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'Hardball with Chris Matthews' for Monday, July 25, 2011

Guests: Michael Steele, Brian Sullivan, Howard Fineman, David Corn, Jennifer Palmieri, Brian Levin, Mike Lee

CHRIS MATTHEWS, HOST: It‘s July 25th. Do you know where your debt ceiling is?
Let‘s play HARDBALL.
Good evening. I‘m Chris Matthews down in Washington. Leading off tonight, bad behavior. I‘ve long understood that the two parties in this country have different roles to play. Democrats focus on the needs of people, health care, the challenges of getting old, the urgency of keeping poor people up to at least some basic level of human existence. Republicans focus on, well, the punishment of criminals, a beefy defense policy, lower taxes. Fair enough. Our country makes (ph) it. We decide things out of this back and forth advocacy, with the voter deciding who gets the upper hand, whose turn it is to lead, whose turn it is to go into opposition. Good, good, good, our noisy democracy at work.
But now there‘s a level to one side of this argument right now that‘s negative, nasty, out of hand. It‘s threatening to destroy the way we decide things. It‘s behaving like the little rich kid who wants to leave the game, take his ball and go home. Remember that kid? It‘s my ball and I want to go home. He‘s grown up now and he says, It‘s my money and I want to go home, and I want it all.
Is it really the main purpose of the United States government right now to cut taxes on the wealthy? Is that the purpose of government, not to deal with the fact that half our kids are not graduating from high school, that much of our natural (ph) infrastructure is old and falling down, that we‘re beginning to lack the very things that allow even emerging countries in this world to compete?
Is the purpose of this country‘s federal government to ensure that the wealthy get the largest possible percentage of their gross income to have for themselves? Is that the purpose of our society, to make sure that people with money get to keep as much as possible?
I don‘t think the overwhelming number of Americans think it is. I think people are a lot more enlightened than that, and they need to speak up. We have this debt crisis and we need to meet it. If the president‘s willing to put Medicare and Social Security on the table, how can anyone stand up and say, Hands off taxes, hands off my loopholes, hands off my stuff, I‘m bringing this country down and then I‘m going home?
Well, we begin tonight with the debt standoff and the dueling Reid and Boehner plans. Late this afternoon, we learned that President Obama will go on television tonight to speak to the nation at 9:00 PM. We‘re going to carry that live here on MSNBC.
Right now, Howard Fineman‘s the Huffington Post Media Group editorial director and David Corn is Washington bureau chief for “Mother Jones,” and they‘re both MSNBC political analysts.
Howard, you first. And take your time here. It does seem to me that we‘ve got two plans on the table. One is basically the same old, same old Republican plan. Now it‘s a two-step plan. It‘ll get to it in a minute. Boehner‘s is basically a watered-down version of what they sort of agree on without any tax increases of any kind.
The Democrats are on their knees to try to make a deal here.
MATTHEWS: They‘re getting closer and closer, genuflecting the Republican side—no taxes, spending cuts only, the way the Republicans wanted. Why not a deal?
FINEMAN: Well, the Republicans don‘t want a deal. They‘d rather have the fight than the deal. And the president is in the posture—and he‘s going to be in it tonight at 9:00 o‘clock—of trying to say, Look, they won‘t even accept a deal on their terms.
MATTHEWS: He‘s genuflecting.
FINEMAN: He‘s genuflecting to try to make a political point, which is that the Republicans are only in it to make him look bad, to create chaos in the market, to undercut the economy.
MATTHEWS: So you really believe that they know the danger we‘re facing on the world market?
FINEMAN: That the Republicans do?
MATTHEWS: Yes. They know...
FINEMAN: They don‘t necessarily believe it. What I‘m saying is, the president was willing to genuflect, meaning to take any revenue increases or tax increases...
FINEMAN: ... out of the so-called Reid plan, the Harry Reid plan, which the White House approved of, by the way. Harry Reid didn‘t put that out, I was told this afternoon, obviously, without the support of the White House. He checked with the White House before he did it.
Now the president‘s going to go on the air tonight and push the Reid plan, which has no revenues or taxes in it. So he‘s genuflecting, giving up all the political points to be able to make the spin doctor‘s point that it‘s the Republicans who are being recalcitrant.
MATTHEWS: Well, I think they‘re making that point legitimately now.
MATTHEWS: I think it‘s real, it‘s not just PR.
MATTHEWS: Let‘s take a look at the Reid plan very quickly. It has one step. It raises the debt ceiling through the 2012 elections. That helps the president. It includes $2.7 trillion in cuts, but it does nothing to entitlements, it has no new taxes, and savings really come, in part, from ending the wars eventually in Iraq and Afghanistan, about a trillion dollars there, highly questionable there.
Here‘s Speaker Boehner‘s plan, while we‘re at it. The Speaker Boehner plan has two steps in it. It totals $1.2 trillion in cuts. It has a six to nine-month debt ceiling extension, followed by a commission which will find another $1.8 trillion on cuts, and then another debt ceiling mechanism next year sometime.
So David, it seems like the president is basically saying, All I want is to get this out of the way before the next election. In that interest, I‘ll give you what you want, basically.
DAVID CORN, “MOTHER JONES,” MSNBC POLITICAL ANALYST: Well, the Democrats, the White House and Harry Reid, have drawn a line in the sand. The problem is, it‘s inside the Republican tent.
CORN: I mean, it‘s basically up to the bedroom. And they‘re saying, Well, we‘ll given you cuts—and part of Reid‘s plan is $1.2 trillion in defense and non-defense discretionary cuts. We don‘t know what those cuts will be. They may be real cuts in real programs that the president and other Democrats care a lot about. They have basically yielded to Republicans on their big conceptual point...
CORN: ... which is linking lifting the debt ceiling to spending cuts, and they‘ve gotten nothing in return.
MATTHEWS: Two things the Republicans still want. They want a dollar-for-dollar cut in spending to match any debt ceiling increase. And they still want some kind of trigger mechanism for a balanced budget amendment. So they‘re still holding out ideologically.
