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'Hardball with Chris Matthews' for Thursday, January 5, 2012

Read the transcript to the Thursday show

Guests: Chuck Todd, John Heilemann, Joe Scarborough, Mika Brzezinski, Michael Isikoff, David Gregory, John Harris, Steve King, Debbie Wasserman Schultz, David Yepsen

CHRIS MATTHEWS, HOST: The politics of destruction.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Des Moines, Iowa. This is
Dresden in 1945 following the intensive Allied bombing campaign in World
War II. And this is Des Moines right now following an equally intensive
negative TV campaign.

The campaign has been carried out by wealthy contributors to Mitt
Romney. The target on the ground is the candidate who was just weeks ago
running ahead of him in the polls here and countrywide, Newt Gingrich. A
month ago, he was at 33 percent. This weekend, he was down to 12 percent.
The only justice here is personal, that Gingrich himself has been 1,000
percent behind the court decision, Citizens United, that made this kind of
weapon legal.

The question is, is Romney`s only real threat for the nomination now
dead, or can he bounce back in the coming twin debates in New Hampshire?
Can Newt Gingrich resurrect himself one more time, or is Romney`s only
serious obstacle to the nomination that pair of Ricks that remain in the
race, Santorum and Perry? With Bachmann in trouble here and Huntsman
hanging on in New Hampshire, that`s what this contest has come down to. So
is Gingrich able to carry on the fight, or has the bombing of Des Moines
killed him for good?

Chuck Todd is NBC`s political director and chief White House
correspondent, and John Heilemann is national affairs editor for "New York"
magazine, and of course, an MSNBC political analyst.

Chuck, let`s just talk about what were the two leading candidates
coming into Iowa, Gingrich and Mitt Romney. Will that battle continue
after this, or has Newt Gingrich been mortally wounded here?

you know, Rick Perry said today he`s on Omaha Beach, so the World War II

MATTHEWS: Yes, well, I think it`s more Dresden.

TODD: ... are all there. I think Gingrich is determined to get a
little payback in New Hampshire, a little bit. Call it channeling an inner
Bullworth, call it Dole `88, where Dole famously said, Stop lying about my
record. Newt almost did that today in that CBS interview with our old
friend, Norah O`Donnell.


TODD: And so I think he`s looking for a little payback. He`s a
little bitter because he tasted it. You know, I don`t know if he ever
really believed he had a shot at the nomination...


TODD: ... when he got in. And then, he got there. You know, it`s
sort of -- he was reaching for it and he realized he could touch it, and
then it all collapsed...

MATTHEWS: But objectively, Chuck...


TODD: ... so there`s the bitterness.

MATTHEWS: Objectively, Chuck, we`ve watched an air campaign here of
destruction that`s been about $3 million. It`s basically destroyed
Gingrich in the polls. Meanwhile, Mitt Romney has walked around this
state, looking like a million bucks...

TODD: Right.

MATTHEWS: ... with his hands clean, basically singing "America the
Beautiful" without any negativity.

TODD: But by the way -- but by the way, everybody had the same rules.
It`s not as if Mitt Romney`s playing...

MATTHEWS: Yes, but these are new rules.

TODD: ... a different...

MATTHEWS: But these are new rules.

TODD: They`re new rules, but Newt Gingrich was somebody who has his
own set of wealthy friends who have helped him with his political career
and his political 501C3s in the past and those things. So he could have --
he just didn`t have the resources and the infrastructure.

I mean, look, this is a -- presidential politics is a zero sum game.
Mitt Romney has built an infrastructure and a campaign for the long -- look
at him today. He`s like an aircraft carrier, in some ways, compared to the
others. So here we`re talking about, Can Santorum get momentum out of here
to go to New Hampshire and move on? Meanwhile, Mitt Romney`s announcing a
campaign schedule this week that`s New Hampshire and South Carolina and
putting on a near million-dollar TV ad buy in Florida.

MATTHEWS: So he`s an aircraft carrier and they`re PT boats.

TODD: Yes.

MATTHEWS: Let me ask you about Newt Gingrich again because Gingrich
has a Freddy Krueger quality. He`s willing to come back and back and back.
Can he come back with a knife on issues like abortion rights and paying for
abortions up in Massachusetts? We didn`t even know about that until
recently. That`s been ripped up -- ripped out into the public.

Can he keep up the fight, even though he`s been basically brought to
maybe fourth or fifth place possibly tonight? We don`t know.

he is bound and determined to do that. I think to Chuck`s point, the thing
that hurt Gingrich so much was that after -- when his campaign kind of
collapsed back in May and June, it was months then when he couldn`t raise
money. And only in December, when he had his surge, did the money come in.
So now he`s got some money. He`s raised, he says, $9 million in the fourth
quarter of this year. Not all -- he`s going to have to spend some money to
raise that. He doesn`t have $9 million on hand. But he`s got...

MATTHEWS: Does he have super-PAC money that can hit Romney as nastily
as Romney hit him, without his fingerprints on it?

HEILEMANN: Well, I think that that almost doesn`t matter because what
the question now is, is, what does the conservative movement do about Mitt
Romney? If Mitt Romney wins in Iowa, and New Hampshire just becomes a
gimme for him, South Carolina, the state that has determined every
Republican nominee in the modern era...


HEILEMANN: ... is going to be -- you think this is Dresden, that`s
going to be Hiroshima. And he is going to -- Gingrich is determined in
these four debates -- there`s two in New Hampshire, there`s two in South
Carolina. He personally is going to do something to Romney that no one has

Romney has not had a single negative ad run against him in this entire
year. He`s never...

TODD: In a sustained way, yes.

HEILEMANN: He`s never faced a sustained negative assault...

MATTHEWS: Here he is...

HEILEMANN: And the question is, does -- and this is a question that
everyone has asked for a year. Does Mitt Romney have a glass jaw or not?


HEILEMANN: We don`t know yet. Newt Gingrich is going to test that.

MATTHEWS: Well, here he is unleashing what he is probably going to
use as his message. Here he is in an interview with CBS today. Gingrich
called out Romney for the super-PAC negative advertising and what he says
is Romney`s lack of candor. Let`s listen here for the possible campaign


NORAH O`DONNELL, CBS NEWS: I have to ask you, are you calling Mitt
Romney a liar?


