin, having a chance to take over the Senate, but not yet.  It‘s not there yet and may never be.

Their biggest advantage, I think, and probably their greatest breakthrough will be at the state level, where they‘ll not only pick up at least eight governorships out of the 37 on the ballot net, they‘ll probably pick up 300 to 500 state legislative seats.  And that means they will take control of an additional 8 to 12 state legislative chambers, all of that critical for the 2011 redistricting process.

MATTHEWS:  Susan, in your reporting, first of all, do you find those predictions in line with a lot of other predictions, or is he far out front there in terms of how bad it‘s going to get?

SUSAN PAGE, “USA TODAY”:  Well, he‘s a little further out front, I think, on the House side, but everybody‘s moving in that direction.


PAGE:  I think all the highly respected independent prognosticators are saying the House is gone, the Senate not quite yet—


PAGE:  -- but not—not—

MATTHEWS:  Let‘s go to the fight right now.  Excuse me.  Let‘s go to the fight now right.  This is what‘s going on.  Here are the toughest ads out there.  They‘re all over the place and they‘re all getting very tough.  This is the Democrats going after Republicans.  Let‘s take a look at this. 

Here‘s Robin Carnahan out there in Missouri, her ad hitting Roy Blunt.  Here‘s a long-time Republican leader in Congress.  Here‘s a case where a Democrat gets to run against a Washington insider big shot, one of those rare moments where the Democrat gets to be the outsider in a race.  Let‘s listen to what she‘s saying.


UNIDENTIFIED MALE:  Congressman Roy Blunt—he got caught trying to insert a secret deal for tobacco giant Phillip Morris into a bill just days after company executives gave him $30,000.  He voted to weaken the rules on lobbyist gifts, rode corporate jets provided by a defense contractor convicted of bribery.  And he‘s taken more money from lobbyists than any member of Congress.  Roy Blunt, he‘s the very worst in Washington.


MATTHEWS:  Get the picture?


MATTHEWS:  Let‘s go to Joe Sestak.  He was on last night, the Democrat in Pennsylvania, the congressman and former admiral.  Here he is going after Pat Toomey, his Club for Growth conservative opponent up in Pennsylvania.  Let‘s listen.


UNIDENTIFIED MALE:  Do you think corporations pay their fair share? 

Pat Toomey thinks corporations shouldn‘t pay any taxes.

REP. PAT TOOMEY (R-PA), SENATE CANDIDATE:  Let‘s not tax corporations. 

I think the solution is to eliminate corporate taxes altogether.

UNIDENTIFIED MALE:  The middle class is struggling, but Toomey thinks it‘s oil companies and Wall Street banks who should pay no taxes, zero.  No wonder Toomey‘s been called Wall Street‘s congressman.

TOOMEY:  The solution is to eliminate corporate taxes altogether.

UNIDENTIFIED MALE:  Pat Toomey, he‘s for them, not for us.


MATTHEWS:  You know, I think that‘s a pretty straight ad, Larry.  And I think they‘re using the opponent‘s words.  He‘s a real clear arch-conservative on economic issues, a real Club for Growther.  And I think it‘s fair to say to the Pennsylvania voters, Do you really want somebody this far over as your senator?  Larry?

SABATO:  Look, I have no problem with that at all.  That‘s factual, Chris.  I have no problem with any negative ad or contrast ad that is factual, that uses the words, not taken out of context, of the opponent.

Look, Chris, here is what Democrats have to do.  They‘re faced with a situation where they can‘t go to the voters and say, Hey, everything‘s hunky-dory.  Isn‘t it terrific?  Happy days are here again.  Reelect me.  Instead, they have to go to the voters and say, I know you‘re unhappy.  I know you want change.  But look at this other candidate.  You don‘t want that kind of change.  You dirty up your opponent.  That‘s what these candidates are doing.  That‘s what they have to do.

MATTHEWS:  If you do this, is there a risk?  I‘m worrying for the Democrats here, worrying for them, if—because I‘ve seen this happen before.  If you say to somebody who‘s unhappy with the way things are, yes, but this guy, this person‘s even worse, you‘re basically saying that you don‘t have a choice.

PAGE:  And you know, the problem—

MATTHEWS:  And they might get ticked at you.

PAGE:  The problem with doing negative ads like this, if you‘re a Democrat, is that it‘s not that voters are so in love with the Republican Party or Republican—

MATTHEWS:  Your polling is showing that.

PAGE:  Here‘s this—our polling shows that more so than in previous big change elections, like 1994 and 2006, people are just against the party in power.  They‘re not enamored with the other side.  So that means you‘re not telling them something they don‘t know when you criticize the Republicans.


PAGE:  You‘re just reinforcing—

MATTHEWS:  So you‘re just reminding them you don‘t like either side. 

You may not—maybe you‘re more afraid than you are angry.

PAGE:  You may drive down some people from voting.  But we know that people who are really energized this year are the people who are on the right, who are the Tea Party types.  We know they‘re going to turn out.

MATTHEWS:  It seems like in all these ads, they‘re either blaming—he‘s saying, Look, don‘t blame the government, blame Wall Street.  Don‘t blame the government, blame these rich guys, these fanatical—what do you call them—ideologues.

Here‘s a good set of ads.  These are ads all nailing Republican challengers, Sharron Angle, who‘s pretty far out there, in Nevada, Richard Burr in North Carolina, and Meg Whitman out in California.  Let‘s listen to this barrage of ads against the Rs.  Let‘s listen.


UNIDENTIFIED MALE:  Sharron Angle opposes extending unemployment benefits.

SHARRON ANGLE (R-NV), SENATE CANDIDATE:  No, I wouldn‘t have voted for unemployment extensions.

UNIDENTIFIED MALE:  She says laid-off workers are spoiled.