Here‘s Speaker Boehner late this afternoon when asked about the Reid plan. Let‘s listen.
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I believe that the plan is full of gimmicks. We‘re not making any real changes in the spending structure of our government. And it doesn‘t deal with the biggest drivers of our deficit and our debt, and that would be entitlement programs.
MATTHEWS: Well, are the Republicans (INAUDIBLE) with entitlements.
CORN: Well, they‘re not touching that, either. They‘re putting that to the side now. Look, these...
MATTHEWS: How can he say that then?
CORN: Listen, they have forgotten the number one rule of hostage taking, which is when the other sides gives into your demands, you let the hostage go! But I don‘t think they‘re interested in doing that. At least 100 members of the Republicans on the House side I think want to blow up the economy because they think that will save the economy.
FINEMAN: Well...
MATTHEWS: Well, they want a couple things. They want—they—they‘re certainly willing to risk a worldwide explosion at our expense...
MATTHEWS: ... in terms of these markets around the world. We never know which day they‘re going to go south on us. But they also they want something else. This little second attack next year...
CORN: Yes. Of course.
FINEMAN: Yes, that‘s what this is all about. That‘s what this is all about. At least, that‘s what Speaker Boehner is trying to do. He‘s speaking—he was speaking right there to the Tea Party Republicans, essentially, and he was saying, OK, we‘re not giving you the “cut, cap and balance” thing. We‘re not giving you that set of gimmicks. But don‘t worry, folks, we‘re going to force the president to go through this whole debt ceiling thing again next spring just as the presidential campaign is really...
MATTHEWS: Right after they‘ve picked...
FINEMAN: ... gathering steam.
MATTHEWS: ... their candidate.
CORN: Right.
FINEMAN: Right. And that—so that‘s how we‘re going to try to satisfy you members of the Tea Party. We‘re offering you that, plus no revenues.
CORN: Plus votes on the balanced budget amendment, too.
MATTHEWS: Somehow.
CORN: So the next year will be devoted to arguing over that and arguing over the debt ceiling again, so a whole year...
MATTHEWS: So here‘s a country—ours...
MATTHEWS: ... Republican, Democrat and independent, that instead ever focusing on the fact that half the kids in this country don‘t graduate from high school, which is our future, and that we have an infrastructure that‘s crumbling—and the government does have a role, doesn‘t it, behind national defense and cutting taxes? It does have a role. We don‘t talk about the role of government anymore. We just talk about cutting taxes and debt control. That‘s all we do anymore.
CORN: Chris, did anyone mention the word “jobs” today?
MATTHEWS: Well, that‘s a question, too.
CORN: I mean—I mean, that‘s the other thing. Where are the jobs? For either side, we‘ve gotten off on the track of deficit reduction over everything else.
MATTHEWS: Well, here‘s my question, more fundamental, getting to that point, because I want to bring this back home. You guys both know a lot about economics. It‘s simple (ph) this. If we had the balanced budget amendment in effect right now, exactly what the—their nirvana, you‘d basically be reducing government to about 20 percent of GDP. You‘d be cutting it from 3.75, which it is right now, to 3.0. OK, big deal. But that would be the difference, OK?
That would be a lot less government spending. Do they believe that a lot less government spending right now would be good for the economy? Do they believe that their own solution would be good for the economy?
FINEMAN: Well, they believe it. The hard core of the Republican Party believes it.
MATTHEWS: They do?
FINEMAN: But most of the rest of the world does not...
FINEMAN: ... that in a recessionary time—which we are still in, with unemployment the way it is, with manufacturing regaining some strength but still uncertain...
FINEMAN: ... with demand being down overall, consumer demand being down—you don‘t withdraw hundreds of billions of dollars out of the economy at that time. I mean, and that‘s what drove the president to propose the stimulus he did at the beginning. That‘s what proposed—that‘s what kept him from attempting to raise taxes and from accepting the Bush tax cuts earlier on as a way to stimulate the economy...
MATTHEWS: OK, let me—let me put some...
FINEMAN: ... and that ends up putting the president in a difficult position politically now to try to raise taxes.
MATTHEWS: Let me ask you, Howard, is it possible what the Republicans are up to here—because I hear this from people around me who are on the progressive side. And you hear it, probably. You‘re on the progressive side. Is it possible that despite all this “We‘re all in this together” talk we like to engage in, and I believe in, that some people on the right are quite willing to see this country get burned in the butt, to really hit by the world market, to really start seeing spiking interest rates, to really see a drop in our bond rating, hellacious stuff, so that they can make their point? They‘re not at all willing—they‘re not at all to avoid that at the cost of their own ideology.
CORN: Well, I think that...
MATTHEWS: Do you hear that from some of them?
CORN: I think some people fear that or suspect that. I think the reality is that there are people who don‘t believe in reality and they don‘t want to listen to people in the government or people on Wall Street. We know better. We tighten our belts when things go bad. The government has to do the same. But I do think there are some—I think Ron Paul said this just today, the past few days—we should default. Default would be good for America. It would put us back on the gold standard, and whatever he believes. So there are people who do believe...
CORN: ... you‘ve got to burn the village to save the village.
MATTHEWS: I think it‘s part of this flat earth society that doesn‘t believe in science, doesn‘t believe in human history, doesn‘t believe in global change...
FINEMAN: Chris...
MATTHEWS: ... global climate—nothing!
FINEMAN: What‘s going on here, as I see it, is a kind of slow-motion secession. This is—this is an ending of the social compact. This is two generations, three generations worth of agreement about Social Security, about Medicare, about the role of the federal government.
The Tea Party people are saying, We want to secede from that society. And the way to do it is to draw the line on spending and taxes, to starve the federal government so that it loses power, so that we aren‘t part of the social compact anymore. And that‘s the real argument that‘s going on.
And the Congress as an institution is incapable of dealing with that kind of fundamental argument, which—given in the entitlement age and the welfare state age, which is why you have the super-committees and super-duper-committees and the smaller and smaller ring of people attempting to decide something.