O`DONNELL: You`re calling Mitt Romney a liar?

GINGRICH: Well, you seem shocked by it, but yes. This is a man whose
staff created the PAC. His millionaire friends fund the PAC. He pretends
he has nothing to do with the PAC. It`s baloney. He`s not telling the
American people the truth.

I don`t think he`s being candid, and that`ll be a major issue from
here on out for the rest of this campaign. The country has to decide. Do
you really want a Massachusetts moderate who won`t level with you to run
against Barack Obama, who, frankly, will just tear him apart? I mean, he
will not survive against the Obama machine.


MATTHEWS: Now, this has been compared, guys, to what Bob Dole said...

TODD: Right.

MATTHEWS: ... to George Herbert Walker Bush. But there`s a real
difference on two levels. One is he`s not claiming that in this case,
Romney`s lying about his record, Gingrich`s, he`s lying about his own
reality. He`s claiming to be a conservative when everybody in
Massachusetts knows he was pro-abortion in terms of this funding bill we
didn`t even know about, in terms of putting Planned Parenthood people on
this commission, in terms of health care. He was -- in everything, he was
a moderate. That`s why he got elected to Massachusetts.

TODD: You know, it`s funny. I do think something does change tonight
with Mitt Romney, and that is -- because you hear Rick Santorum actually
has been talking about health care and saying, you know, That`s one of the
biggest issues I want to discuss.


TODD: And by the way, the Massachusetts health care plan was sort of
the arche -- you know, was sort of the model...


TODD: ... for President Obama`s plan. And he wants to go after that.
Gingrich wants to go after -- I do think after tonight, for the first time
in this campaign cycle, Mitt Romney then will be a collective target of
Rick Perry, of Newt Gingrich, of Rick Santorum in a way that he hasn`t --
hasn`t happened before. Santorum will be doing it fully in New Hampshire,
with Newt a little bit. Perry will be doing it fully in South Carolina.


TODD: But I tell you, you keep splintering this conservative vote,
and all of a sudden, we`re going to look up and realize Mitt Romney`s done
something he didn`t do four years ago. Mitt Romney may win Iowa. Mitt
Romney may win New Hampshire.


TODD: Mitt Romney may finish second in South Carolina.

MATTHEWS: And you just gave the number problem out (ph). If he keeps
winning with 25 percent, sooner or later, the conservatives are going to
realize they`re about to outsource their nomination.

HEILEMANN: And this is the question. This is what Romney wants to
set up. He wants -- he loves this outcome. If Santorum is the main
conservative coming out of Iowa...

MATTHEWS: Right. Sure.

HEILEMANN: ... he could -- he thinks he can -- they think that he can
replicate the Iowa result in South Carolina, splinter conservative

MATTHEWS: Well, let`s wait tonight...

HEILEMANN: ... Romney wins...

MATTHEWS: ... and see how good that result is. If he only gets 25
tonight, does he want to replicate that?

HEILEMANN: Well, he might be able to win South Carolina with 25, 26,
27 percent if it`s splintered enough. So that`s why the question becomes,
Does -- is there enough of a conservative movement infrastructure that has


HEILEMANN: ... that says, We must stop Romney? Does it rise up and
does it put pressure on either Gingrich or Perry to back out?


HEILEMANN: Does it rally around one? I don`t know the answer to that
question, but that is key.

MATTHEWS: OK, let me ask you this. Is there any indication that the
conservative base of the Republican Party today -- we`ll see it tonight
with clarity -- is moving toward being comfortable with Mitt Romney?

TODD: Yes. And in fact, this is the part of -- what I`ve noticed in
our polling over the last two months was, for instance, when Newt Gingrich
was surging, second choice -- the second choice of Gingrich supporters was
Mitt Romney, not Rick Perry, not Rick Santorum.

MATTHEWS: And how do you explain that? He`s not a conservative.

TODD: What it is, is, you explain it where they`re getting
comfortable -- they are OK with him. Look, I talked to plenty of Iowans
over the last -- John and I have both been out here a week, three or four
days longer than most of the crowd, I think, that has come in. And when
you see some of them, they say, Oh, I guess I`m for Romney. I`ll be OK
with that.



MATTHEWS: What`s that tell you?

TODD: Well, it tells me he might not win tonight because you can`t
just have the -- the casual voter doesn`t remember to come at the assigned
time, you know, and show up there, the casual -- if this were a primary,
it`d be over, OK? Romney would win by 10 points if this were a primary
tonight because over a 13-hour period during the day, the "I guess I`m for
Romney" voter...

MATTHEWS: OK, so Romney...

TODD: ... would show up.

MATTHEWS: You agree that Romney`s sort of catching on, acceptable
now, if not in love with him?

HEILEMANN: I think that it`s gradually happening, and it`s actually -
- he`s also doing surprisingly well with evangelicals here in the state.
He`s -- I think (INAUDIBLE) he`s second or third among evangelical voters,
which people said...


MATTHEWS: OK, I haven`t seen any numbers. Maybe you guys seen some
numbers. We don`t know any numbers. But the question everybody figures
tonight, it`s going to be one of three people tonight. We all figure,
based on all the polling, and it`s been pretty consistent, Romney, Ron
Paul, and Rick Santorum. And so the three of them.

Now, let`s ask about -- we know Romney may be catching on. We`ve gone
through him. Does Rick Santorum become a real threat to him?

HEILEMANN: I don`t think so.

MATTHEWS: Nationwide.

HEILEMANN: I don`t think so.

TODD: I don`t think so, but this is a guy that has -- can speak to
the blue-collar populist streak that is inside this Republican Party, that
Buchanan was able to grab, and at least make some noise for a while. So he
could do better than people think in New Hampshire.

MATTHEWS: OK, what about Ron Paul? Is he always going to be the
libertarian and the anti-war guy in a party that`s basically not
libertarian and pro-war?

HEILEMANN: Yes. And I think -- I mean, look, I think he`s the
candidate with the highest floor and the lowest ceiling. And we`re going
to see -- he`s going to be somewhere tonight -- I guarantee -- somewhere
between 18 percent and 23 percent. He`s never going to get more than 25
percent of the vote and...

