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'Hardball with Chris Matthews' for Monday, October 14th, 2013

Read the transcript to the Monday show

October 14, 2013
Guest: Dana Milbank, A.B. Stoddard, Roger Altman, Steve Elmendorf


Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

"Let Me Start" tonight with this.


LARRY KLAYMAN, FREEDOM WATCH: We are now "ruled," quote, unquote, by a
president --

UNIDENTIFIED MALE: An imperialistic president!

KLAYMAN: -- who bows down to Allah.


MATTHEWS: Well, except for wacko-birds like that one, the rest of the
country knows it is going over an economic cliff this Thursday if the U.S.
Congress cannot seize an agreement. The tricky part is finding the right
deal that avoids hurting the Affordable Care Act in any serious way while
tagging it enough to satisfy the blood lust of the Republican right in the
U.S. House of Representatives.

Well, figuring out the first is fairly easy. The president is not going to
pay the kidnappers if they hurt his "Obama care," which leaves us with the
question of what it will take to free the baby without doing it actual

Right now, Republicans in the House are a fractured mess. The government
has been shut for 14 days. We`re now just three days from a calamitous
default, which is why tonight the action is starting in the dealing between
Senate Democratic leader Harry Reid and Republican leader Mitch McConnell.
They`re the ones now trying to assemble an 11th-hour deal that will get
through the Republican House.

According to NBC News, this is the deal currently in the works. It would
reopen the government through January 15th at current funding levels,
extend the debt limit through February 7th. As for the president`s health
care law, the deal would be a provision to establish need when it comes to
Affordable Care Act subsidies.

But earlier proposals to delay or repeal a small source of funding for the
law, called the medical device tax, has been taken off the table.

Late today, the White House postponed a meeting with congressional leaders
of both parties so negotiations had more time to play out. It remains
highly uncertain right now whether the deal as currently structured will be
able to pass the Republican-controlled House.

All this while the far right is ramping up its effort to delegitimize
President Obama, calling him a Muslim who needs to come out of the White
House with his hands up.

Howard Fineman`s the editorial director of the Huffington Post Media Group.
David Corn is Washington bureau chief for "Mother Jones." Both are, of
course, MSNBC political analysts.

Howard, it`s so interesting that as they`re working their way -- the people
who have become serious about this -- the wackos on the hard right are
going to back to the old ethnic -- This guy`s an Arab, he`s praying in
Allah, buckling to the enemies, he`s one of them.

Well, they`re being painted into a corner both legislatively and
politically around the country. What`s happening -- I was up on the Senate
side today. There`s a sense of quiet satisfaction, if not excitement, that
the members of the Senate, that the leaders of the Senate, are finally
talking and that they are putting together -- they`re the leaders putting
together the deal.

What they`re trying to do is come to a deal themselves and then figure out
how to give just enough to John Boehner that he will call a vote that will
get enough Republican support, and perhaps a good bit of Democratic
support, to pass. So all the action on the Hill is from outside that core
of rejectionists in.

MATTHEWS: Yes. So it`s solving --

FINEMAN: That`s the dynamic.

MATTHEWS: I think that`s well said. And it`s like solving a simultaneous
equation in high school. We have to get agreement from Senate Democrats,
Senate Republicans, House Democrats -- they don`t get mentioned very often,
but Nancy Pelosi is one hell of a leader -- and these far-out Republican
House members that we don`t know how far right they go and how powerful the
hard right, the crazy right, the wacko-birds are still.

to give anything or much to those far-right wacko-birds if John Boehner
puts it to the floor, where you`ll get some reasonable --

MATTHEWS: When`s he done that ever in his life?

FINEMAN: Well, he`s done it. He did it.

CORN: He`s done it three or four times when he`s gotten to these crunch
points. This -- right now, the Senate is jamming Boehner. They say, We`re
going to put together a deal that adults can agree to --

MATTHEWS: What`s in this deal for him?

CORN: I think what`s in the --

MATTHEWS: There`s no medical device thing in there. There`s something
about means testing, but they already did means testing --


FINEMAN: Double secret means testing.

CORN: There`s nothing in the deal for John Boehner except you don`t get
blamed for default. This is an escape --

MATTHEWS: So what would he have to say to his caucus when they meet
blindly and no press is in there? What would he have to say to the people
all the way from the wacko-birds to the few reasonable people --

CORN: This is what he has to say. You took a shot at it. If you only
have 40 votes in the House, you don`t get to bring the government to a
standstill --

MATTHEWS: He talks to them.

CORN: -- (INAUDIBLE) "Obama care." We will have other votes on "Obama
care." We will have legislative hearings showing that its working or not -

MATTHEWS: You think --


MATTHEWS: This is so hot. In the next two days, does he have the stuff in
him to face down the real hard right and say, You`re wrong, or you tried,
nice try, but I`m the boss?