MATTHEWS: You know what this sounds like? You know what this sounds like?
FINEMAN: You hear what I‘m saying?
MATTHEWS: When I spent two years in southern Africa. It sounds like what the whites talked about doing, eventually going into some sort of little circle, like Custer‘s last stand against the United States.
FINEMAN: Well, I wouldn‘t put—I wouldn‘t put a racial tone on it, but I would say that the Congress is not dealing with the fundamental question here. They refuse to do it. And they‘re not dealing with it now because both...
FINEMAN: ... because both bills, both plans, both the Boehner plan and the Reid plan, don‘t deal with either entitlements or taxes.
MATTHEWS: Who‘s the guy emerging at the top, Republican name year hearing all these days? Rick Perry, who actually does talk about secession...
MATTHEWS: ... withdrawing from the federal government, withdrawing from not just the social compact but from the unity of the country and going back into the area where, I‘ll keep my money in the bank. I want lower tax rates. I don‘t want any government...
FINEMAN: Tea Party people would say, and I‘ve, you know, been to their rallies and spoken to a lot of them in Congress and out, that they‘re being driven to this by the overweening role of the government, by the fact the total tax burden, counting state, local and federal, is so high, et cetera, et cetera, that I think it‘s a desire to withdraw from a deal that they think has gotten out of hand, that they can‘t control, even though generations of Republicans...
FINEMAN: ... as well as Democrats, have benefited from the results of the welfare state.
MATTHEWS: That‘s a hell of an article, by the way. That‘s a hell of a—that‘s a book right there.
FINEMAN: Wish I‘d written it before I came on the air.
MATTHEWS: It‘s like withdrawing money from the bank, but it‘s more like withdrawing money from America, saying, I‘m pulling out my investment in America and...
MATTHEWS: It‘s home schooling. It‘s all those things people are doing right now to get away.
CORN: We‘re talking about competing visions of society. The president has made this point. In fact, when he cut that tax cut deal in December, he was setting himself up for this battle. He knew this was coming, either through the debt ceiling or something else...
MATTHEWS: Who‘s winning?
CORN: ... and this would go right to the 2012 election.
MATTHEWS: Who‘s winning? Last word. Who‘s winning?
CORN: Well, the American people are losing.
FINEMAN: The Republicans are winning. The president tried to get ahead of this. He‘s not ahead of it.
MATTHEWS: Who‘s winning?
CORN: The Republicans have controlled the agenda.
MATTHEWS: ... in their own tent. The line was drawn. You made the metaphor. Anyway, thank you, guys, Howard...
FINEMAN: Sure thing.
MATTHEWS: Pretty good line.
MATTHEWS: The line in the sand‘s within the Republican tent.
And we‘ll hear more from President Obama tonight at 9:00. He may have a new idea or not. We don‘t know whether he‘s going to make a deal tonight or keep the fight going.
Coming up: Let‘s get right to the heart of this fight and talk to a Tea Party member of the United States Senate from Utah on why they won‘t compromise.
You‘re watching HARDBALL, only on MSNBC.
MATTHEWS: Well, the fight over the deficit and debt has driven both parties to near record levels of disapproval. Catch this, 55 percent, a majority of voters, now say they have a negative opinion on the Republican Party. That‘s according to a new CNN poll, and that‘s the second highest number in nearly 20 years. The all-time high, by the way, was 57 percent back when Republicans impeached Bill Clinton.
But the news for Democrats isn‘t all that much better, although it‘s less than that bad, 49 percent have a negative view of the Democratic Party, up there near 50 percent, matching the record high from September of last year.
We‘ll be right back.
CHRIS WALLACE, HOST, “FOX NEWS SUNDAY”: So your last offer, $800 billion in new revenue and entitlement cuts, spending cuts, that‘s still on the table.
BOEHNER: Still on the table. They know what my last offer was. But again, I think a better path forward at this moment would be to work with my bipartisan congressional leaders and my Republican colleagues in the House to put together a process that‘s doable.
MATTHEWS: Welcome back to HARDBALL. That was Speaker of the House John Boehner, of course, telling “Fox News Sunday‘s” Chris Wallace that as far as he‘s concerned, the “cut, cap and balance” proposal is still up for negotiation. But will Boehner be able to appease Tea Party members in both houses with his latest proposal?
Joining us right now is Utah U.S. Senator Mike Lee. He‘s also a founding member of the Senate Tea Party Caucus. Senator, Lee, thank you for joining us.
This fight, where do you see this going by the end of this week? I am concerned—I am concerned that you‘re not going to make a deal in the next couple of days. Are you concerned about the clock and the fact of—or the possibility, a strong one, of a default?
SEN. MIKE LEE ®, UTAH: I‘m absolutely very concerned about the possibility of us passing the August 2nd deadline without raising the debt limit. That‘s exactly why, after six months of talking about this, a few weeks ago, I finally filed legislation to address the problem, the Cut, Cap and Balance Act, which proposes to raise the debt limit by $2.4 trillion.
It passed in House with bipartisan support. But when it got to the Senate, Harry Reid and the Democrats shut it down, refused even to allow debate, discussion or amendments. This isn‘t the process as it‘s supposed to work. We are open to compromise and negotiation. But for that to happen, we need to have legislation that can actually move through...
MATTHEWS: What was the...
LEE: ... and be subjected to debate, discussion.
MATTHEWS: What was the House vote—let‘s check your facts there. What was the House vote on “cut, cap and balance”? You have 240 Republican members. I though it got 234 votes.
LEE: Yes, it‘s...
MATTHEWS: What‘s this bipartisan thing you‘re talking about? I didn‘t see that there.
LEE: We had five Democrats...
MATTHEWS: It was overwhelmingly a party line vote.
LEE: Overwhelmingly, but we had...
MATTHEWS: You know that.
LEE: We had five Democrats...
MATTHEWS: It was a party line vote.
LEE: ... who voted with us.
MATTHEWS: Let‘s just call it—let‘s call it what it is. It was a party-line vote, sir. Let‘s not start with nonsense here. It was a party-line vote in the House. Fair enough. Your party controls the House. You passed it. It wasn‘t a bipartisan vote.