MATTHEWS: Is he a leader of the Republican Party or not?

HEILEMANN: No, he`s a leader of the libertarian movement in the

TODD: Yes, the key now, though, is Mitt Romney doesn`t want to chase
him out of the party.


TODD: The whole game is going to be...


TODD: Well, correct, chase him out of the party and somehow get Ron
Paul running as a third party.

MATTHEWS: That`s a disaster.

TODD: He wants to keep him in the tent. And I think it`s
interesting. Notice how Mitt Romney has been very careful. He doesn`t
attack Paul with the fervor that everybody else does.

MATTHEWS: And he doesn`t attack Santorum, either.

TODD: He`s always thinking about November.

MATTHEWS: He would like a three-way race right until the end,
Santorum and Ron Paul.

TODD: No, no. No, no, no, no. He doesn`t want that for very long.
I think what you`re likely to see is Jerry Brown/Bill Clinton come
February, March, and April, which is, in this case, Ron Paul/Mitt Romney,
where Mitt Romney just accumulates all the delegates, but Ron Paul hangs
around a while, grabs a caucus or two...


MATTHEWS: OK, let me ask you something...

HEILEMANN: ... that was really important...

MATTHEWS: OK, I want to ask...

HEILEMANN: It`s, like, the most important thing facing Mitt Romney...


MATTHEWS: I`ve got Joe Scarborough, our colleague, coming on here
later in the program, on HARDBALL in this hour. And I want to ask him
something because he has said, basically, if Mitt Romney gets the
nomination, the door is open, basically, to a third party because he`s too
centrist. He`s too liberal, if you will, by conservative standards, to be
their standard-bearer.

HEILEMANN: Look, it is weird that the Republican Party, which has
become an incredibly conservative party, that won over the House of
Representatives in 2010 on the backs of the Tea Party, that is the kind of
party it is now -- Mitt Romney does not fit that party like a glove.

MATTHEWS: So what happens?

HEILEMANN: And so it`s hard -- like, this is a historical matter. It
seems strange that he could be the nominee, given where the party is.

MATTHEWS: Doesn`t that leave a lot of room, maybe 30 percent, 35
percent of the populists to his right?

TODD: It could. I think it`s more somewhere between 15 to 20. It is
a smaller portion. But look, 5 to 8 percent would cost him...


TODD: ... would be a landslide for President Obama. A landslide!

MATTHEWS: I keep thinking, if somebody can get into the national
debates, the three of them, come this fall, the commission debates...

TODD: Threshold is up to 15 percent...


MATTHEWS: It`s pretty close to that.

TODD: Pretty high.

MATTHEWS: Can somebody meet that?

TODD: I -- we`ll see. This Americans Elect -- there`s a lot of egos
running around. We`ll see. I guess I don`t buy that anybody will...


HEILEMANN: And it is explicitly designed to create -- I mean, you
have to have a balanced ticket ideologically.


HEILEMANN: You can`t have a conservative with a conservative. That`s
not what the Americans Elect thing...


MATTHEWS: For a year, I`ve been saying on this program, I can`t see a
bunch of red-hot Tea Party people down in Tampa come this September, when
it`s 100 degree humidity down there, 100 degree temperature, in some big
auditorium, going crazy over Mitt Romney.

TODD: Well, you know, and this is a weird challenge Mitt Romney`s
going to have. Let`s say he wraps this up in January, but it`s not
technically, but effectively has wrapped this up. He can`t do what
Republican nominees in the past have done, which is immediately start
moving back to the middle.


TODD: You know, he`s been trying to move -- he`s got to always be
mindful of not making them mad. It makes for an awkward five months...

HEILEMANN: To be able to get those delegates.

MATTHEWS: A slow turn.


HEILEMANN: ... got to collect those delegates...

MATTHEWS: I still think there`s something troubled in the waters
here. Anyway -- I`m not sure if Mitt`s their guy. Anyway, thank you,
Chuck Todd. Thank you, John Heilemann, the greatest.

Coming up: What will actually happen if Mitt Romney wins the
nomination? As I said, will there be a split in the Republican Party?
That`s our question for Joe Scarborough and Mika Brzezinski coming up next.

You`re watching HARDBALL, live from Des Moines, Iowa, only on MSNBC.



JOE SCARBOROUGH, CO-HOST, "MORNING JOE": The Republican Party, just
like I said when Newt Gingrich was at 38, 39 percent, wasn`t going to stand
for that, they`re not going to stand for the guy that has a 24 percent
ceiling walking away with their nomination. Anybody that thinks that it`s
going to be over after Iowa and New Hampshire if Romney wins does not
understand the conservative base. There will be blood if Mitt Romney seems
like the guy that`s going to walk away with it!


MATTHEWS: "There will be blood!"


MATTHEWS: Anyway, we`re back. And that was my colleague, Joe
Scarborough, yesterday painting a not-so-rosy picture of what would happen
if Mitt Romney coasts to a victory in this nominating fight while so many
in his party remain deeply opposed to him.

If that were to happen, would it split the party, maybe even setting
the course for a third party run? Well, here he is joining us right now to
discuss the state of the Republican Party and his own thoughts, "Morning
Joe" himself, Joe Scarborough, and his partner in crime, Mika Brzezinski.
Thank you, Mika.

I`ve got to go with him first because you have now laid down the

SCARBOROUGH: Right. Exactly.

MATTHEWS: The track says the party will explode if it`s Mitt because
Mitt is not enough conservative for the conservative party in this country.

SCARBOROUGH: Am I allowed to do what Mitt does and take back my


SCARBOROUGH: ... like he did this morning?

MATTHEWS: No because you`re a colleague and colleagues tell the



SCARBOROUGH: First for me.

MATTHEWS: So what do you think?

SCARBOROUGH: I think that you have a Republican Party that is badly
scarred by a decade of George W. Bush`s leadership. You remember in 1999
what we were doing? We were talking about small government. We, along
with Clinton, balanced the budget, and we also -- we talked about restraint
in foreign policy.

And yet George W. Bush got elected. We took a $155 billion surplus to
a $1.5 trillion deficit. He doubled the national debt, military
adventurism across the globe.