ANGLE:  We really have spoiled our citizenry.  They want to be dependent on the government.  I‘m not spoiled, and I don‘t want to be dependent on anybody.

UNIDENTIFIED MALE:  We pulled one out of the water this morning, completely covered in oil.

UNIDENTIFIED FEMALE:  Oh, he‘s covered!

UNIDENTIFIED MALE:  Named Senator Richard Burr.

UNIDENTIFIED MALE:  Senator Burr‘s record is a little oily.  Big oil has showered him with hundreds of thousands in campaign cash.

UNIDENTIFIED FEMALE:  For billionaire CEOs like Meg Whitman, money makes life‘s little problems disappear.  Whitman was sued for age discrimination and paid big bucks to settle the case.


MATTHEWS:  Wow.  Where do I begin there?  I like the Angle ad because I really do think she‘s a far-out fringie, and I don‘t think it‘s hard to find her words which will hurt her.  Again, Larry, it seems like that‘s the honest ad.  These others deal with satire and lampoonery, and I‘m not sure they work as well.  Your thoughts?

SABATO:  Yes, no, I agree with you entirely.  That Angle ad absolutely did work because, again, it‘s her own words, it‘s her own positions.  Chris, you know this because you talk to some of the same people.  Senior Republican leaders would love to make one particular contribution to Sharron Angle.  They want to buy her a one-way ticket to Bermuda—


SABATO:  -- coming back November 3rd, the day after the election.  The less she says, the less she‘s seen, the better chance she has of winning because of the Republican wave.

MATTHEWS:  What are they going to do if they find her in the United States Senate, sitting there and talking and really believing she‘s a grown-up U.S. senator—

PAGE:  You know—

MATTHEWS:  -- with a right to speak?  Are they going to gag her?

PAGE:  Mitch McConnell could end up with a caucus that looks very difficult to manage with Sharron Angle in it and Mike Castle in it.  I mean, find the common ground—

MATTHEWS:  This is going to be the bar in “Star Wars”!


MATTHEWS:  I mean, I—this is going to be a strange, motley crew of people there!  My God!

PAGE:  It is the one hope of Democrats in some races, like—


PAGE:  -- Senator Reid‘s race in Nevada, that these candidates that have been nominated in Republican primaries are vulnerable to—

MATTHEWS:  Well, he figured—he figured that one himself, didn‘t he?

PAGE:  Yes.

MATTHEWS:  Didn‘t he jigger it so that Sue Lowden wouldn‘t run against him—

PAGE:  And is his—

MATTHEWS:  -- the former anchorwoman, wasn‘t going to be able to take him on?

PAGE:  Is it enough, do you think?

MATTHEWS:  Well, I don‘t know.

PAGE:  To reelect Harry Reid?

MATTHEWS:  I think he‘s got a tough reelection.  I think—I‘m looking at these numbers, like all of you, and I don‘t see a whole lot of movement, Larry.  And we all look at the numbers.  When I see him tagging Sharron Angle as a whack job again and again—and she may well be a whack job, but I wonder how voters really get (INAUDIBLE) I remember when they voted for that guy with the tam o‘shanter out in California to knock out Tunney, remember?


MATTHEWS:  They knew the guy was a little off.  I saw the 19 percent of this country that voted for Ross Perot after he was certified as nuts, the 19 percent, they wanted to stick it to the—right?  So sometimes, people do vote a little—

SABATO:  Chris—

MATTHEWS:  -- irrationally out of anger.  That‘s what I‘m thinking.  The Democrats got to be careful of the crazy voter, it seems.  Your thought?  I‘m sorry.

SABATO:  Yes, Chris, I‘ll make a long distance prediction for you.  The long distance prediction for you is this is another class of ‘80 in the U.S. Senate—in other words, a lot of one-termers.  So enjoy the six years.  You know, they get some pension out of it.  They‘re going to say a lot of very interesting things on the floor of the Senate.  And if there are friends of Mitch McConnell out there, get him a Christmas gift early, a case of extra strength Excedrin.  That‘s what he needs.

MATTHEWS:  Well—well, they‘re going to—when they pick up that rock, they‘re going to see a lot of bug life under there!  Anyway—the American voter.  Thank you, Susan.  You got a good heart.  Everybody have a nice Labor Day weekend.  I hope that doesn‘t sound partisan.  Do Republicans celebrate Labor Day?  Anyway, what—I guess they do in a perverse way!


MATTHEWS:  Coming up: What will happen if Republicans win control of Congress in two months?  Could it lead to a government shakedown—shutdown?  By the way, I think people have to really think through—if the Democrats lose the Congress, the House really becomes Republican and the government of the United States, the taxing authority, the regulatory authority, the trade authority, the subpoena power, everything is in the hands of the Republican government.

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Well, Mr. President, forget about swing states, you may have to focus on your own home state of Illinois.  A new poll shows Democrat Alexi Giannoulias and Republican Mark Kirk are running neck and neck for that Senate seat you once held.  And the Tribune/WGN TV out there poll shows them tied at 34 percent.  Now, look at those numbers, so low, only 34 percent each.  Where are the rest of the voters?  Ten percent are planning to vote for third-party candidates, 22 percent are still at this point undecided.  That race could go either way.  You got to wonder why Giannoulias hasn‘t really broken away.

We‘ll be right back.


MATTHEWS:  Welcome back to HARDBALL.  So what can we expect if the Republicans do, as many expect, take over the House of Representatives?  They‘re promising to defund the health care bill the president got passed this year, and some Republicans are even talking up using a government shutdown to get their control of spending.  But will these actions put them on the winning side politically?

Steve Kornacki is the news editor for Salon and Sam Stein is the senior political writer for The Huffington Post.