LEE: We have five—five Democratic votes. Last time I checked...
MATTHEWS: That‘s a...
LEE: ... when you have Democrats voting with Republicans...
MATTHEWS: You‘re talking to the American people on my show...
LEE: ... that‘s bipartisan.
MATTHEWS: ... and are trying to tell me this horse and rabbit stew of 234, 5 of whom are Democrats, is a bipartisan vote? Anybody watching now knows that‘s malarkey.
LEE: Well, look, we can argue about the meaning of bipartisan...
MATTHEWS: I‘m not arguing, just speak English here. Do you believe it was a bipartisan vote in the House? Let‘s start with the facts. Was it or was it not a bipartisan vote in the House on your “cut, cap and trade” (sic) position?
LEE: Chris, what I said was, it had bipartisan support. It had the support of five Democrats.
We can argue about the significance of that. But my point is, this is the only piece of legislation anyone has proposed that‘s made it anywhere in Congress to raise the debt limit. What I‘m saying is, we are trying to do this. We cannot be accused, we as Republicans, of simply wanting for the debt limit deadline to arrive without us raising the debt limit.
LEE: We have tried to do something about it. And that process was halted.
LEE: It was stopped cold in the Senate by those who are unwilling to acknowledge or come to terms with the fact that the American people, by a margin of 66 percent, according to CNN, support the principles of the Cut, Cap and Balance plan.
MATTHEWS: Well, let‘s talk about the three things that I think have been most in dispute and they have become ideological. One of course is the need—well, on the Democratic argument, their needs to be revenues increased. You say no to that. You also say it must include a sufficient amount of spending cuts to match the debt ceiling increase. Fair enough.
And then you say it must include some kind of measure dealing with the balanced budget amendment. The problem with your proposal which passed the House with 234 votes, including the five Democrats and the problem it will be I think with the Democratic Party is basically that requires the enactment—rather, the sending to the states by two-thirds vote of both houses a balanced budget amendment before you increase the debt ceiling.
Do you realize what a monstrous, major, stark decision you‘re asking the Congress to make before they even pass a debt ceiling increase? Do you think that‘s reasonable?
LEE: Yes, Chris. And it is a monstrous issue.
MATTHEWS: A two-thirds vote by both houses for a change in our Constitution as a prerequisite just to raise the debt ceiling?
LEE: Yes, because it is a monstrous situation that we‘re dealing with.
I don‘t dispute for a minute that not raising it will cause problems. But one of the things that‘s gotten too little play is the fact that raising it without adequate permanent structural binding, spending reform mechanisms in place, could also cause problems.
You look at the warnings that we have received from Moody‘s and Standard & Poor‘s, they talked not just about the failure to raise the debt in time. They also talked about the failure to address the underlying problem.
We believe that the identifying—identifying conditions we have put in place in Cut, Cap and Balance are the right conditions. Now, if the Democrats in the Senate don‘t agree with that, then they can and should bring that up in the debate process and have a healthy, open amendment process in the Senate so that we can come to compromise.
Instead, what we have are a small handful of legislative leaders from parties and both houses meeting behind closed doors under cover of darkness to sort of pre-cook a deal, which will then be brought forward at the last possible hour, effectively extorting members of Congress...
MATTHEWS: Well, you know why they‘re doing that.
LEE: ... and the American people into supporting it at the last minute.
MATTHEWS: Well, the problem...
MATTHEWS: The problem is, if you leave this vote up to the 80 or so Tea Party freshmen, there would not be any deal, because they would insist on your terms. Isn‘t that true?
LEE: Chris, Chris...
MATTHEWS: They don‘t want a compromise.
LEE: We‘re the only people who have offered any terms and legislation that...
MATTHEWS: But you don‘t want to compromise.
LEE: That‘s nonsense, Chris.
MATTHEWS: What good is an offer and a proposal if—where‘s the compromise here?
LEE: That is absolute nonsense.
MATTHEWS: Where are you willing to compromise, Senator?
LEE: First of all...
MATTHEWS: Are you willing to compromise on a balanced budget amendment? Are you willing to compromise on a balanced budget amendment? Are you willing to compromise on revenues? Are you willing to compromise on the level of spending cuts? Where are you willing to compromise? Just tell me where. I will listen.
LEE: I would say yes in all of those things, yes in the sense that we‘re willing to consider different balance budget amendment proposals.
Yes, we‘re open to different negotiating positions as far as the amount of immediate cuts and statutory spending caps that we have to have, in addition to the fact that this so far was in and of itself a massive compromise.
LEE: It was difficult to convince this many Republicans in both houses...
MATTHEWS: You know what you just said, sir?
LEE: ... to get on board with an idea to raise the Obama debt limit, unlike every Democrat in the Senate, who voted against it...
MATTHEWS: Everybody who wants to play this tape—you know you just said.
LEE: ... when Bush was requesting a debt limit increase.
MATTHEWS: You know what you just said? You said, A., you‘re willing to compromise. Then you said you insist a balanced budget amendment, you insist on new revenues. That‘s not compromise.
LEE: No. What I‘m saying is, within those parameters, there are an infinite number of possibilities.
MATTHEWS: Well, then you‘re—then you‘re not negotiating.
LEE: Well, I am negotiating.
MATTHEWS: The Democrats oppose a balanced budget amendment. The don‘t agree with you, so how can you reach a compromise?
LEE: But, Chris, that‘s nonsense. We have got 23 Democrats in the Senate who have said repeatedly that they support a balanced budget amendment.
We don‘t yet have consensus on who supports which plan, but that‘s why we need debate and discussion. That‘s why I have been talking about this for six months.
LEE: That‘s why we filed this bill in time to have debate and discussion.
LEE: It was shut down by the Democrats in the Senate.
MATTHEWS: Let me ask you about an ideological question. You want a balanced budget amendment. The one that has been out on the table is a 20 percent of GDP spending cap, basically reaching at some point 20 percent, and then a two-thirds requirement on any revenue increase.