FINEMAN: Well, what they`re trying to do with John Boehner is to build a
structure around him so that he has no choice but to be brave, if you will.
They`re trying to make it so that he`s the only person who can solve the
problem in the end.

And by the way, I think what the negotiators are also doing --

CORN: But a problem --

FINEMAN: -- is holding -- is holding back one little piece here that we
don`t know about, and maybe putting the medical device thing back in. We
don`t know.


CORN: Yes.

FINEMAN: In other words, one thing at the very end here that they can
throw to get a few more House Republicans that can seem like a concession
because a lot of this is psychological now --


FINEMAN: -- with the House Republicans.

MATTHEWS: OK, before we --

FINEMAN: They need to feel like they won something.

MATTHEWS: Hold those thoughts about what we`re fighting about here. But
as for the timetable, a friend of mine I`ve known for 40-some years now
told me that he`s -- he`s an international trader. He works overseas.
He`s afraid of we`re still screwing around in this country come Wednesday,
we could have a couple thousand-point drop in the Dow. This is serious
business if we get right up --


CORN: But the issue is how -- you know, how close we are. We`ve seen in
years past, there`s a way to signal -- and I hate using this term -- to the
markets that we`ll have everything done by midnight tonight. And the
markets --

MATTHEWS: When is that midnight?

CORN: The -- the --

MATTHEWS: Thursday midnight, Thursday 8:00 o`clock?

CORN: Wednesday midnight. And the markets have been, I think, overly
forgiving of --

MATTHEWS: Because?

CORN: -- a lot of the crap that`s going on in --

MATTHEWS: What`s their implication?

CORN: -- Washington, D.C.

MATTHEWS: Are they assuming it`ll get done?

CORN: They assume, at the end of the day, that John Boehner will be
somewhat reasonable and that if he has to tell these other guys to take a
hike, he will do that.

MATTHEWS: Where do they get that street smarts about -- it`s not their
street, it`s Capitol Hill.

CORN: Right.

MATTHEWS: I can`t figure out --


CORN: Well, they don`t believe -- suicide`s not rational.


CORN: And that`s what they believe. It`s not rational. Now, that doesn`t
mean people will do it --

FINEMAN: The other thing is --


FINEMAN: In terms of timing, the first -- the first hurdle for the Senate
leaders is that they need to get a deal and get it on the floor in time so
that even if one of the Tea Party people on the Senate side, like Ted Cruz,
for example, objects --

MATTHEWS: How long could he slow it down?

FINEMAN: Well, he can slow it down for 30 hours. So they want to try to
get it out there tomorrow for a vote, if they can, or by tomorrow night at
the latest so that that time runs. And then -- then -- then -- the thing
that --

MATTHEWS: You heard what he said.

FINEMAN: The thing that the Senate Republicans get out of this -- the
Senate -- you said, Who gets what?


FINEMAN: Well, the president gets no monkeying around with "Obama care,"
basically. And "Obama care" is not tied to either the continuing
resolution or the debt ceiling. That`s what the president wants. That`s
what he`s getting. And that`s the big loss for the Republicans here.

The Senate Republicans get a sort of short-term continuing resolution
because it only goes to January --


FINEMAN: -- and a debt ceiling only to February. And as David says,
they get to not be blamed. And they get some budget talks. There`s going
to be a kind of budget committee that`s going to talk about stuff. And
what the House Republicans get is nothing.

CORN: Nothing.

FINEMAN: Nothing.


FINEMAN: -- that is a problem in the dynamics.

MATTHEWS: Let me ask you to step back for the, like, weekly column thought


MATTHEWS: Is this going to be a case where the public -- and I`m in the
public looking at this -- will say, This big crap pile these guys have been
crawling around in for the last weeks has been entirely made by them?


MATTHEWS: That nothing is going to get done --


FINEMAN: That`s essentially happened.


CORN: For no --

FINEMAN: Nothing has happened.

MATTHEWS: But also, for no good end because --

MATTHEWS: So this is --


MATTHEWS: -- dysfunctional politics.

CORN: Three months from now --

FINEMAN: We`re going to do it again.

CORN: -- we have to do it again. Now, I think the Republicans are going
to be in a weaker position three months from now, after what they`ve gone
through. But again, none of this is settled for the long run --


CORN: -- not the government shutdown, not the debt.

FINEMAN: But there are some -- there are some -- will be some kind of nod
in the direction of a budget group that will try to hash out a budget --

CORN: Which we haven`t been able to do in the past three years.

FINEMAN: -- which we haven`t been able to do in the last few years. Why
they`d be able to do it between now and December 15th, I don`t know.