The Republican Party -- no, let me take that back. The conservative
base is not going to have a replay of George W. Bush. They`re not going to
have a replay of John McCain. And they`re not going to sit back and just
allow Mitt Romney to coast to the nomination.

Does that mean that Romney can`t make the sell with the conservatives?
No, I`m not saying that at all. But his focus after he wins Iowa and New
Hampshire, if he does, better be to win over the conservative base and
convince them, I will not be George W. Bush. I will not be John McCain.

MATTHEWS: But we know Herbert Walker Bush, the first President Bush,
did the same exact thing you prescribed, "Read my lips, no new taxes," and
then he did it!


MATTHEWS: So he did promise.

SCARBOROUGH: ... yet another reason for conservatives to feel burned.
Listen, Chris...

MATTHEWS: Why would you believe that a man who was a moderate
governor in Massachusetts, who did all this with health care and abortion
rights and funding and all those things, which the conservatives in this
country, including a lot of independents, don`t like...


MATTHEWS: ... is going to change somehow and become a Barry Goldwater

SCARBOROUGH: For the same reason that a lot of conservatives saw a
guy named Ronald Reagan, who signed an abortion bill in California, who
actually was skewered by the hard right for spending too much money,
allowed taxes to be increased in California. When he came -- when he
became president in 1981, he found his conservative voice. I see you

MATTHEWS: Because I...


SCARBOROUGH: I`m not spinning here.


BRZEZINSKI: He`s turning his back to you.


SCARBOROUGH: ... that`s his argument.


MATTHEWS: That`s his argument.

SCARBOROUGH: No, no, no, I`m not spinning for him. I`m saying,
that`s his argument.


MATTHEWS: We knew Ronald Reagan.


MATTHEWS: You were friends with Ronald Reagan.

SCARBOROUGH: A personal friend of mine.

MATTHEWS: Let me tell you, this guy Mitt Romney is no Ronald Reagan.

BRZEZINSKI: Well, I was just about to say, you both knew Ronald
Reagan. Are any of these candidates Ronald Reagan?


MATTHEWS: Well, even ideologically, I don`t think so.

BRZEZINSKI: No, but, also, let`s talk about where we are right now.

People are undecided. We have got congressmen, Iowa congressmen who
can`t make a decision on caucus day, Chris Matthews.

MATTHEWS: And it`s 20 after 4:00 their time.

BRZEZINSKI: This is a boring field.

MATTHEWS: A boring field.

BRZEZINSKI: This is seriously -- it`s deadly. It`s deadly.


MATTHEWS: You know what it reminds me of? Replacement year in the

BRZEZINSKI: Yes. Well...


MATTHEWS: Remember replacement year, the Gene Hackman movie?

SCARBOROUGH: Yes. Oh, I know.

BRZEZINSKI: It`s a far cry from four years ago. And I think we`re
all feeling that, as members of the media, since we, first of all, in

MATTHEWS: We want a better show.

BRZEZINSKI: ... we outweigh the people at the events.

SCARBOROUGH: And, by the way, it`s not -- we`re not just talking
about the Democrats. Anybody that saw Mike Huckabee work a crowd, deliver
a speech...

BRZEZINSKI: Exactly, great characters.

SCARBOROUGH: ... you would sit there, Chris -- and Pat Buchanan
always talks about political athletes.


SCARBOROUGH: We don`t have political athletes in this field this
year, whereas, four years ago, they were all over the place.

MATTHEWS: Did you see Christie out here, Governor Christie of New


SCARBOROUGH: There is a political athlete.


MATTHEWS: People close to me, without naming them, called me up and
said, now, there is a politician.

SCARBOROUGH: There is a politician.

But they`re failing on every -- in every respect. It`s not just that
they aren`t gifted speakers. It`s that they`re not organizing, it`s that
they`re not putting up yard signs, it`s that they`re not putting up funds.

I had one guy tell me today that he wanted to support Newt Gingrich.
He said to him, hey, Newt, I want to support you, can I have a button?
Newt said, yes, you can go on and buy it for $4.

BRZEZINSKI: Four dollars for a button.

MATTHEWS: OK. Let me ask you about what I brought up in the first
part of this show which bothers me. If you run a negative ad in the past
in Iowa, people would watch it and say, boy, that`s nasty of you to do
that, and it would probably flash back and hurt you a bit. There would be
a price paid. At least 40 to 50 percent would go back negative and you
would have to pay a price. Every time you whacked your opponent, you would
get hurt a little bit. Right?


MATTHEWS: Some gunpowder would lay on you.

This time around, with this Citizens United new court finding, you
could run in this case $2.8 million in advertising, as Romney`s friends are
doing, against Newt Gingrich, destroying him, without any fingerprints from

Is that good for politics that you can destroy an enemy with a hidden

SCARBOROUGH: No, I don`t think so. And I think it`s safe to say
anybody that`s watched my show knows I have not been nice to Newt Gingrich
over the past month.



SCARBOROUGH: And, yet, I started saying a week ago, there was
something wrong with all of these super PACs being able to team up on this

If Newt Gingrich is going to lose, I want Newt Gingrich to lose on the
debate stage, one on one, with a party of ideas.


MATTHEWS: You`re with me.

BRZEZINSKI: Wait a minute, is there anything wrong with these ads?
Is there anything incorrect?


MATTHEWS: No, it`s just that you can trash an opponent in tone. You
don`t even have to factualize.

BRZEZINSKI: You said this on the show.

MATTHEWS: Well, isn`t it true?

BRZEZINSKI: Well, if the information is correct, I think it...


MATTHEWS: Do you want this done in the general election?

OK. Let`s look at the preview, coming attractions. We have got a
general election coming where President Obama is able to raise, what, $1
billion. How much of that is super PAC money? How much is going to have
his fingerprints on it? And he can waste Romney without anybody saying who
did it. Is that OK?

BRZEZINSKI: The process has flaws, but I want to know if these ads
about Newt Gingrich have anything incorrect in them, because it seems to me
there is a responsibility for people to fully understand this guy who seems
to be surging in the polls, which I still can`t believe. He`s now losing
it, which makes more sense to me.