Do you like that idea? Is that your proposal?
LEE: Yes, I do. I have proposed it.
Now, if you do it that way, if you do it right now, we have a $15 trillion GDP. Right now, we‘re spending 3.75. That would reduce it to 3.0. Do you think that reduction in federal spending at this point right now, if this thing of yours, this mechanism were in effect right now, would be good for the economy? A cut right now of spending of $750 billion, would that be good right now?
LEE: No, Chris. And if you had read our legislation, you would know that this is not what it would do.
The balanced budget amendment the Republicans are behind...
MATTHEWS: Of course I read it.
LEE: ... would take many years to implement. It would take two or three years to ratify and five years to...
MATTHEWS: But if it were in effect now, I said, if it were in effect now.
LEE: I know. But if it were in effect now, this nirvana of a 20 percent federal GDP percentage going to federal spending, and a requirement of two-thirds vote in the House and the Senate to get a tax increase, would that be good for the economy if it were in effect now?
And I‘m asking you, if it were in effect right now, as it reaches its fruition, is that good for country, to be strapped into a position where, except for terrorism, which seems to be the only expense you guys see as a likely possibility or a likely need to change, everything else is locked in.
I‘m saying, is it good right now if we were locked into a spending level of $3 trillion—of $3 trillion? I‘m just asking you, because that‘s what you want to happen.
LEE: Oh, what I want to have happen.
MATTHEWS: Do you want us to be strapped into a $750 billion federal spending cut right now or not? Just—because that‘s what you‘re pushing and insisting as the—as the absolute requirement or no debt ceiling increase, you‘re saying; we need this balanced budget amendment.
LEE: To be phased in gradually over the course of several years.
MATTHEWS: But if it were phased in now, would it be good for the country?
LEE: No. And we‘re not suggesting to implement it tomorrow.
LEE: We were never suggesting that.
MATTHEWS: OK. Well, then doesn‘t that answer your question of why a Democrat might oppose it? Because they know, wherever you go, that‘s where you are going to be. Remember that old rule?
LEE: Chris, if you‘re going to have me on your show, let me answer your question.
MATTHEWS: Well, you don‘t answer—you answer inconsistently. You say a bipartisan support out of the House, and it turns out it was a horse and rabbit stew of five Democrats and 229 Republicans.
And then you tell me that you‘re for compromise, but you‘re not willing to compromise on a debt, balanced budget amendment, or on revenues. So you‘re not really being consistent in what you‘re saying. And you can play this tape back until your head hurts, and you‘re not being consistent here, sir.
LEE: Chris, what I have said is, I‘m open to compromise on the details of an amendment. I‘m open to compromise on the size of the cuts.
MATTHEWS: Details of an amendment which all the Democrats oppose.
LEE: I‘m open to compromise on the nature of the statutory spending caps.
LEE: You‘re using an absolute red herring here in saying that if this amendment...
MATTHEWS: No. You are setting the standards for what you accept the compromise on. You say it has to be a balanced budget amendment to the Constitution.
LEE: What‘s wrong with setting a standard, Chris?
LEE: If we had standards in place years ago, we wouldn‘t be in this mess, where you have $15 trillion in debt.
MATTHEWS: OK, let‘s again apply your goal. How many days do you think we having on the outside to get this debt ceiling through, on the outside, before we have a problem? How many days?
LEE: I don‘t know. Maybe 10 days.
MATTHEWS: OK. In 10 days, you want to change the United States Constitution by two-thirds vote in both houses. That‘s what you‘re demanding.
LEE: Yes, if possible. We can‘t change the Constitution just in Congress, but can submit it to the states. Let‘s the states fight it out.
MATTHEWS: Two-thirds vote by both. And you think you‘re being reasonable by saying you want a two-thirds vote in the House, which is Democrat—Republican—and the Senate, which is Democrat. You want the Democratic Senate, by two-thirds vote, to pass a constitutional amendment or you want the House to come down?
LEE: Yes, that‘s exactly what I‘m saying. And I have been saying this for six months, ever since the day I was sworn in.
MATTHEWS: Well, that‘s not a compromise.
LEE: If they want my support, then this is what they will do.
MATTHEWS: Sir, you can call it that you want. You know, you can call that everything you want. You know what you can‘t call that? A compromise.
LEE: OK. Well, that‘s—that‘s—that‘s great to know, but, look, the bottom line is, we have to change the way, fundamentally and permanently, in a binding fashion, the way Washington spends money...
MATTHEWS: OK. OK. Your way or the highway.
LEE: ... because there is no way we can afford this.
I‘m not saying my way or the highway.
MATTHEWS: I hear you.
LEE: I‘m saying within these certain parameters, there‘s room for negotiation.
Now, you and I may or may not agree on what the general parameters ought to be, but I‘m saying, within the general parameters, I‘m willing to compromise, I‘m willing to—negotiation.
LEE: I‘m open to negotiation.
Now, you may not like that because you might not like my parameter.
LEE: But I‘m telling you, I have been elected to the United States Senate and this is what I‘m willing to go for.
MATTHEWS: OK. Thank you.
LEE: Now, if you move to Utah, then you don‘t have to vote for me next time, but this is what the voters in my state are telling me overwhelmingly.
LEE: You know what? Utah‘s a great state. I love Utah.
But thank you very much for coming on, Senator.
LEE: Come and join us. We would love to have you, Chris.
MATTHEWS: Well, I will go out to—I will go out and ski with you.
Thank you so much, Senator Mike Lee.
LEE: Thank you.
MATTHEWS: Up next: Donald Trump is still flirting with a presidential run, I guess, maybe third-party. And he has some advice for one of the candidates already running. That‘s ahead in the “Sideshow.”
You‘re watching HARDBALL, only on MSNBC.
MATTHEWS: Back to HARDBALL. Now to the “Sideshow.”