MATTHEWS: Why can`t -- I`ll play dumb a little bit, but I am dumb about
this one question. Everybody -- Obama, you know, we all know that he`s not
a lefty when it comes to fiscal policy. He may be very anti-war and some
of those other things, international politics maybe on the dovish side, but
when it comes to numbers and arithmetic, I think he has said many times I
can look at corporate tax reform, and that could mean a higher level of
taxes or somewhere -- improving the system to make business more
competitive with overseas people, which everybody talks about we have to
do. We have taxes too high here.

And the second thing is we all know these entitlement programs are going to
explode at some point. They just don`t have the funding, like Medicare.
Something has to be done --


MATTHEWS: Why doesn`t he do that?

CORN: But he has. He has offered --

MATTHEWS: He`s offered, but why hasn`t he done it?

CORN: Well, he`s offered chained CPI, Medicare --

MATTHEWS: Why doesn`t he just do it?

CORN: Because he wants it to be part of a deal to get something out of the

FINEMAN: Yes, and there`s a reason --

CORN: He is far closer and he would sign Simpson-Bowles in a minute, than
-- than --



MATTHEWS: -- chicken and egg problem.

FINEMAN: The problem is that Republican political orthodoxy now boils down
to three or four words -- No new taxes. And that is their mantra. They`ve
got the scorecards that Grover Norquist has that scares everybody. And
that is their essential point. They will not enter a budget negotiation
that has the possibility --

MATTHEWS: So that -- Howard, just you. That`s the straitjacket we`re in.

FINEMAN: That`s the --

CORN: The straitjacket they`re in.


CORN: Because even if you have this -- you know, this deal leads to budget
talks -- we had budget talks that Biden led before the 2011 deal. We had
the super-duper committee that was supposed to do something so we wouldn`t
have the sequester cuts. And at the same time --


CORN: -- the same issues came up again and again.

MATTHEWS: So what do you think is going to happen? We got until Wednesday
night as a deadline.

FINEMAN: I think -- I think it`s going to -- I think they`ll get it done,
but I think it`ll slop over into Thursday or Friday and -- and Jack Lew,
the secretary of Treasury, has enough tricks and enough fine print that he
can read, so --

MATTHEWS: So we`ll be out cutting checks again.


CORN: He has a rainy day fund!

FINEMAN: You know, he`ll discover some way to make it go another couple

MATTHEWS: But let me tell you something. This "sloppy" is a good word.
America shouldn`t be sloppy. And the world`s watching the sloppiness.
LaGarde the other day, the IMF --


MATTHEWS: The word is out that we`ve not got our act together. And even
if we make this deadline in a sloppy way and crawl over the finish line, or
fall over it, this is going to hurt us.

CORN: Listen --

MATTHEWS: I mean, last time hurt us.

CORN: About 80 -- about 80 percent to 90 percent of the political players
in this town on both sides of the aisle don`t like this, don`t want to see
this happen, agrees it makes us look foolish here. It costs us billions of
dollars to shut down the government and play with out credit ratings. So
it`s not even an ideological divide. It`s because of these 40 or 50 people
who have John Boehner by the tail that we go through this.

FINEMAN: No, it`s also -- yes, it`s that, but it`s also the fact that
everything here has turned into a game of political scorekeeping. And the
White House is not unaware, for sure, and it`s not displeased -- as a
matter of fact, is pleased about the fact that one of the things that`s
happened in this situation is that the Republican Party`s numbers have been
driven into the ground.

And they take some solace in that. They take some satisfaction in it . So
too many --

MATTHEWS: You think that`s serial?

FINEMAN: Too many people --

MATTHEWS: Or cyclical?

FINEMAN: -- including on both sides --


FINEMAN: -- are keeping score in terms of poll numbers and not in terms
of reality, the very simple actuarial reality we`ve got to deal with.

CORN: But wait a minute. When hostage takers go -- fall down in the
polls, that`s a good thing because then we won`t do this again. And if
Obama -- and I think Obama`s serious.

MATTHEWS: Well, let me --

CORN: And I`m not saying it`s a good thing from the progressive side --
he`s serious about getting a "grand bargain." So I think --

MATTHEWS: You know what?


FINEMAN: Clearly, the big tactical -- the big obvious tactical mistake on
the part of the Republicans -- and they were led by Ted Cruz on this -- was
to attach their demands to "Obama care." And that was just an unrealistic
and counterproductive thing to do.

MATTHEWS: You know, when we were growing up or watching 10 or 20 years ago
what happened in Greece, when gave up on parliamentary democracy and went
to the colonels -- you see it all over Latin America in the old days --
they just gave up on the parliamentary -- getting nothing done. We`re
getting a whiff of that.