Sam, I want to ask you, this issue has got to be clarified to the public.  I think when people go in to vote, the first instinct of a lot of voters will be, Damn it, I‘m mad.  I‘m voting no, voting against the Democrats, voting against all the incumbents.  I think we have to elevate that a little bit (INAUDIBLE) Your thoughts?  If the Republicans get control of the House of Representatives, the way I explained it last night is they get control of spending, they get control of taxation policy, trade policy, they get the subpoena, they get  awesome power, they get oversight over these regulatory bodies.  They can loosen up on oil, loosen up on Wall Street, do a lot of things.


MATTHEWS:  What do you think is the most important thing they‘ll do that the voters should know about if they‘re going to vote Republican or Democrat?

STEIN:  Two things.  I think one is subpoena power.  I think you‘re going to see a slew of investigations launched.  I think Darrell Issa, the congressman, who‘s now on the oversight committee—

MATTHEWS:  Why should the average person care about investigations?

STEIN:  Because it will—it will essentially slow down the pace of government.  You‘ll go through what was—you know (INAUDIBLE) defined the Clinton years, which is a lot of dragging mud through—dragging mud under (ph) these politicians, opening up investigations into the Sestak matter, whether there was vote trading there, a lot of drama.  Now, maybe they want the drama, but who knows.

The second thing is, of course, the power of the purse.  And one thing that we see now as being pledged by the GOP is that the way to defund health care is not to repeal the law, but to stop the money going to it.  And so what you might be able to expect is that next year, they don‘t pass money to pay for the health care legislation, in which case you have a real game of chicken between the president and the Republicans in Congress.

MATTHEWS:  OK, let‘s take a look at Eric Cantor.  He‘s a smart guy. 

He‘s majority—well, he could be—well, there‘s a slip!

STEIN:  Uh-oh!

MATTHEWS:  He could be majority whip very soon.  He‘s from Virginia.  He‘s a smart guy.  Here he is talking about health care and what they‘ll do to it if the party wins—their party wins control of Congress.  Let‘s listen.


LAURA INGRAHAM, RADIO TALK SHOW HOST:  Will you pledge, Congressman, if you are House majority leader, to see to it that a bill is brought to the floor of the House of Representatives to immediately repeal “Obama-care”?  Will you pledge to do that tonight?

REP. ERIC CANTOR (R-VA), HOUSE MINORITY WHIP:  Listen, without measuring any drapes about what position I will be or won‘t be, if I‘m in a position to make that difference, absolutely, I will pledge to do that.  Are you kidding?  Of course!

INGRAHAM:  If you‘re House majority leader, you will push for the bill immediately to repeal this.

CANTOR:  Yes.  Yes!  Yes!  Yes!  I don‘t see how you ever thought I wouldn‘t be for doing that!  Now, come on!



MATTHEWS:  God, that‘s like an East German interrogation!  Let me go to Steve Kornacki. I thought I was watching the lives of others there for a minute, as she drills these people and (INAUDIBLE) She‘s toughening up Eric Cantor.  That‘s my friend, Laura Ingraham.  Pretty tough talk there.  But he ended up saying what she wanted him to say, We will stop the spending, We will shut down the government, if we have to, I believe, for health care.  Your thoughts on that, Steve.

STEVE KORNACKI, SALON.COM:  Yes.  Well, I mean, I think you‘re seeing what fundamentally could be the difference between, you know, 1995, the last time you had Republicans running the House and the—you know, coming in after the ‘94 election, running the House and the Senate against a Democratic White House.  And what happened that year is they played the game of chicken you‘re talking about, Newt Gingrich versus Bill Clinton. 

They shut the government down over the Republican demand of Medicare cuts -


MATTHEWS:  OK, so they closed down the Smithsonian for two or three days.  They turned the lights out in the Capitol.  The average person watching right now is, We can save a few bucks that way.  Let‘s move on to what‘s really scary.  So what?  A lot of independent voters say, So what?

KORNACKI:  Well, what happened in 1995, and I think will happen again, is they didn‘t say, So what, because it seemed very radical to people.  And people are very unnerved by anything they perceive as radical.  And what happened then was Newt Gingrich basically sold the conservative revolutionaries out, and he cut a deal with Bill Clinton.  He reluctantly brought the conservatives along, and they reopened the government.  They lost.

But I think what you‘re seeing in that Fox News interview you‘re just showing is how different the climate is for Republicans now.


KORNACKI:  The Tea Party movement to me is the conservative Republican base calling the bluff of the Republicans in Washington, who for years have talked about lowering the size of government, cutting taxes and all those things, but haven‘t delivered.  They‘ve cut the deal that Gingrich cut in the end.  They‘ve always done that for the last 30 years.  The Fox News crowd, the Tea Party crowd, they want to see to it that that deal doesn‘t get cut next year.  And boy, I think it‘s a very dangerous position for Republicans, potentially.

MATTHEWS:  So they‘re going to turn them all into Murkowskis and Bob Bennetts and throw them out like Inglis.  If you don‘t do what the Tea Partiers want you to do, meaning bring bloody hell to the government of the United States, you‘re out. 

STEIN:  Yes.  And I think—

MATTHEWS:  They want it shut down, basically.

STEIN:  They do.

And—and Jim DeMint was interviewed by “The National Review.”  and he basically said, you know, we expect these people who were expected to vote why—on the principles they were elected -- 


MATTHEWS:  He‘s the raw seat of the hurricane, that guy.

STEIN:  Yes. 

MATTHEWS:  Let‘s take a look at Republican Senate candidate Joe Miller.  This guy is a real Tea Partier, very smart guy, apparently.  Let‘s take a look at him.

He talks about supporting—he‘s saying it right up front—I‘m going to support a government shutdown—I believe.  Let‘s listen to him. 