SCARBOROUGH: At the same time, though, Chris, you`re exactly right.
Barack Obama loves to say, I`m not raising a lot of money from Wall Street,
of course. But the DNC is.


SCARBOROUGH: The super PACs will.

MATTHEWS: We`re going to actually get to that in the show tonight.

SCARBOROUGH: And the super PACs are going to be -- going to be
getting tens of millions of dollars for Barack Obama. It`s going to be
Wall Street money, just like Republicans...


MATTHEWS: We`re getting to this. We`re getting to this.

BRZEZINSKI: Oh, lordy.

SCARBOROUGH: And then they`re going to use Wall Street money to
destroy the Republican candidate, and then claim that the Republican
candidate is somehow enslaved by Wall Street.

MATTHEWS: As part of our program of reaching all the erogenous zones
of American politics, we`re going to hit this, baby.


MATTHEWS: We will hit that very point that it`s the DNC that`s going
to -- we will have Debbie Wasserman Schultz explain if that`s a good
policy, to have the DNC do their dirty work.


MATTHEWS: Well, she will be on to talk to us, because we try to do it

Joe and Mika, you had a hell of a show. I love being at Java Joe`s.

SCARBOROUGH: We love having you there.

MATTHEWS: What came first, "Morning Joe" or "Java Joe`s"?

SCARBOROUGH: Actually, "Morning Joe," but just barely, because Java
Joe`s is really when we launched.

MATTHEWS: I love it, Jerry Bruno (ph) techniques, jam people -- a
thousand people in a room that only holds a hundred. Make it look like
there`s a thousand outside trying to get in.


BRZEZINSKI: We love having you here.


MATTHEWS: We are going to talk coming up about the barrage of ads
aimed at Newt Gingrich that have been unleashed out here this past week.
They have done their job. We`re going to look at the devastating effect
and the whole question of the law that permits it.

You`re watching HARDBALL from Iowa, only on MSNBC.



One of the most compelling stories of the Iowa caucuses so far has
been the relentless barrage of attack ads that took down Newt Gingrich, the
majority of which came from the pro-Romney super PAC called Restore Our

Well, this is a sample you`re going to see right now of what`s been
blanketing the airwaves out here in Iowa.


NARRATOR: Newt has a ton of baggage. He was fined $300,000 for
ethics violations and took $1.6 million from Freddie Mac before it helped
cause the economic meltdown.

Newt supports amnesty for illegal immigrants and teamed with Nancy
Pelosi and Al Gore on global warming.

NARRATOR: Ever notice how some people make a lot of mistakes?


I made a mistake.

I have made mistakes at times.


You know what makes Barack Obama happy? Newt Gingrich`s baggage.
Newt has more baggage than the airlines.

As conservative "National Review" says, "His weakness for half-baked
and not especially conservative ideas made him a poor speaker of the house.
He appears unable transform, or even govern, himself."

Newt Gingrich, too much baggage.

Restore Our Future is responsible for the content of this message.


MATTHEWS: So, did you hear that tagline: "Restore Our Future is
responsible for the message"?

Of course, Mitt Romney`s hands are completely clean of these ads, and
all those ads aired in December, to devastating effect, taking Newt
Gingrich, as I said before, from the 30 percent level down to the teens
level, a loss of about 20 percent, and basically taking him out of the

Michael Isikoff is an NBC News national investigative reporter, and
John Harris is of course the editor in chief of Politico.

It seems to me, Michael Isikoff, that this is going to be message out
of Iowa, the power of these third party or super PACs, where you don`t have
to put the candidate`s name on it, you don`t put the names of the
contributors on it, the money is unlimited, and you can basically destroy
your opponent if you have got enough rich friends. Legal, right?

MICHAEL ISIKOFF, MSNBC CONTRIBUTOR: Absolutely, under the Supreme
Court ruling Citizens United last year.

And I think this is more than the message out of Iowa. This may be
the message of this campaign. Two figures really leap out after seeing
those ads, $2.8 million, nearly $3 million. That was how much was spent on
TV ads by Restore Our Future, the super PAC -- $1.5 million, that was spent
by the Romney campaign.

So the super PAC, the Romney super PAC, spends nearly twice as much as
the actual presidential campaign of the candidate himself. That tells you
a lot about the direction of this campaign, the role of these super PACs,
how they are going to be the dominant force in this presidential election.

MATTHEWS: Of course, the great irony is the people on the right, like
Gingrich, basically supported that court decision. They thought it was
free speech. Money is speech, as they see it.

And yet it is basically -- it could have destroyed his campaign. We
don`t know until we see the results tonight, but he could come in fourth or
fifth tonight, after this pummeling he took out here.


Those ads were devastatingly effective, but I think they were
effective for a couple of reasons. One, they were reinforced by a similar
attack that was coming from Ron Paul. And the other is, a lot of the
charges in those ads, the truth stings. It wasn`t like these were wild
distortions. That was, in fact, a pretty fair critique of Gingrich`s

It wasn`t one of those situations where something is just taken whole
cloth or distorted in a really powerful way.

MATTHEWS: Suppose the same amount of money was spent by a super PAC
on behalf of Newt Gingrich that basically destroyed Romney as a guy that
supported taxpayer-funded abortions, you know, did the whole thing with
health care up in Massachusetts, was a life -- was a moderate up there, and
then said he`s masquerading now as a conservative. Would that have been as
effective, if he had that kind of money throw at these ads?


HARRIS: Well, yes, I`m sure it would have resonated, particularly
with conservatives who were very receptive to that message.

What you don`t have and why it is somewhat disturbing is you don`t
have accountability. Candidates should own their messages.


MATTHEWS: That`s what I think.

HARRIS: You should have accountability. All the efforts to reform
campaign finance actually have diluted what I think is the most important
principle, which is accountability. Stand behind your words.

MATTHEWS: It`s one thing to have free speech, but don`t have your
body and name attached to the speech.

One of the founders, by the way, of the pro-Romney PAC Restore Our
Future is Larry McCarthy, who produced that awful 1998 Willie Horton ad.
Let`s listen to that baby from the past.