CORN: Chris --

MATTHEWS: Where they`re just not getting something done.


CORN: -- careful to point out who`s mostly to blame.


CORN: A lot of people just say Washington dysfunction --


CORN: I`m not saying you --

FINEMAN: No, I`m not saying that, either.

CORN: -- but that`s how it gets filtered out to a lot of people. And
they turn -- and this is what Republicans and conservatives like in a lot
of ways. They want to see government and Washington discredited.


FINEMAN: If they wanted it discredited, what they should have done is left
"Obama care" alone. Everybody would be focusing on the failures --

MATTHEWS: That would have taken brains.


MATTHEWS: Anyway, thank you, Howard Fineman. Remember rationality? The
guys on Wall Street have those little books?


MATTHEWS: They don`t have those books. Anyway, thank you, Howard Fineman.

FINEMAN: Thanks.

MATTHEWS: What a lively discussion about impending doom.

Coming up, another incredible display of hatred by right-wing extremists
this weekend. Larry Klayman of the right-wing group Freedom Watch --
there`s a misnomer -- says President Obama, quote, "bows down to Allah" and
needs to come out of the White House "like a criminal." If the red hots on
the far right can`t take away this president`s signature achievement,
health care reform, they`re again ratcheting up the effort to legitimize --
actually, delegitimatize his entire presidency.

Chief among them may be Ted Cruz. The man holding the match that lit this
wildfire has become a big hero to the right-wing fringe, but he`s exposed a
bigger rift inside the Republican Party.

Plus, big business helped create this Tea Party monster, but now they find
they might not have enough power to stop it.

Finally, "Let Me Finish" with this deterioration of American politics. It
hasn`t always been like this.

And this is HARDBALL, the place for politics.


MATTHEWS: So which potential Republican candidate does the conservative
Values Voter like? Well, Ted Cruz, the Texas senator, won the Values Voter
straw poll by a wide margin. Cruz got 42 percent of the vote, far ahead of
Dr. Ben Carson and Rick Santorum, who tied for second at just 13 percent.

Cruz may be a big winner among the far right, but as we showed you last
week, his unfavorables across the country have doubled the more people get
to know him. That`s not a good sign for anybody, and this guy ain`t going

We`ll be right back.



SARAH PALIN (R-AK), FMR. GOV., FOX CONTRIBUTOR: Our vets have proven that
they have not been timid! So we will not be timid in calling out any who
would use our military, our vets, as pawns in a political game!

SEN. TED CRUZ (R), TEXAS: Why is the federal government spending money to
erect barricades to keep veterans out of this memorial?


MATTHEWS: Nonsense. Anyway, welcome back to HARDBALL. It`s hard to know
where to begin when Sarah Palin and Ted Cruz headline an event to protest
the closing of the world War II memorial when it`s Republican extremism, of
course, who forced the government shutdown that caused the monument
closures in the first place.

But Cruz and Palin didn`t mind that. They seemed tame compared to Larry
Klayman, founder of the right-wing organization Freedom Watch, who spoke
about a half hour later.


LARRY KLAYMAN, FREEDOM WATCH: In 237 years, our country has fallen, has
declined faster than it took Rome 2,000 years to do. And we are now
"ruled," quote, unquote, by a president --

UNIDENTIFIED MALE: An imperialistic president!

KLAYMAN: -- who bows down to Allah. This president is not a president
of we the people. He`s the president of his people.

I call upon all of you to wage a second American non-violent revolution, to
use civil disobedience and to demand that this president leave town, to get
out --


KLAYMAN: -- to put the Koran down, to get up off his knees and to
figuratively come up with his hands out.


MATTHEWS: Sometimes, I want to take one of these radical leaders and give
them sodium pentothal, put a needle in their arm and say, Do you really
believe this nonsense? Maybe they do, and that`s even scarier.

Anyway, the ad (ph) event we saw was complete with the usual bright yellow
Gadsden flag, of course, flying. No problem with that, "Don`t tread on
me." I actually like that message.

Here`s the bad ones. The "Impeach Obama" signs were dusted off and waved
around again, although what he`s done that`s impeachable isn`t exactly
clear, even to those people. But this picture of a protester waving a
Confederate flag in front of the White House struck a nerve with me and

"The Washington Post`s" Jonathan Capehart sits here. He described it this
way in his column. "If you want to curdle the blood of an African-American
and send a message of menace without resorting to burning a cross on the
lawn or marching around in white sheets, all one need do is wave the
Confederate flag. So imagine my revulsion at the sight of one outside of
the front gates of the White House."