UNIDENTIFIED MALE:  But, out of the gate, Joe, what do you start with? 

Health care? 

JOE MILLER ®, ALASKA SENATORIAL CANDIDATE:  Oh, absolutely.  Defund it.  I mean, a repeal would be perfect, but obviously that would get vetoed.  So, defund everything.  Get rid of the socialist aspects of government, not just in health care, but the other entitlement areas that are driving us into insolvency. 

UNIDENTIFIED MALE:  Of course, you‘re going to have a—you‘re going to have a president who is going to veto anything, if there‘s a Republican Congress, that the Republican Congress tries to enact. 

MILLER:  Well, you have got to fund it.  And the Congress has to has an affirmative vote to do it.  So, that‘s a good start point.

UNIDENTIFIED MALE:  So, starve them—starve them of the funds, starve the beast, so to speak?

MILLER:  And absolutely, and have the courage to shut down the government if we have to. 


MATTHEWS:  Steve, that‘s not an unsophisticated voice.  That is a person who knows what he‘s talking about.  That sounds like one of old writers for “The National Review,” a smart conservative who knows what he wants.  He‘s an ideologue.  He‘s out to stop the way things are going. 

KORNACKI:  And this is what I think—let‘s say the Republicans have the Senate next year.

Let‘s say Mitch McConnell is the majority leader of the Senate, and the Joe Millers in the Republican Caucus, on the Republican side, are pushing for this.  What‘s going to happen?  You are going to have the Joe Miller half of a—part of the caucus, the Tea Party crowd that wants the shutdown, wants no compromise, no surrender ever. 

But you‘re also going to have Scott Brown from Massachusetts, Mark Kirk maybe from Illinois, Mike Castle even from Delaware.  These are the guys that are going to get pretty nervous pretty fast when the public start turning on them, which I really believe they will. 

And with the Tea Party wing of the Republican Caucus not wanting to compromise at all, what does a guy like Mitch McConnell do in that situation?  Public relations wise, it‘s a disaster for him.


MATTHEWS:  I always love the image of the French and Indian War, my favorite war, where you have on one side the very posh British and the Redcoats, and, on the other side, the very posh French—


STEIN:  Yes. 

MATTHEWS:  But they had the Iroquois on their side. 


MATTHEWS:  And they would have battles in which the rules were not exactly the Marquis of Queensbury rules, the way they fought. 

STEIN:  Sure.

MATTHEWS:  And, all of a sudden, they had to explain some of these battles after they occurred and what happened at them.

These guys are going to have to live together.  Here‘s the Republicans, if they win control of the Senate.  Here‘s Mitch McConnell welcoming Marco Rubio, Sharron Angle, Rand Paul, Joe Miller, and their de facto leader who is already there, Jim DeMint.  Who is the real boss in that case, Sam?  

STEIN:  Well—

MATTHEWS:  Jim DeMint, it sounds like to me.

STEIN:  Jim DeMint is the one ascending, but I think McConnell holds the -- 


STEIN: -- power.

MATTHEWS:  Because he‘s as far right as anybody running. 

STEIN:  Yes.  And, listen, you made a “Star Wars” reference, which was great, in the last panel.


MATTHEWS:  Well, it was ludicrous.  That‘s why it was funny.

STEIN:  Exactly. 

But I actually did some reporting today.  Craig Shirley, a longtime Republican operative in this time, I asked him, what is the caucus going to look like next year?  He says, assuming November goes as expected, the GOP will shortly thereafter descend into a brawl that will resemble the bar scene in “Star Wars.” 



MATTHEWS:  Shirley and I think alike. 

Let me go to Steve Kornacki on Salon. 

You represent Salon.  Salon is a progressive journal, I think it‘s fair to say.  People who are on the progressive side of things have to make a decision.  Are some of them, because they don‘t think Barack Obama is quite, you know, pluperfect, they way they he might—ought to be, are they going to actually not vote in the face of this onslaught of right-wingisms that is coming to the Congress if they don‘t vote? 

KORNACKI:  Well, I think this is the best motivator that the Democrats could have in the fall elections, is the prospect. 

Every time you have a Sharron Angle or a Rand Paul or a Joe Miller sort of open their mouth and talk about basically de-funding the government and shutting it down, and we don‘t need basic social safety net that people have relied on this country for decades, every time they talk that way, and every you see projections that Republicans are actually going to be controlling this thing, I think that‘s the one thing right now that sort of overcomes the disappointment with Obama and the disappointment with where things sort of stand right now. 


KORNACKI:  That‘s the one thing that overcomes it.

MATTHEWS:  But there‘s a big change between—there was -- 20 or 30 years ago, when Goldwater or Reagan would say something, one of their staffers or one of their managers would come to them and say, cool it.  Talk about bread and butter.  Talk about the basics.  Get off the ideology. 


MATTHEWS:  I have noticed these Tea Partiers aren‘t doing that.  Toomey is out there saying what he‘s saying in quite flat-out terms.  He‘s a real Club For Growther.  No government.  No subsidies.  No taxes.  I mean, stay out of the way. 


STEIN:  This is why I don‘t think it‘s wrong to talk about—or project about a shutdown, is that all of these people live in the belief that they lost power because they abandoned their principles during the Bush years. 

And so the only way to hold power once you regain it is to stick with those principles.  One other thing.  Gingrich didn‘t cut a deal necessarily because he thought it was the right to do.  He lost a very important PR battle when he complained about getting a seat at the back of the plane with Clinton.

MATTHEWS:  He looked like a Washington egomaniac. 

STEIN:  And you look at some of these retrospective pieces from Tom DeLay and from him, they think that was a massive turning point, not that it was a tactical mistake.