NARRATOR: Bush and Dukakis on crime. Bush supports the death penalty
for first-degree murderers. Dukakis not only opposes the death penalty.
He allowed first-degree murderers to have weekend passes from prison. One
was Willie Horton, who murdered a boy in a robbery, stabbing him 19 times.


MATTHEWS: Well, that was a pretty effective ad, wasn`t it, Mike

ISIKOFF: Yes, it was.

MATTHEWS: And that`s why -- and one of the producers is the guy who`s
bringing us this set of ads for Romney.

ISIKOFF: Right. There is something coming full circle here.

But, look, the Willie Horton ads is one of those iconic moments in
American politics that everybody remembers because it was so effective.
And I think that this -- you know, the Newt Gingrich ads, the attack ads
run just over the last month may rank right up there, showing, vindicating
the power of negative ads.

I want to just pick up on something you were talking about before with
John, about, you know, accountability for these things. The super PACs are
supposed to be independent. They don`t coordinate.


ISIKOFF: But, look, the -- Restore Our Future is founded by three
former Romney political aides. One of the chief fund-raisers for the
Romney presidential campaign leaves the campaign and then goes to work for
Restore Our Future. Romney himself speaks at fund-raisers over the summer
for Restore Our Future.


ISIKOFF: So that tells you a lot about the connections between the
campaigns and the super PACs. They`re very closely related. And when the
candidate himself speaks at it, he`s giving his implicit blessing, telling
big donors out there, this is where I would like the money to go.

MATTHEWS: Yes. And Jim Baker, running the senior Bush`s campaign
back in 1988, never called up the McCarthy people, the people running that
American security agency campaign that was run, all those dirty ads. They
never called up and said, please stop those dirty ads. They`re hurting us,
because they liked those ads.

Anyway, thank you, Michael Isikoff.

Thank you, the great John Harris of the great Politico.

HARRIS: See you, Chris.

MATTHEWS: Up next: Just hours away from the results of the Iowa
caucuses tonight, what can we expect to see tonight? A guideline to
tonight`s events -- coming up here on HARDBALL.

You`re watching it, only on MSNBC, on caucus night.


SEEMA MODY, CNBC CORRESPONDENT: I`m Seema Mody with your CNBC "Market

The Dow surging 179 points today, the S&P 500 up 19, and the Nasdaq
gaining 43. Encouraging economic data giving stocks a boost. Construction
spending jumped in November, up 1.2 percent, as builders broke ground on
more single-family homes and apartments. It was the biggest gain since
June of 2010.

The nation`s factories also brought a bright spot for today, the
December report from the Institute of Supply Management showing
manufacturing activity rose to 53.9 percent. A reading above 50 does
indicate growth. And the Federal Reserve will soon be updating investors
four times a years about the short-term interest rate outlook. According
to minutes released today, the Central Bank may also be considering new
steps to help boost the economy.

And Starbucks shares ending the day lower, the company saying today
they will be charging more for coffee in the Northeast and the Sun Belt.
The coffee giant blames the increase on higher commodity costs, as well a
other revenue cost generations.

That`s it from CNBC, first in business worldwide -- now back to you on

MATTHEWS: Welcome back to HARDBALL tonight.

It`s been a long, strange journey out here in Iowa. But here we are,
just hours away from the Iowa caucuses. We`re going to look into exactly
what we can expect tonight right now, and what kind of boost, perhaps, Iowa
might provide to the various campaigns.

Steve King is a Republican U.S. congressman from Iowa, where he serves
right now. And David Yepsen is the longtime, perhaps permanent, well,
expert out here. He`s director of the Paul Simon Public Policy Institute
at Southern Illinois. He`s a veteran reporter of Iowa politics.

Congressman, I know there`s been a lot of talk about indecisiveness.
I`m going to measure yours. You`re going to the caucuses tonight, right?


MATTHEWS: In a couple of hours, right?

KING: Mm-hmm.

MATTHEWS: Who are you going to vote for?

KING: Well, I haven`t made a decision. And I thought...



MATTHEWS: Wait a minute. You know these guys.

KING: I have decided not to make a decision, and it`s definitive.

MATTHEWS: But when are you going to make a decision?

KING: Well, I made a decision yesterday that I wouldn`t do an

And, so, once I reached that level of not doing an endorsement, it
really would be foolish to say what decision I might have made.

MATTHEWS: How can you expect the Republican electorate out there, who
you will call upon to vote for the Republican nominee come next November,
when you, a professional, a public official, can`t bring -- summon up the
excitement to say you`re excited for this person?

KING: I am excited. And I can sum it up this way -- and that is,
the Founding Fathers envisioned that we would get together and have
meetings and have engaging dialogue, and we would make decisions actually
in the room, after we waived the wisdom of our colleagues. And there will
be a lot of wisdom waived tonight.

MATTHEWS: But the first thing you do when you go in there is vote.
The first thing you do when you go to these caucuses --


MATTHEWS: Oh, yes. OK. Let me ask you. Is this congressman a good
representative to the state right now in terms of indecision? I saw a
number today that 41 percent of the people, like, going into the day,
today, haven`t made up their mind yet?

You know, I do think they take this very seriously. It`s been a hard
decision for Republicans. They like a lot of the candidates, so they`re
trying to sort it out.

But there is also something to be said, Chris, for sitting down and
talking with your neighbors. You know, those people influence your
decision a lot --

MATTHEW: Tonight.

YEPSEN: -- in politics. Yes.

MATTHEWS: You mean the campaign is yet to come?

YEPSEN: They`re going to hear speeches from representatives of the
campaign. They`re going to talk to their friends, who do you think, Chris?
What do you think, Dave? What do you think of this guy? So, that`s part
of the process is --

MATTHEWS: OK, let`s -- we`re not getting anywhere here of who`s
going to win tonight.

Let`s go to this. There have been three candidates who have had very
successful campaigns so far. Let`s stimulate the fact that Romney has had
a good campaign out here. That Paul has run a very good campaign and a
long one. And Santorum may be the great hero of tonight.

They all run great campaigns. Santorum, having lost a race for re-
election in the Senate for Pennsylvania, has come back out here to possibly
winning tonight. Romney wasn`t even going to get in this race until about
a month ago. He`s here. And Ron Paul has excited this libertarian base
into probably its highest number it`s had so far.