Jonathan Capehart joins us right now -- he`s with "The Washington Post,"
he`s a columnist -- along with HuffingtonPost`s Sam Stein. Both are MSNBC

You know, there`s a piece of this thing from the beginning, this hatred of
Obama -- it`s not specifically racial. It`s also regional. It`s historic.
You hear people refer to "the cause." We remember "the cause." We
remember what that is, the people that really are the die-harders from the
Civil War. They never got past it.

I once was up at the Custus (ph) Lee mansion here, going to see Teddy
Kennedy`s burial spot. And there was a guy there saying, Let`s keep up the
fight. Let`s keep up the fight. And I knew what he was talking about. He
was -- as my wife said, he -- Cathy said, He wasn`t visiting Ted Kennedy`s
burial spot. He was visiting Robert E. Lee`s house!

But there`s some of that residue, that redolent attitude of, We got screwed
in the war. We didn`t have enough guns and railroad cars, or whatever.
And we`re coming back to fight the big fight now.

horrible is it that here we are, a few hundred years, a couple hundred
years after that -- after that war, a war that tore the country apart, and
you still have people who are flying that flag?

I say at the end of that piece that to me that flag is no better than a
swastika. It should not -- it should have no place in American political
discourse. It -- yes, it curdles the blood. It`s repulsive.

MATTHEWS: What do you think that guy is thinking out there?


MATTHEWS: There`s two flags, that one flag.


CAPEHART: Well, the flag on the left is the Marine Corps flag.


MATTHEWS: Well, he identifies the two of them somehow, this character.


And as someone on my Facebook page said, I wonder if the guy intelligent
picture realizes that the folks who are represented by the flag in his
right hand, you know, beat the butts of the people who represented the flag
in his left hand.

You know, that flag is so -- I mean, I`m glad I was able to write this,
because I can`t even talk about just how offensive that flag is.


Sam Stein, you know we lost 600,000 people in that war, the Civil War, in
this country. All of them -- most of them were Christians or Jewish. They
believed in the same God. They spoke the same language. They came from
the same country. They killed each other, 600,000 people, at point-blank
range across open fields --


MATTHEWS: -- for what they believed in, which was this fight about
regional power, or whatever, and slavery, of course.

Why do these people want to stir back toward that? Why do they want to
recreate that emotion that led us to the horrible Civil War? Why do they
want it again?

STEIN: I have no idea. I would guess something to do with states` rights,
as if it were pertinent to this debate.

But I don`t want to overlook what Larry Klayman said, because I know
obviously the Confederate Flag is deeply offensive. But Larry Klayman said
was also very offensive. The idea -- and I`m stealing from Colin Powell
here. But the idea that because this president is Muslim, that that`s
something that is wrong, that he would -- I mean, obviously he`s not
Muslim, but the idea that that would be an insult, that that would be a
disqualifier, that that would be offensive is bizarre.

There are plenty of moderate Muslims. There are plenty of good American
Muslims in this country. Why that should be an insult to anyone to be
called someone who believes in the Koran or who worships by the Koran is
bizarre. And that`s equally as offensive to the American Muslim population
in this country. And I don`t think we should just brush it to the side.


MATTHEWS: Why do you think they do it? Why do you think they call him a
Muslim, when he has never professed a belief in Islam ever, that he was
raised Christian, he went to Christian churches?

STEIN: Because it makes -- it presents him as the other.

MATTHEWS: In fact, he took a lot of heat for going to one particular
Christian church.

STEIN: Because it presents him as someone who is somehow un-American,
because it presents him as someone who is exotic in some respects. I have
no idea.



STEIN: But it`s obviously hurtful.

And the fact that a speaker at the rally, not someone who was just
attending and a holding a flag, but a speaker at the rally did that should
trouble a lot of people.

MATTHEWS: I think they`re trying to delegitimize his presidency. One
tool, get rid of his historic accomplishment on health care, which every
Democrat and a lot of Republicans going back to the beginning of the 20th
century believed in, fought were for and failed. But he did it. Get rid
of that baby, and you have pretty much begun to erase his record.

They want to put an asterisk next to his name, like he wasn`t really
president. That`s what I think they`re up to.

CAPEHART: Well, what they`re doing is they`re playing -- there`s a lot of
fear. That flag represents fear. What --


MATTHEWS: What, of the health care bill?

CAPEHART: No, no, no, just -- not of the health care bill, but of this
president and what they view him representing.

The country, as a lot of these folks view it, is changing.


CAPEHART: Remember, the mantra in 2009/2010 was, we want our country back.

But, well, from whom? Back from whom?


CAPEHART: And we want the country to -- we want the country to follow the
Constitution again.

Well, where`s your proof that the president`s not following the


CAPEHART: And then the impeachment signs, which we have seen since the
first term and we saw them out there on Sunday, impeach him for what? You
can`t really explain. They can`t tell you for what. And if they do start


CAPEHART: -- they can`t get terribly specific.