It was that the image of him as a whiner really screwed him over.  So they think they could actually win this thing.  And they also want to stick to principle. 

MATTHEWS:  Well, the other thing is, possibly, Steve, that the right-wingers, when they come to Washington, Sharron Angle, they‘re not going to make friends across the aisle.  They‘re not going to come and say, oh, I‘m joining the team.  We all have to work together.

I have a hunch people like Toomey and the rest of them will stay very much pure, by their standards, in other words, fanatical. 

KORNACKI:  And that‘s the big problem for the Republicans, if they have the majority, if they have the majority, and it‘s on them to set the agenda coming out of the House and coming out of the Senate, because when you‘re in opposition, when you‘re the minority party, as they are now, it‘s actually pretty easy to keep sort of the moderate faction in the Republican Party, like a Scott Brown, potentially a Mark Kirk, it‘s pretty easy to keep them on the same page as Sharron Angle, because you can make the moderate case against Obama.  You can make the right-wing case against Obama.

You can always find a reason to say no.  But when it‘s up to you to come up with something that everybody has got to say yes on in your party, that‘s when the absolutism becomes a problem.  And I really don‘t see how they come—it‘s a needle they have got to thread.  I don‘t see how they do it.

STEIN:  Spot on.

MATTHEWS:  Well, the differences in this campaign are becoming crackling well before election night.  If we do our job here by any time in October, people ought to know exactly what the stakes are with clarity. 


MATTHEWS:  Thanks you, guys.  Thanks to you guys for coming here, Steve Kornacki and Sam Stein.

Coming up:  A dentist from Chicago is trying to convince, well, in his way, Hillary Rodham Clinton to undercut President Obama and run for president this time.  Really?  Well, watch the “Sideshow.”  And maybe he‘s ahead of schedule.  Maybe he‘s off-schedule.  We‘re going to hear what he has to say.  He‘s an amateur.  But maybe there‘s something there.  Who knows—coming up on MSNBC.



MATTHEWS:  Back to HARDBALL.  Time for the “Sideshow.” 

Could Delaware be the new Alaska?  Tea Partier Christine O‘Connell—

O‘Donnell, rather—is hoping to pull off an upset against popular U.S.

Congressman Mike Castle in that state‘s Republican Senate primary.  O‘Donnell was the Senate nominee back in 2008, but the lost the race to longtime Senator Joe Biden, didn‘t she? 

Well, yesterday, conservative radio host Dan Gaffney, who backed O‘Donnell in ‘08, called her out on her claim that she had won two of the state‘s three counties.  I love it when they get caught.  Let‘s listen.


DAN GAFFNEY, RADIO TALK SHOW HOST:  When you were speaking at an out-of-state group recently and you told them that you won two out of three counties in Delaware, what did you mean? 

CHRISTINE O‘DONNELL ®, DELAWARE SENATORIAL CANDIDATE:  I don‘t think I ever said I won two out of three counties.  But I—


GAFFNEY:  Well, let‘s listen to the audio.  Hold on one second, because I have the audio right here.

O‘DONNELL:  I was the 2008 endorsed Republican Candidate in 2008 against Joe Biden, and I won in two counties.  I didn‘t have the support of our liberal Republicans then.

GAFFNEY:  You said you won in two counties.

O‘DONNELL:  All right.  You know what that probably was?  You‘re on the campaign trail a lot.  I meant tied. 


GAFFNEY:  Well, you didn‘t tie.



MATTHEWS:  She didn‘t tie either. 

Anyway, as they said in World War II, loose lips sink ships.  This candidate‘s loosey-goosey claim of having won two of Delaware‘s three counties just isn‘t true.  Voters, take note, also that Mr. Dan Gaffney is not to be trifled with. 

Next, say it ain‘t so.  Hillary Clinton has said repeatedly that she‘s not going to run for president again.  Well, Chicago dentist William DeJean is hoping to convince her otherwise.  He spent $5,000 of his own money to put an ad on for some reason down in New Orleans.  Let‘s watch.


On Screen:  She has more experience working in and with the White House than most living presidents.  She is one of the most admired women in our nation‘s history.  Let‘s make sure the president we should have elected in 2008 will be on the ballot in 2012. 

Start now.  Where there‘s a Hill, there‘s a way,


MATTHEWS:  Well, it‘s certainly majestic.

Anyway, one thing that won‘t happen in the next two years is that. 

Parties that divide, divide, and half-a-party can‘t win. 

Now for tonight‘s “Big Number.” 

A Pew survey asked Americans to name the chief justice of the Supreme Court.  To make things easy, people were given four names to choose from, Thurgood Marshall, Harry Reid, John Paul Stevens, and John Roberts.

How many correctly picked Roberts?  Just 28 percent.  The thing about that number, 28 percent, if people simply made a random guess among those four possibilities, the odds say that 25 percent would have gotten it right, if they didn‘t know anything.

That‘s how many Americans can tell you who heads the Supreme Court, 28 percent.  Wow—awfully depressing not-so-“Big Number.” 

Up next:  A growing number of Democrats want to extend the Bush tax cuts for the rich, the top brackets.  Will they torpedo the president‘s plan to end those tax cuts for the wealthy? 

You‘re watching HARDBALL, only on MSNBC.  


HAMPTON PEARSON, CNBC CORRESPONDENT:  I‘m Hampton Pearson with your CNBC “Market Wrap.”

Stocks closing out their best week in two months on that better-than-expected jobs report.  The Dow Jones industrial soaring 127 points.  The S&P 500 moving up 14.  And the Nasdaq finishing 33 points in the green. 

Employers cut 54,000 jobs in August, far less than the 100,000 economists were predicting.  But investor enthusiasm was only lukewarm.  The numbers were not quite good enough to signal a broader recovery, but not quite bad enough to trigger additional measures from the Federal Reserve. 