Tell me about it. What`s that say about Iowa, that these three
people are doing well out here and the others aren`t?

KING: Well, I would say hats off to all of them for the competition
that they provided there.

And Ron Paul`s been here about five years. This is actually his
third go-around in Iowa. And so, he has invested money in here. He`s
built a good organization and they`re loyal and they`re out everywhere all
the time.

Mitt Romney has that foundation also from four to five years ago. He
had an excellent operation four years ago, and he`s reconstructed some of
that. But it`s not as good as it was four years ago.

And then Rick Santorum has gone at this the classical way, one county
at a time, every county.

MATTHEWS: Ninety-nine.

KING: And when I walk into a room in my own district and he speaks
to somebody in the front row by first name, they`re my constituent, and
I`ve never seen them before, that tells me something.


MATTHEWS: OK. Well, this morning, actually yesterday morning, Mitt
Romney confidently predicted a win in Iowa. Well, this morning, he
appeared on "MORNING JOE" and sounded on a measure cautious note --
interesting that you said it may not be as good a campaign as last time.

Let`s watch Mitt Romney, who many people consider one of the top
three finishers tonight, the way things are going in the polls.


become the nominee and I take on the White House. But at this stage, I
think it`s hard to predict exactly what`s going to happen. But I think
I`ll be among the top group. I don`t know if that`s one, two, or three.
But all three of us will get a good sendoff going into New Hampshire and
South Carolina and Florida. It`s a long road, as you know.


MATTHEWS: You know what? He won`t say, but the people I interview -
- I`ve only interviewed so many people, but the anecdotal evidence I get
out here is you ask someone why they`re for Romney, they say, I`m a
moderate. He doesn`t say it, but they do.

The people with Ron Paul are libertarians. They want government off
their back and out of their face.

And people who are for Rick Santorum are obviously attracted to his
religious commitments, right?

YEPSEN: Right.

MATTHEWS: So, there`s three different wings of the party. The
moderate business base, which is sort of the ones that show up one time for
things and get things organized. The libertarian people, who basically are
almost romantic about Barry Goldwater Republicanism, like get it, or Bob
Taft, get out of my face. And the religious people, who really think about
politics as a religious sort of commitment.

How do you put them all together?

YEPSEN: Well, first of all, every one of those groups is looking for
somebody who can get elected. I mean -- and that further complicates the
equation here. This caucus, to me, is fascinating because this Republican
Party is sorting out itself.

Where does it stand on immigration? How does it want to deal with
it? It`s a tough issue. There`s good arguments on all sides of it.

And the internationalists versus the nationalists. I mean, that`s
been a fault line in the Republican Party for generations.

MATTHEWS: Yes, sure.

YEPSEN: And so, the Ron Paul bring the troops home message against a
more internationalist view. They`re trying to sort that out. And that
adds to the complexity of trying to figure out who`s going to win this

MATTHEWS: What is the Iowa character? Is there a character that
distinguishes this state from, say, New Jersey? Massachusetts? What`s

KING: Well, one thing is, we are rooted in the land here, in a way
that`s a little bit different. And I sometimes explain "Iowa stubborn" by
knowing that those of us are decent from those who came across the prairie
in a covered wagon are here to live free or die. And they built their
foundation here out the agriculture and some industry. There`s a certain
independence in that.

The further away you are from government, the more likely you are to
be independent from government. They want that.

And we have full-spectrum conservatives here that carry about the
libertarian side. They care about the libertarian side. They care about
the side that`s more represented by Mitt Romney. But that`s something I
think is emerging in the Republican Party. I think David`s identified the


KING: But there`s emerging constitutional conservativism --

MATTHEWS: And you represent them all pretty well?

KING: -- full-spectrum constitutional conservativism --

MATTHEWS: Congressman King, we`re all watching this vote today. We
will try to -- you can call me and let me know -- let the announcer vote
tonight because it may be the leading indicator. You might be the cow bell
for which way this place is going.

Anyway, Congressman King, thank you for joining us. David Yepsen,
the monarch of knowledge out here.

Up next, President Obama`s back on the campaign trail, talking to
voters in Iowa today and Ohio tomorrow. Has the president crafted a
winning re-election strategy yet? Well, he`s had some time, over Hawaii
time, to think of it.

This is HARDBALL from Des Moines, Iowa, only on MSNBC.


MATTHEWS: We`re back.

While all eyes are on Iowa and the Republican presidential
candidates` caucus tonight, President Obama has returned to Washington,
renewed, by the way, from his 10-day vacation in Hawaii and armed with a
New Year`s resolution, obviously, to begin shaping his re-election

Well, the plan includes, apparently,, a three-pronged approach aimed
at shoring up support among the president`s supporters in 2008 and
overcoming his weaknesses, which have been exposed in his battles with

Congresswoman Debbie Wasserman Schultz is the Democratic national
chairman -- chairwoman of the Democratic Party. And David Gregory is
moderator of NBC`s "Meet the Press," and, of course, for many years, White
House correspondent.

So, we`re getting a different point of view. I want to get from you
-- can you give us -- Tom DeFrank, who`s a great reporter for the "New York
Daily News" said basically the president is going to try to do grassroots
organizing, like he did before, a lot of reviving the grassroots. I get
those e-mails, too, all those organizing emails. And also go after --
portraying the Republicans as richies, basically rich people, elitists, if
you will, and then going after Capitol Hill Republicans.

Is that a fair look at the three-pronged attack that he`s going to

are doing a good job all on their own demonstrating how important elitists
are to them and how they want to singularly focus on keeping the wind at
the backs of the wealthy and the most fortunate.

We have been like four years ago focused on standing up to the most
significant grassroots presidential campaign in history. We`ve been here
in Iowa for months. We had eight offices open, 350,000 phone calls, 4,000
one-on-one meetings -- and the one-on-one meeting for us is sitting down
with the voter, understanding what makes them tick, what`s important to
them and engaging them and getting them involved in recruiting other
people. Twelve hundred meetings like house parties and organizational

MATTHEWS: OK. Do you need Iowa come November?