MATTHEWS: Let`s get totally -- let`s get totally -- think totally tribally
here, because you`re right. You`re talking about tribalism here.

Why do they fear a country that has increased -- the black population of
the United States is basically what it`s been since we were kids, since I
was a kid about 12 and 13. That doesn`t change much. The Hispanic
population is growing through immigration. There`s no doubt about it. But
it`s not going to change. There`s always going to be one -- a lot of white
people around to keep your company, if that`s what you want to keep company
with. No, seriously.

CAPEHART: No, you`re right.

MATTHEWS: What are they actually afraid of? There`s vast stretches of
this country that are all white. So, what is their worry?

CAPEHART: Right, Chris. It`s the fear of change. It`s the fear of a
country -- a vision of a country that they have, this American dream --


CAPEHART: -- for a whole --


CAPEHART: -- for who a lot of people didn`t really exist. But for them,
the mythology of America to them is changing.


CAPEHART: And the idea that there`s an African-American family in the
White House and a black man in the Oval Office is a little too much change
for people --


MATTHEWS: Well, the strangest thing, Sam -- and you probably know this.
I`m a nut about movies.

But a lot of our culture came from immigrants. A lot of our culture, our
most basic culture, movies and novels and everything, almost all written,
with some exceptions, by people who arrived here in the 20th century.

And now to say we don`t like our culture is not to like what came to be our
culture and is what we think of as America. Right? I mean, who produced
"Gone With the Wind"? What are you talking about? Where did all that
stuff come from? It came from immigrants.

STEIN: Yes, obviously.


MATTHEWS: That`s just the truth.

STEIN: Well, these are conversations and debates that extend well back in
our history over whether we`re soluble or a melting pot, to what extent we
want to assimilate people or have them be part of society.

And, listen, I will say this. I don`t like the idea that we will, you
know, tar a broad brush of people who came out to rally by the signs that a
few people brought. However, this is A continuing pattern at some of these
rallies. And more importantly to me IS that the people, the politicians
who were brought there who spoke at the rally didn`t say anything about the
signs that were put up --


STEIN: -- didn`t say anything about the flag that was flown. They had
the opportunity to stand up and say something and they didn`t do it.


MATTHEWS: Same, take a moment. Rational question.



MATTHEWS: I want a rational answer to this --

STEIN: Uh-oh.

MATTHEWS: -- because why was it only John McCain who ever spoke up
against -- I think there`s a rational political reason for it, why they
don`t speak up against their fringe. My answer, they want that 5 percent
or 10 percent to add to their numbers. And they don`t want to kiss off any
voters, even the most offensive people.

Your thoughts.

STEIN: I agree 100 percent.

MATTHEWS: OK. Thank you, Jonathan Capehart.

This is a rough time. We`re right up against a doomsday device called the
debt ceiling. We`re about to perhaps pass it and blow things up
economically, and culturally now, we`re seeing a wildfire.

Thank you, Jonathan Capehart.

Thank you, Sam Stein.

STEIN: OK, Chris.

MATTHEWS: Up next: highlights from my appearance on the always
entertaining "Real Time With Bill Maher." They say things there we can`t
say here.

And this is HARDBALL, the place for politics.


MATTHEWS: Back to HARDBALL. Time for the "Sideshow."

The movie "Gravity" is soaring at the box office. But here on Earth, many
NASA programs are on hold, thanks to the government shutdown. Here`s how
the folks at "Saturday Night Live" dealt with that over the weekend.


UNIDENTIFIED ACTRESS: Just pass me that wrench.

UNIDENTIFIED ACTOR: I think some debris hit the telescope.

UNIDENTIFIED ACTRESS: Oh, my God. Oh, my God. We`re detached. What do
we do?

UNIDENTIFIED ACTOR: Here, let me -- stay calm. Stay calm. Houston,
Houston, this is Explorer. We have been hit by debris and need immediate
assistance. Do you copy? Houston, do you read?


UNIDENTIFIED ACTRESS: Houston. Come in Houston.

UNIDENTIFIED ACTOR: Houston, Houston, come in. We`re flying blind,


UNIDENTIFIED ACTOR: Houston, we need you desperately. Houston, please.






UNIDENTIFIED ACTRESS: This is Dr. Janet Stone. We have become detached
from the Hubble telescope.

UNIDENTIFIED ACTOR: Well, this is awkward, but the government is shut





MATTHEWS: That`s something.

Anyway, the space buffs may be interested to know that today marks the 45th
anniversary of the very first live television transmission from a manned
spacecraft. It was Apollo 7. It was a test mission back in `68.

Next up, I was on HBO`s "Real Time With Bill Maher" on Friday night, and I
pushed back against the notion that the debt ceiling debate is just
politics as usual. It`s not. And take a look.