But investors did dive back into the financial sector with a moderate amount of gusto, Goldman Sachs leading the pack with a gain of more than 5 percent.

And video game makers in the spotlight today as well.  Take-Two Interactive shares surging more than 7 percent after boosting its quarterly forecast.  Activision Blizzard, Sony, Electronic Arts and Apple all ending on the plus side as well. 

That‘s it from CNBC, first in business worldwide—now back to


MATTHEWS:  Welcome back to HARDBALL. 

September is going to be a big fight over tax cuts.  Republicans want to keep all of the Bush tax cuts.  President Obama wants to keep the cuts for the middle class and stop the cuts for the wealthy, those above $250,000 a year for a couple.

The president‘s party increasingly appears to be somewhere in the middle.  Here‘s White House Press Secretary Robert Gibbs on Thursday asserting the president‘s position. 


ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  I will reiterate what we‘ve said throughout the debate.  And that is the president believes that tax cuts for those in the middle class should be maintained; they should be kept.  The money that—that would be spent to keep those tax breaks for people that make more than $250,000 a year—and let‘s be clear:  The—the majority of the money that those—that would be spent next year on maintaining those tax cuts are for people that make more than $1 million of year, OK?  That is a statistical fact. 


MATTHEWS:  Well, here‘s Maryland Congressman Chris Van Hollen, the man in charge of getting Democrats elected to the House, with PBS‘ David Chalian.  That‘s today, this interview.


REP. CHRIS VAN HOLLEN (D), MARYLAND:  The big issue here is on the Republican demand for permanent tax cuts, because they‘re not saying only, well, let‘s keep this going for just one more year.  I mean, that can be part of the discussion.  That can be part of the mix. 

DAVID CHALIAN, PBS:  Have you said proposed that to them?  I mean, have you guys said to them, let‘s talk about temporary?

VAN HOLLEN:  Well, that can be part of the mix in the very short term.  Again, I don‘t think it‘s the best way to accelerate the economy.  There are other ideas out there. 

But that‘s not what they‘re saying.  I want to be very clear about what they‘re saying.  They‘re saying, unless we get a permanent tax cut break for the wealthiest, we‘re not going to go along with a permanent extension of middle-class tax cuts. 


MATTHEWS:  Wow.  Something is going.  I think the ice is cracking here. 

So, will Democrats do what the president want, or are they ready to give the Republicans, give some of them their demands?

With us now, two Democratic House members who support the president‘s position on tax cuts, Maryland‘s Donna Edwards, who sits on the Transportation and Infrastructure Committee, and Kentucky‘s John Yarmuth, who sits on the Ways and Means Committee. 

I want to start—Donna, thank—Congresswoman, thank you so much for joining us.

We have got a very close personal friend we just lost, Smith Bagley. 

Let me—let me ask you about this.  Are there any of your colleagues that are thinking maybe Chris Van Hollen is speaking for them, meaning this debate shouldn‘t be about the long term right now, during this recession; maybe there might be a delay in raising these tax rates back to where they were, rather than, in the middle of a recession, raising rates for anybody?

Is there any chance that might be the final outcome here? 

REP. DONNA EDWARDS (D), MARYLAND:  Well, I think the outcome, at least for me, and I think for a number of Democrats, is, you know, we want to make sure that we protect working families, people making under $250,000, extend those tax cuts.  And for the 2 percent that are consuming $830 billion in the tax cuts, let‘s remove those for those upper income earners.  I think this is really simple.  And there are other ways and tools that we can look at stimulating the economy.

MATTHEWS:  So, you‘re for a return permanently to the higher rates for the wealthy?

EDWARDS:  Absolutely.  I mean, what‘s really clear is that people making under $250,000 actually put their money back into the economy.  Those who make more than that simply don‘t.  And they don‘t deserve $830 billion that‘s really not paid for at all for all the deficit hawks that would be taken—put back into this—into this economy.

So, no way we should be extending tax cuts for that top 2 percent. 

Let‘s protect the 98 percent.

MATTHEWS:  Congressman Yarmuth, a buzz in the cloakroom.  Is there some buzz to say the last thing the Democrats need going into an election is to tell their contributors, a lot of whom do make over $250,000 a year, that their taxes are going up, thanks to the Democrats?

REP. JOHN YARMUTH (D), KENTUCKY:  Well—yes, I think that there‘s certainly that concern.  But, you know, the CBO said that if we let these tax cuts be extended, we‘re going to be on a course to extend that historic record of deficit and debt in relation to GDP in 15 years.

The right issue now, I think if we wanted to, if we really want to prove we‘re interested in deficit reduction as a party, we need to make sure—as Donna said—that we don‘t foot back this money into the millionaire‘s hands.  We‘ve had over the last few years of the greatest increase in disparity of the wealthiest Americans and anybody else.

MATTHEWS:  That‘s true.


MATTHEWS:  That‘s certainly true.  Let‘s take—

YARMUTH:  So, we don‘t need to exacerbate that.

MATTHEWS:  Well, let‘s take a look here.  Some your Democratic colleagues, what they‘re saying out there.

Virginia‘s Gerry Connolly told the “Associated Press,” quote, “In my view, this is no time to do anything that could be jarring to a fragile economy.”

Alabama‘s Bobby Bright, he‘s a conservative Democrat, said, “I‘ve heard from a vast majority of the my constituents that they don‘t want to believe—they don‘t want to believe—or they don‘t believe in tax increases on anybody at this point in time.”


Over to the Senate, Evan Bayh, who is leaving the Senate, said, quote, “The economy is very weak right now.  Raising taxes will lower consumer demand at a time when we want people putting more money into the economy.”