First up, a new development on Rudy Giuliani. He has yet to say if he‘s decided to run for president in 2012 or not, but Giuliani will be teaming up with AMC, the TV network, to host “Mob Week.” It‘s a seven-day event of mob movies, like “The Godfather” and “Scarface.” Giuliani will emcee the whole affair. It could be a way of reminding us of his success against organized crime in New York back in the 1980s. Remember, the Pizza Connection? An interesting way, I have to say, to gain hype if he is planning to run in 2012.
Up next, he‘s back now. Now that Donald Trump has taken his name out of the running for governor—for president as a GOP candidate in 2012, he is making his way back into the public eye, dispensing advice to one of the 2012 candidates. Who is the lucky recipient this time? Tim Pawlenty. Let‘s listen to what Donald has to say to him on FOX this morning.
DONALD TRUMP, CHAIRMAN & CEO, TRUMP HOTELS & CASINO RESORTS: Now, the problem with Pawlenty, he‘s trying to be a tough guy. He‘s trying to be a tough guy, but he‘s not. You know, you can‘t be something that you‘re not.
MATTHEWS: Wow. Can‘t be something you‘re not—words of wisdom coming from Donald Trump, who‘s now floating the notion of a third-party candidacy for president for himself.
Up next: the dismal state of the Republican presidential field. Big Republican donors don‘t like President Obama, but they have got no one for their presidential candidate. They don‘t like any of these guys, apparently, or women. And that‘s ahead.
You‘re watching HARDBALL, only on MSNBC.
BRIAN SULLIVAN, CNBC CORRESPONDENT: I‘m Brian Sullivan with your CNBC “Market Wrap.”
Well, stocks were weak across the board today. The only silver lining was that we didn‘t end on our lower lows of the day. Here‘s your scorecard, the Dow down about 88 points, the S&P 500 giving up seven, and the Nasdaq down 16. Uncertainty about, what else, the debt ceiling weighing on stocks, the market expressing real concern that rating agencies like S&P and Moody‘s will downgrade America‘s credit rating.
That fear driving gold to another nominal record high, gold already gold about 8 percent this month. Now, there were some pockets of strength in stocks, particularly the tech sector, Apple touching $400 a share for the first time and Hewlett-Packard winning a $1.1 billion I.T. support contract with the Department of Justice.
Finally, two big earnings reports out after the closing bell. Netflix shares are tumbling after missing on both revenue and guidance. But Texas Instruments is moving higher after delivering a mild beat on both the top and bottom lines.
And that is it from CNBC, first in business worldwide—now back to
MATTHEWS: Welcome back to HARDBALL.
As we inch closer to the Iowa straw poll this August, actually—it‘s coming up, August 13, I believe—the Republican presidential field is as long as ever, but they are no closer to generating the enthusiasm we have seen in elections past.
With a weak economy and an unemployment rate at 9.2 percent, how has the GOP not found a compelling candidate for all those donors and their base out there?
Michael Steele is the former chair of the Republican National Committee. He‘s now an MSNBC political analyst and well-received here, as always.
MATTHEWS: And Jennifer Palmieri was a spokeswoman for the Clinton White House and works now at of the Center for American Progress.
Thank you.
What we‘re trying to figure out here is a couple things. Let‘s look at some of these numbers, both of you, Michael and also Jennifer.
According to “The Washington Post” now, 54 percent of Republicans are satisfied with their current field of 2012 candidates; 38 percent say they are not happy. Compare that to four years ago, when it was a bit better off. Then, almost two in three were satisfied with their field. Not so today.
Let‘s take a look at the latest “Wall Street Journal” numbers right now. Mitt Romney still holds what is the lead, 30 percent, followed by Michele Bachmann, who is gaining steam, along with Rick Perry, who is also moving up. He‘s yet to announce, of course. He‘s in third place already.
Let‘s go to the Republican first, Michael Steele.
MATTHEWS: You have got a 9.2 percent—and I have spent some time with Republicans, as you do, and I feel they really want change. They really want a Republican to win next year, but they don‘t have one. They don‘t got one.
STEELE: Well, they certainly don‘t have anyone who has stoked the base, if you will, who‘s really kind of provided that shot in the arm that sort of says, I‘m the guy or gal who‘s going to take this train all the way through and win next year. I think that that‘s been absent for some time. So it‘s had an effect on the way you organize your campaign. It‘s had an effect on the money that you‘re going to raise.
And we have seen, whether you‘re talking Mitt Romney, and even Michele Bachmann, who‘s come in with a lot of pizzazz and punch, the numbers are falling short of the expectations, falling short of the bar. Now, a lot of that will turn around once you get past Ames. There‘s sort a winnowing out at that—for that straw poll.
But it‘s not going to be enough, certainly, Chris, I think, before January. You‘re going to have to—somebody‘s going to have to break this thing open. Either one or two of them are really going to have to define themselves in order to begin to galvanize that big money and galvanize those grassroots to get behind them.
MATTHEWS: What do you think looking at this across the aisle, Jennifer? It looks to me like—we love Michele Bachmann around here, because we sort of created her here, with some of her...
STEELE: Yes, you have said that for a while.
MATTHEWS: ... some of her more fascinating comments that are made here over the years about anti-American activities, et cetera, by Democrats, and behaving as she does.
FOR AMERICAN PROGRESS: Thank you, Mr. Matthews.
MATTHEWS: Well, she‘d be great sport and also a great show for the country. I don‘t think she‘ll ever be elected president, but who knows?
My question to you is, August 13th is coming fast. They‘re going to have the first big vote. I don‘t think she‘s going to win that straw vote. I don‘t think she‘s organized.
MATTHEWS: The headache problem that she‘s been having. The health concerns. Will that, together with her losing that really take the spin and excitement level away from what‘s been a very exciting entry into this race? Her?
PALMIERI: I mean—I can—I am a Democrat but I can recognize talent and I don‘t see a lot of talent in this field. I don‘t see a lot are --
MATTHEWS: What about her? She‘s talented?
PALMIERI: She‘s interesting, compelling, but not a great—I don‘t think she‘s a great candidate and I think we had a big boom around her and I would keep my eye on Tim Pawlenty who might be, you know, more of a herring towards this kinds of thing.