BILL MAHER, HOST, "REAL TIME WITH BILL MAHER": First, we had the gun to
our head because of Obamacare. They gave up on that. Why is the gun to
our head still?

UNIDENTIFIED MALE: Because it is --

MAHER: Now it`s like we have the gun to our head. We have to figure out



MAHER: Hold on. Keep your head there.

UNIDENTIFIED MALE: Because, Bill, it`s a great American transition to --


UNIDENTIFIED MALE: -- for Congress to put the gun to an opposing


MATTHEWS: When President Reagan was elected by a landslide, including
carrying Massachusetts, Tip O`Neill said, you know what? There`s something
called a honeymoon. You get a shot.

MAHER: Right.

MATTHEWS: And he said, OK, you get your votes. I don`t like anything
you`re doing, but you are going to get some votes.

And you know what he did? They came the him and said, would you -- will
you Democrats vote for the debt ceiling? And he knew it was all Mickey
Mouse, this debt ceiling thing. And he said all, I want is a letter to
each of the Democrats from Ronald Reagan saying, vote for the debt ceiling
and you will have all the votes. And that`s what happened. He didn`t
Mickey Mouse around with it, screw around with it.

MAHER: Right.

MATTHEWS: He moved on.


MATTHEWS: Wow. We should move on again tonight. The lesson, don`t pick a
fight just because you can. Choose your battles wisely.

Up next, carnival Cruz -- the Texas senator who led Republicans into this
disaster may be splitting his own party in two.

You`re watching HARDBALL, the place for politics.



A suspected al Qaeda operative captured earlier this month in Libya is now
in New York. Abu Anas al-Libi will face charges for bombings of two
African embassies in 1998.

Police in London arrested a man who tried to dart through the gates of
Buckingham Palace with a knife.

And take a look at this. A Florida woman was rescued after she was found
clinging to a railroad bridge 22 feet in the air. The bridge suddenly
lifted as she was walking across. Apparently, she could face trespassing
charges -- now back to HARDBALL.


SEN. JOHN MCCAIN (R), ARIZONA: I respect Senator Cruz. He didn`t make any
bones about what he was going to do when he came to Washington. The
question is, is, should we follow that leadership, or should we go in other
directions and coalesce the majority of the American people?

Look, I guess we can get lower in the polls. We`re down to blood relatives
and paid staffers now.


MATTHEWS: That`s pretty funny. Blood relatives and paid staffers are the
only people loyal to Republicans.


That was Senator John McCain, of course, giving an honest assessment from
him on his party`s problems. For telling the truth, McCain has been
lambasted by the far right, including this below-the-belt attack on Friday
by Tea Party Congressman, the inimitable Louie Gohmert.


REP. LOUIE GOHMERT (R), TEXAS: Some senator from Arizona --


GOHMERT: -- a guy that liked Gadhafi before he wanted to bomb him, a guy
that liked Mubarak before he wanted him out, a guy that`s been to Syria and
supported al Qaeda and rebels, but he was saying today the shutdown has
been a fool`s errand.


MATTHEWS: Well, John McCain never supported al Qaeda. He supported the
other rebels.

Anyway, yes, that was Republican Congressman Louie Gohmert calling his
colleague in the Senate a supporter of al Qaeda. Things are getting pretty
nasty up there with the GOP. A small group of Tea Party extremists -- I`m
not sure how small they are -- led by Ted Cruz, of course, has tried to
hijacked the party. And it`s gotten away with it for a while.

And the result has been a huge hit to the party`s standing in the most
recent polls. But, beyond image, the polls show just how shattered the
party is. In the latest NBC/"Wall Street Journal" poll, there`s a stark
divide between Tea Partiers and non-Tea Partiers when it comes to approval
of the job Republicans in Congress are doing.

Tea Partiers generally support them. The rest of the party doesn`t.
Anyway, the same goes for whether Republicans are demonstrating strong
leadership. Ted Cruz and his pals might like how the last few weeks have
gone, but for Republicans who actually want to be a nationally competitive
party, this shutdown has been a catastrophe.

Dana Milbank is a columnist with "The Washington Post" and A.B. Stoddard is
a columnist at "The Hill" newspaper.

A.B., I don`t -- I thought what was really nuanced was John McCain, the
good John McCain. He`s back to being the good guy, from my perspective.
And he`s talking about how this is what Ted Cruz came here to do. In other
words, he came to be a bomb thrower, came to be a revolutionary, to blow
everything up like Samson in the temple, and he`s doing it. That`s a
pretty nice way to say, this guy`s a disaster, a frigging disaster, a nice
way to put it.

conservatives will often tell you that the establishment doesn`t fight.
They just -- they roll over, they lie to their constituents about what
they`re going to do once they get in office, they never put up a fight.