And Kent Conrad from North Dakota told “McClatchy,” “The general rule of thumb is that you do not raise taxes or cut spending during an economic downturn.  That would be counterproductive.”

So, there you have it.  Let me ask you this.  Here‘s the problem it seems to me and you folks are the pros.  And I‘m watching this.

And you, Congresswoman Edwards, first of all.  What good will it do you politically if you pass a bill in the House in the next two months before the election, which raises taxes back to their old level for the rich.  You go over to the Senate.  They can‘t get the 60 votes to do that.

They can‘t get the 60 votes to do.  And you‘re stuck with your neck out there having been for higher taxes, including those for your contributors, the people with the big money, and you can‘t make it into law.  So, you‘re just out there exposed.  Republicans come in next year and they protect the rich.  So, all you did was to expose yourself politically with no real social policy benefits.

Your thoughts.

EDWARDS:  Well, let me tell you, I think that those are the political concerns, Chris.  And I think that we have to be on the same page in the Senate and the House so that we can actually get a bill to the president.

And you‘re right.  I don‘t think it makes sense for us to go into this blindly.  But the fact is, that for 98 percent of working families making under $250,000, we need to extend those tax cuts and make them permanent.  And there are other things that we can do.  We can authorize our transportation—

MATTHEWS:  But can you do it?  I‘m sorry to interrupt.  But can you actually get that done before you lose control of Congress?  Before this session ends?

EDWARDS:  Well, I think—

MATTHEWS:  Can you actually raise taxes back to their old rates under Clinton, which weren‘t that horrible.  Obviously, 39 ½ percent.  It didn‘t break the economy, a huge economy in the 1990s.  I think some of the people should remember that.  We were booming back then with those rates.

But if you can‘t get back to those rates and you try, is it going to be like cap and trade?  One of those things.

Let me go to Congressman Yarmuth.  I‘m putting all the heat on you. 

Let me go to Congressman Yarmuth.

YARMUTH:  Well, I‘ll give you the answer.


MATTHEWS:  To be on the right side on taxes—

YARMUTH:  I‘ll give you the answer.

MATTHEWS:  with the middle class that were getting hit.

YARMUTH:  You answered the question.  You answered the question, Chris.

MATTHEWS:  Oh, you want me to throw it back to her.  Aren‘t you a nice guy?

YARMUTH:  No, no, no.  The answer is, the answer to the political argument is, that you show whose side you‘re on.  And I think they show whose side your own, we‘re on the side of the vast majority, the 98 percent of the American people whose standard of living hasn‘t really increased over the last decade.

My brother is in that category.  My brother is in the barbecue business.  He‘s done very well.  He doesn‘t care about paying that additional 4.5 percent.  He‘s in the barbecue business.  He said to me, I want to make sure everybody else can afford barbecue because if they can‘t afford barbecue, it doesn‘t matter what my tax rate is.

And I think that‘s where we are as an economy.  We got to make sure that everybody else does well.


YARMUTH:  Not those 2 percent at the top.

MATTHEWS:  OK.  Well said.  Thank you guys both for coming on a weekend.  Have a happy Labor Day.  I know Democrats, especially, celebrate Labor Day.

Thank you, U.S. Congresswoman Donna Edwards of Maryland.

U.S. Congressman Yarmuth, John Yarmuth, nice to meet you sir.

YARMUTH:  Nice to meet you, Chris.

MATTHEWS:  You and the congressman, thank you so much.

Up next, oil giant BP—here it goes.  Didn‘t you know this was coming?  They‘re saying they can‘t continue.  They can‘t keep drilling in the deep water down there where they got into trouble with, with that oil spill.  They can‘t pay the money they owe to the people that they screwed.

Isn‘t this predictable?  Isn‘t this—so they want to be able to go back and drill deeper again just as dangerously or they‘re not going to be able to pay who they owe.  We‘ll get to that in a second.



MATTHEWS:  Mississippi Governor Haley Barbour says he won‘t decide whether he will run for president until after the midterm elections this November.  But listen to his reason as to why he may have an advantage over President Obama if he runs against him.  In an interview with the Hoover Institution, Governor Barbour e said, quote, “As far as Southern accepts and Mississippi, this country may be looking for an anti-Obama in 2012.  Don‘t know.  Could be.”

What exactly does Barbour mean by that?  We report.  You decide.

HARDBALL—back in a minute.



TONY HAYWARD, BP:  We will honor all legitimate claims, and our clean-up efforts will not come at any cost to taxpayers.  To those affected and your families, I‘m deeply sorry.


MATTHEWS:  Well, that man has got his life back.

Welcome back to HARDBALL.

Remember that contrite BP and that TV ad there vowing to make things right?  Well, now that BP is no longer on TV 24/7, and that spewing in the Gulf has stopped, the country is singing a different tune.  It‘s not quite as contrite.

“The New York Times” reports that BP executives now warn that if Congress doesn‘t pass legislation that lets them begin deepwater drilling again, they won‘t be able to pay the claims.  Isn‘t that sweet?

Here‘s what they‘re saying: “If we‘re unable to keep those fields going, that is going to have a substantial impact on our cash flow.  That makes it harder for us to fund things, fund these programs,” meaning the programs that pay for the damages.

Here‘s another quote from a BP spokesman.  “I am not going to make a direct linkage to the $20 billion, but our ability to fund these assets and the cash coming from these assets that are securing these funds would be lost.”

Bernard Charbonnet is a New Orleans attorney, represents people and businesses affected by the BP oil spill.  He‘s also the former New Orleans Port Authority chairman.

Mr. Charbonnet, we‘ve counted on you as an expert for the human impact down there along the Gulf Coast.  It‘s nice to have you on.