WASSERMAN SCHULTZ: Iowa is part of any combination of math, and it`s
a battleground state. We`re organized in all the battleground states, and
the difference between our campaign and the Republican campaigns is we have
an appeal to working families and the middle class. And the Republicans
want to return to the same failed policies that brought us to the precipice
of economic disaster.

MATTHEWS: David, for some reason I`m on the e-mail list. I get all
these organizing things, all this social networking. It`s very exciting, I
guess, for the people involved in it. I just like to monitor it.

How does that -- how is the president going to take control of that
political operation? I haven`t seen him act as leader of the Democratic
Party, for example. I don`t sense that role. He doesn`t seem comfortable
with being head of a political party.

DAVID GREGORY, NBC NEWS: Well, I think that role is going to emerge.
I think they are going to coalesce around him. And don`t forget the
president is going to have approaching $1 billion to spend in his campaign.

MATTHEWS: In his name?

GREGORY: In his name. He`s got resources in the party`s name. He`s
going to have resources. He`s going to have organization. What he`s got
is a pretty rotten economy right now.


GREGORY: And he`s got real questions even within his own party about
his -- his own leadership, about his vision ultimately, to match up to his
potential, to his promise to be a transformational leader. And he`s going
to face a tough election campaign against potentially Mitt Romney if he`s
the nominee who`s going to at least be fighting on the train that he wants
to fight on and that`s the economy.

I don`t think there`s anybody in the White House close to the
president who doesn`t recognize this is going to be a very tough fight.

MATTHEWS: Do you think it`s going to be the same ticket this time,
Obama and Biden?

WASSERMAN SCHULTZ: Oh, absolutely. I mean --

MATTHEWS: Did you ever get those assurances from the president? Has
he ever said it to anyone?

WASSERMAN SCHULTZ: Throughout the president`s entire campaign,
organization, throughout the leadership of political folks attached to the
president, I know, I`m 100 percent confident that Joe Biden and Barack
Obama are going to run together as a team.

MATTHEWS: So Hillary Clinton --

WASSSERMAN SCHULTZ: They are governing as a team --

MATTHEWS: Secretary Clinton won`t be joining the ticket?

WASSERMAN SCHULTZ: No, I don`t believe so.

MATTHEWS: Let me ask you the negative question. Do you think we`re
going to see this --

WASSERMAN SCHULTZ: But I also want to disagree with David`s
characterization of the president`s campaign.

MATTHEWS: Go ahead.

WASSERMAN SCHULTZ: And the fact that -- I don`t know how you can
say that -- that the base -- that Democratic voters question the
president`s vision. There is such a dramatic contrast, David, between the
direction that President Barack Obama would take this country and has been
taking this country and the direction that Republicans would take us. I
mean, President Obama --

GREGORY: Hold on, hold on. I`m not a politician. That`s argument.
I`m offering analysis.

That`s a different deal. I mean, you can make your argument. I`m
just giving you analysis based on my reporting of what have the president

You`re offering argument. That`s fine.


GREGORY: I`m not here to debate you in that regard.

WASSERMAN SCHULTZ: No, no, but I need to push back.

MATTHEWS: Isn`t part of his strategy to unite his party before he
takes it into battle? Doesn`t he have to do that just as any politician
has to do that?

WASSERMAN SCHULTZ: There`s a reason that in every recent poll in
Iowa, not one in the Republican field beats Barack Obama head to head.
That`s because the American people and the Democratic base in particular
understands that Barack Obama`s in there swinging for them, standing up for
the middle class, making sure that we fight to bring the economy from
750,000 jobs lost a month to three years later, we`ve had 22 straight
months of private sector job growth. We`ve begun to turn the economy

People know that President Obama is fighting for them. They know
that any one of the Republicans, especially Mitt Romney, is fighting to
keep the back of the wealthy.

GREGORY: It is interesting, Chris, again, as a reporting matter, you
talk to Republicans, they will concede the fact that a lot of Americans
like this president personally. They like him personally. They`d like him
to succeed.

That runs counter to a lot what have you hear here on the hustings
which is, you know, we`ve got to get power back to reverse what he`s done.

MATTHEWS: Maybe it was the toughest challenge for the president is
the objective fact of the economy. And if Goldman Sachs prediction is
right, that the unemployment rate is going up to 9 percent by the end of
this year, that`s a real challenge, isn`t it?

WASSERMAN SCHULTZ: The economy and jobs is the number one issue on
everybody`s minds. The president has a record that has taken us from being
in a really impossibly difficult situation, the worst economic problem, the
worst set of problems inherited at once by any president since FDR, and now
we`ve begun to turn the corner.

What I think Americans understand that we don`t need to do is go back
to exclusively focusing on tax policy that helps the most unfortunate.

MATTHEWS: Well said.

Thank you, U.S. Congresswoman Debbie Wasserman Schultz from Florida,
and David Gregory, White House -- MSNBC -- actually "Meet the Press"

When we return, "Let Me Finish" with the power of destruction and how
money, lots of money can, destroy democracy.

You`re watching HARDBALL, only on MSNBC.


MATTHEWS: "Let Me Finish" tonight with this:

Tonight, we get a preview of coming attractions, not the fun stuff
you get at movies, not the lure of romance, the thrill of high adventure or
a Sherlock Holmes style battle of wits. No, what we`re going to get is a
preview of a 2012 presidential election in which the winner isn`t the
candidate comes off the best in debate or who woos the American people with
a brilliant campaign of persuasion and hope. No, what we`re going to see
tonight is the power of destruction, how spending millions of dollars in
negative advertising gets your guy elected, without having him take the
personal responsibility for the blood he spilled, for the attack he`s waged
to destroy his opponent.

So, get ready, set, go.

Whoever wins the Republican nomination will know what works. Kill
the rival with negative ads and get your friends, your rich friends, to pay
for it.

The victim of what happened here in Iowa isn`t Newt Gingrich. It`s
any semblance of true democracy. And what we`ve watched here is democracy,
it ain`t much. It`s not what people fight for, not what people believe in.

Mitt Romney can quote "America the Beautiful." This campaign he`s
put together has putrefied it.

And that`s HARDBALL. Thanks for being with us.

Stay with MSNBC now for full coverage of the Iowa caucuses.


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