MATTHEWS: He‘s certainly a tortoise.
PALMIERI: Yes, you know—
MATTHEWS: Geez, I mean, he‘s a slow mo. I mean --
PALMIERI: He‘s, but he‘s been building.
MATTHEWS: All right, Michael --
PALMIERI: Who do you think?
MATTHEWS: I‘m having fun.
PALMIERI: She will not --
MATTHEWS: A candidate with less pizzazz. He seems like a nice gentleman, probably a good public servant. But, Michael, the idea of him zooming to the country‘s attention and standing up against the president of United States, one of the most skilled pols around, just without—he has no charisma compared to all charisma? Can you go up with a candidate like that?
MICHAEL STEELE, FORMER RNC CHAIRMAN: Well, look, I mean, you don‘t
know what the dynamics are going to play out to be. I mean, I‘m certainly
I‘ve seen Tim Pawlenty in close quarters do some pretty, pretty good things in terms of the crowd and motivating and moving a crowd.

What I like to see is to have that demonstrated now so you get that feel, get that juice going, so that you can be prepared to go up against a Barack Obama, who is going to be very, very formidable.
MATTHEWS: Well, have you believed the story that‘s out there that he‘s somehow going to unleash himself, like unleash Chiang Kai-shek, or a Formosa. All of a sudden, there‘s going to be this Superman ripping off his shirt, in comes the—
MATTHEWS: And he‘s going to come flying out.
STEELE: Right.
MATTHEWS: Well, that‘s what the word is. He‘s not going to let himself be unrestrained. What do you think of that?
STEELE: I think, Chris, as you know, and you‘ve done campaigns and been around them, you certainly having worked on the Hill, there‘s an institutionalization that occurs when you announced to begin the process of running for the presidency. And that kind of encapsulates you. And I think what they‘re saying is we really want him to kind of let loose and be himself as opposed to kind of this formal candidate.
MATTHEWS: OK. Well, he‘s been running a long time and he can‘t say on the Obamacare very well. Anyway, the second time—he says it once he won‘t say it in the second time.
There‘s a guy that does attract attention, whether it‘s authentic or not. It‘s real right now, and that‘s former Governor Jeb Bush of Florida, immensely popular down there, very successful and popular governor, dealing with issues like hurricanes and things like that, and just being a smart ideologue. Bush was asked will or won‘t he question again last Friday night on my friend Sean Hannity‘s show on FOX, let‘s listen.
JEB BUSH ®, FORMER FLORIDA GOVERNOR: I don‘t anticipate that. You never say never. This is my—this is a standard answer that I‘ve kind of learned how to give, which is, you never say never. But I‘ve never ruled out being on “Dancing with the Stars” either. So, you know—the eight ball I have in my desk that I use to make the big decisions when I was governor says, look, not so good. But there are a lot of ways you can make a difference.
MATTHEWS: Hoss Cartwright. He‘s beginning to look more like Hoss Cartwright. I don‘t know what it is.
Nothing wrong with that, I always like that guy. But here
PALMIERI: He‘s good.
MATTHEWS: Do you think he‘s got the base? Forget the ideology or the politics. Has he got the stuff to be a candidate? Has he got the --
PALMIERI: I think he‘s very talented. He scares me more than anybody else, but we are not going let the Bush in 2012, it‘s not going to happen.
MATTHEWS: Why? Because of the last name?
PALMIERI: It‘s just not going to happen.
MATTHEWS: See if we get that name a breather?
PALMIERI: It can‘t happen.
STEELE: I agree with Jennifer. But I think—I think Jeb is the stocking horse for ‘16. He is very, very good. He was an excellent governor. He‘s did a phenomenal job in turning Florida around. I think he‘s got a message that resonates and really can pull the party in the direction it needs to go to a deal with a new 21st century America which is going to be largely minority—majority/minority. It‘s going to be very diverse. Not just in its ethnicity but in his philosophies, his political views. And Jeb just kind of brings of—he brings that kind of feel to the table.
I think people respond to. But that‘s down the road a bit. I think folks are still sitting there waiting to see what Mr. Perry does out of Texas, governor of Texas. And, of course, the big P still waits to see what happens with Sarah Palin.
MATTHEWS: You know it‘s funny. I mean, if were you from another planet, Michael and Jennifer, you notice that the people are heavy set. The bigger people like Jeb, and like certainly Haley Barbour my pal, and certainly like Chris Christie, the really heavy set guys, I‘m using the right terms here, aren‘t running.
The skinny bennies are out there running. It‘s so interesting what‘s that about. I don‘t know what that‘s about. It must be politically correct if you‘re skinny these days.
Thank you.
MATTHEWS: I say it with great enthusiasm and sympathy for all overweight people. Anyway, thank you, Michael Steele. Thank you, Jennifer Palmieri. It‘s good to have you back both.
Up next, the gunman in those horrific attacks in Norway says he wanted to take his country back for the Muslims and the immigrants. He blames liberals in his country for pushing multiculturalism. This is a very sensitive topic.
Let‘s look at the state of right wing extremism in Europe.
This is HARDBALL, only on MSNBC.
MATTHEWS: At a time when there‘s very little agreement on anything, here‘s one standoff that‘s come to an end. The National Football League season will be on this fall after owners and players agreed in principle to a deal that would end the lockout. The owners opted out of their labor contract and locked out the players in March, creating the NFL‘s first work stoppage since ‘87. It looks like it‘s over.
We‘ll be right back.
MATTHEWS: Welcome back to HARDBALL.
Today in Norway, at least 100,000 people held a vigil to mourn the 76 people killed in a massacre at a summer camp and a bombing outside an Oslo government building. This morning, Anders Breivik appeared in court pleading guilty to the murders and saying both in court and in his 1,500-page manifesto that his goal was to save Europe from Muslim immigration and influence.
Brian Levin is the director of the Cal State Center for the Study of Hate and Extremism.
Again, I used the phrase earlier in the program tonight about a different topic. But, Brian, if you came from another planet and tried to explain the horror this past weekend, how would you explain the motivation behind it?