I know you know the news.  The suddenly un-contrite company, BP, is now saying if they don‘t get their licenses back, their permits back to go back into the deep water as they—where they got into trouble and lickety-split, they‘re not going to start paying off that money.  They‘re going to have a problem.

Now, what do you make of that complaint by them?


Chris, who‘s surprised?  That‘s the question.  Who‘s surprised?  This is the Darth Vader of the oil industry in the Gulf Coast.

They are the fourth largest corporation, not in the United States but in the world, only 11 percent of their Gulf operation—of their oil operations in the Gulf.  They can pay for this thing out of their lunch money.  Now, this is what we expected.

MATTHEWS:  Well, there is—this is their ugly shtick, if you will, is this their way of saying, if you don‘t, if you don‘t let us do what we like, you‘re not getting your money?

CHARBONNET:  Absolutely.  But—

MATTHEWS:  In other words, they‘re playing the shtick, not the sugar here, if you will.

CHARBONNET:  Exactly.  But this is not volunteerism, Chris.  They‘re going to pay either the Congress is going to make them pay or ultimately, the courts are going to make them pay.  I think they‘re waving the wrong thing here.  There‘s no sugar on this shtick.  And you‘re right, Chris.

MATTHEWS:  OK.  Let‘s talk about this whole thing of what happened down there.  What do you make of this latest fire?  You‘ve been studying that, of course.  It apparently has a good result.  Nobody got killed.  They put the fire out.

What‘s your sense of it?

CHARBONNET:  Yes.  Frankly, it was a fire.  At first I thought I‘d have to eat crow with you, Chris, and re-discuss the issue of the moratorium.  But that moratorium ends in November, as you know.

It wasn‘t a big thing.  I mean, it happens regularly.  But at the end of the day, the Interior Department‘s got to the get stricter.

You know, these guys are not going to police themselves.  They‘ve got to come down here with some strict rules and regulations.  You would think the industry would get together and say, look, let‘s get together and clean this up because we‘re only going to have more problems, but they‘re not.

So, it‘s—we‘ve got to rely on big government to come in and do big things.  It‘s just that simple.

MATTHEWS:  What‘s your hunch as an attorney?  Do you think people are going to get that money, $20 billion and up?  Are they going to get it after all this fussing around and PR?

CHARBONNET:  Yes, I think they‘re going to—yes, I think it‘s—I think they‘re going to pay some money in the voluntary good spirit kind of way.  But, ultimately, BP doesn‘t want to spend any money.  It‘s going to wind in the Congress.  And if the Congress doesn‘t do it, then the lawyers are going to get it.

I mean, at some point, the litigation has been permanentized in New Orleans now.  It‘s not going to be in Houston.  And there‘s going to be so many claims and so much litigation.  Ultimately, they‘re going to pay.

The problem is that they‘re not paying quick enough for the little guy on the street, the 7,500 or so, you know, oil rig workers, the poor fishermen who are out of business, can‘t buy an oyster in this town.  I mean, this is a calamity of record proportion.

MATTHEWS:  Well, I still look forward to any time we can to get down and eat dinner at Emeril‘s and places like that.

CHARBONNET:  I‘m waiting on you, man.  You denied me—you denied me that pleasure.

MATTHEWS:  I‘ll take to you dinner at Emeril‘s, the greatest place in the world.  Thank you, sir, for coming on.

CHARBONNET:  Good to talk to you, Chris.

MATTHEWS:  It‘s always charming to be with you.  Thank you.

CHARBONNET:  Good to be with you, Chris.

MATTHEWS:  When we return, I‘ll have some thoughts who the president needs to put in his cabinet to help turn his presidency around.  I‘m actually proposing tonight, no knocking, proposing.

You‘re watching HARDBALL—you stick around and catch my, well, the plan, it‘s the Matthews‘ plan for greatness—only on MSNBC.


MATTHEWS:  Let me finish with tonight with a plan to strengthen America‘s ability to solve its problems.  It‘s tough and it‘s water tight.

President Obama has many strengths as this country‘s head of state.  He‘s clear-minded, gifted in intellect, artful in presenting issues and his vision of leadership.

However, these past two years have been a shakedown cruise.  We have seen weaknesses in this ship of state.  It‘s come time for the shake-up.

This president needs to put a firm Democratic brand on his defense policy.  He was smart to keep Robert Gates in the Pentagon.  But Gates is a holdover from the Bush era.  There‘s no real connection between what the country voted for in 2008 and what we‘re getting in terms of terms of security poles.

Obama needs to bridge that gap.  He needs to pick a Democratic ally as defense chief.  That Democratic ally is Hillary Clinton.

With her at the Pentagon, he‘d forge confidence in Middle East policy, friends of Israel would know we have someone in charge of America‘s military force who has an instinctive concern for the Jewish state, a proven track record of support.  It will help get the deal cooked over there and getting that deal is the very stuff of American greatness.

Now to the tough one: the economy.  There‘s one person in this country with a track record, the communications pizzazz to help make, carry out, and market the historic recovery program that is still needed.  His name is Michael Bloomberg.

Look, you can say this is outlandish that he would never take the job at treasury or as White House chief of staff, but there is a precedent.  James Baker—he made Reagan a success and Barack Obama needs a Jim Baker, someone to focus the energies of this administration on economic reconstruction, period.  Someone who lay down the same strong chain of command on domestic policy that Hillary Clinton will define on the national security front.

This is the answer.  Enough of the solo act, President Obama needs to build a team, a phalanx of political and policy power that takes his idealism and makes it deliver in strength abroad, jobs and renewed economic confidence at home.

OK.  I have a dream.

That‘s HARDBALL for now.  Thanks for being with us.  Have a great Labor Day weekend.  And we‘ll see you next week.

Right now, it‘s time for “THE ED SHOW” with Ed Schultz.



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