First, we have to look at the idiosyncratic. This is the person who considered himself a warrior. And folks who have prejudices who consider themselves warriors will stop at nothing.
But I think there‘s something else. I think what he‘s hit on is he struck a vein through his presence throughout Europe. And that is, this tremendous growth in Islamophobia which is in response to a real feeling against multiculturalism and the precipitous increase in Muslim populations throughout Europe, which is much more significant there than it is here in the United States.
MATTHEWS: Well, let‘s talk about the real anxieties of the general population and the extreme measure he took of horror here.
What is the general public concern in Europe about the average European base for a person whose roots go back in Europe as opposed to newly arrived immigrant from an Islamic country? What‘s does that feeling like today in northern Europe?
LEVIN: Great question. First of all, let‘s look at Norway in particular. Norway is projected to have about a 150 percent increase in Muslim population in the next 20 years.
So, we are talking about countries that are very small and countries that are homogenous.
LEVIN: Now, we‘re seeing—coming home to roost politically of several things. At least the political collapse, if you will, of the European Union. The European Union exists, but there is growing disdain for this, you know, borderless continental identity.
In addition, we have economic issues. We have what‘s considered a lot of national identity, a loss of sovereignty, the demographics that I spoke of where there‘s precipitous increases in populations to relatively small countries that are heretofore where homogenous, along with economic difficulties in places like Greece, Portugal, Ireland and Spain—
LEVIN: --which are affecting the whole continent which are trying to bail these countries out.
MATTHEWS: You know, we had—let me go back to something that doesn‘t resonate here. You know, America, I‘ve always argued growing up in the period I grew up in Europe, and a bit younger I believe, but we grew up in World War II, which was a great melting pot for Americans. Every war movie anyone of us saw from war when it‘s always had the guy, the pretty boy and then you had the Italian guy, the Jewish guy. You know, you didn‘t have a black guy in uniform and that probably in that kind of fighting unit integrated. So, he didn‘t get ahead as fast as the other ethic groups did.
But everybody benefitted from the common effort of winning World War II, the tremendous ethnic sort of coming together, melting pot of reality. But the idea of being an American was not to be a wasp. It was to be one of these several groups that were fighting on our side.
There‘s never been an experience in Europe to sort of bring people together, has there? These people come in. They brought in for cheap labor or for technical skill. But there‘s never been anything that sort of compelled unification. No sense of common fear factor, has there?
LEVIN: I think you‘re absolutely right. The closest we got was the creation of the European Union.
But with regard to immigration and multiculturalism, look, we saw Angela Merkel back in October saying, “Look, multiculturalism has failed.”
LEVIN: And we invited these people in and now, we have to keep them. This is something that is present throughout Europe. The percentages over the next decade will show countries previously homogenous, countries like Belgium and Sweden, hitting 10 percent Muslim populations.
LEVIN: Here, it‘s only about 2 percent to 3 percent.
By the way, I‘m not advocating Islamophobia, but what I am saying is, here, we look at it more in the question of national security. I‘m talking about people who are --
MATTHEWS: OK. Quick question—we only have a minute, Brian. I got to ask a quick question. Whose fault is it? Will the Danish, those Norwegians, the Swedes, accept other people who look different than them, who had different last names? Will they accept them? Will they accept them?
And will they allow assimilation to occur over a reasonable period of time? Or is it the people coming in who don‘t want to be assimilated? Whose fault is it that they are not becoming Norwegian when they arrive in a few years?
LEVIN: I think it‘s both. I think it‘s both. We have some insular communities in Europe. But here‘s what happens—you have people who are descent, hard-working people who are caught in the middle who happen to be Muslim.
So, on the one hand, we have a precipitous increase. We have economic and demographic influences, as well as the fact that people are seeing what they consider their national heritage and culture being stripped away and are acting out in an extremist fashion because there‘s been no way it ease this in.
MATTHEWS: Yes. Boy, I wish the leaders would be leaders.
Thank you so much, Brian.
MATTHEWS: I think there‘s always going to be one in a million dangerous evil people. We saw little Hitler rise here.
Anyway, thank you so much for coming on.
LEVIN: Thank you.
MATTHEWS: When we return, “Let Me Finish” with why President Obama should make Bill Clinton treasury secretary. You hear that? Think about it.
You‘re watching HARDBALL, only on MSNBC.
MATTHEWS: “Let Me Finish” tonight with an idea. It‘s a bigger one than usual because, in many ways, it‘s a life-saver—Bill Clinton as secretary of the treasury. Let me give you the case, although I think merely the thought of it is enough to make that case.
The former president spends an hour a day right now trying to grasp the economic challenges facing our country and the world. He does it as a thoughtful person who realizes the old campaign slogan of his, “It‘s the economy, stupid,” is more vital than ever.
Here‘s a man who presided over a fabulous economic period in American history, before there was the disastrous Bush policies that brought us the catastrophe in 2008.
Long before there was the current job poor recovery, we saw daylight. We had new products out there. People wanted it buy them. We had new jobs, 23 million of them in the 90s, and we had hope. Why not bring it back?
The politics, think about it, with Bill Clinton at Treasury and Hillary Clinton still in State, President Obama would be in sterling shape to hold the Democrats next time and bring confidence to the political middle and perhaps given the weak Republican line-up, puke some from the other party come next November.
I recommend this appointment for the reason that the country needs a strong economic spokesman who can translate the complicated economy into words and experiences that the average American can grasp.
Before we can recover, before we can find confidence to act, we need to know what we‘re facing, what we‘re overcoming, and how we can succeed in this new world order. One person has the brains, the bona fides, the political moxie, the charm. And let‘s face it, the hard economic track record to do it. Let‘s bring back Bill and put him in Treasury where everything he‘s done, learned and achieved will work for him, the country and our children‘s future.
On this idea—though it is my own—I say, hip, hip, hooray!
That‘s HARDBALL for now. Thanks for being with us.
More politics ahead with Al Sharpton.
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