And so they`re --


MATTHEWS: You mean Obama has had a free ride?

STODDARD: They`re --


MATTHEWS: They have been fighting him from the day he got in there.

STODDARD: You know what? They think that John Boehner and Mitch
McConnell, their congressional leaders, are sellouts. They think that they
always roll over and that they don`t fight.

So when you talk to the --


STODDARD: -- about Ted Cruz --

MATTHEWS: That`s how paranoid people talk.

STODDARD: -- even though they know that he has never told them that you
need a two-thirds majority in each chamber to actually defund Obamacare,
that he`s never got the votes to do what he promised he was going to do,
they just like the fight.

And so then you have the establishment saying this fight is tanking us in
the polls and we`re never going to get the White House back. The most
interesting moment will happen after this is resolved this week when we
punt to the next deadline. Does the Chamber of Commerce actually primary
people running against Tea Party candidates?

Does Haley Barbour, Governor Scott Walker of Wisconsin, all the Republicans
who have said this is a bad strategy, Senator Corker from Tennessee, do
they fight back and actually try to stop this tide of civil war in the


STODDARD: It`s going to be a big question.

MATTHEWS: -- I have an editorial I will deliver to you, my friend.

It seems to me that there come a times in every political party when you
have to clean house.


MATTHEWS: I would say the Democrats probably did it in `48 with the
segregationists on one side and the far left on the other side.

And the Republican conservative movement under Bill Buckley, he just said,
enough anti-Semitism in this movement. You`re all gone.

MILBANK: Mm-hmm.

MATTHEWS: You`re not part of us.

It was a very important thing they did back in the `50s with Buckley
leading the charge.

Is this a time when they might say, lose the Confederate flags, lose the
Islam calling that he`s a Muslim, lose all the racism tarring of the guy or
else you`re not in our party? When is somebody going to say you`re not a
Republican, even if you say you are?

MILBANK: Well, if they`re going to stay the Republican Party, they`re
going to have to that at this point. The problem is that the Tea Party
might be this tiny fraction of the electorate, but they`re absolutely
entrenched right there at the --

MATTHEWS: Do Republicans need them to win control of the House?

MILBANK: No, they don`t need them for that.

MATTHEWS: Because every one of their districts could be served by a
moderate conservative Republican. The liberals aren`t going to win those

MILBANK: They`ve got to get it so they don`t control the primary process
anymore. And until they get them out of that, there`s nothing they can do
to take on this.

MATTHEWS: Same question to you. Do they need them, the crazies?

A.B. STODDARD, THE HILL: No, until the Club for Growth and Jim DeMint`s
Heritage Action, everything like that, has -- is matched by establishment
forces and resources and grassroots energy, they`re going to continue to

MATTHEWS: I know the Club for Growth grabbed hold of Mr. Toomey in
Pennsylvania, too, but he`s back on the team.

Anyway, New Jersey Governor Chris Christie showed he has no interest in
being lumped in with his fellow Republicans up on Capitol Hill generally.
He told "The Philadelphia Inquirer" last week, quote, "If I was in the
Senate right now, I`d kill myself." He went on to explain to what he has
said to colleagues in Washington. "What I said to any of them that I met
with, get the government reopened, stop monkeying around and get back to
work. I said I`m out there in the field. People have no patience for this

The governors like Kasich and Scott Walker, whatever you think of their
policies, are competent. Those guys can do stuff.

STODDARD: Are they going to fight back after this and say we have to be a
party that governs, we can`t be a party that shuts things down? This will
be the true test.

MATTHEWS: But that`s what John McCain just said. Ted Cruz came to
Washington to shut it down.

MILBANK: And he did. He saw the way to power in Washington for him was to
create that. Now, the one good thing that could come out of this is
they`ve been spoiling for this fight and now Mitch McConnell and Boehner
said, you wanted your fight. You got your fight. It was a disaster. Now
let`s have the grownups take over.

And the question is --

MATTHEWS: You`ve got good sources when you report. Will you be able to
get into the caucus? Will you, I`ll issue an order.

MILBANK: Mitch McConnell is doing that right now, in cutting a deal with
Harry Reid. Now, when that`s gets passed over to the House, is John
Boehner going to say, fine enough, Louie Gohmert and you crazies, you`ve
had your say. It was a disaster.

MATTHEWS: So you think the current deal on the table effectively gives the
Democrats what they want in a short-term basis, but it does require some
sort of sophisticated, more sophisticated means testing or effective means
testing on Obamacare. Is that enough for these people?

STODDARD: It won`t be enough. We`re going to get through this week --

MILBANK: Nothing`s enough.

STODDARD: -- and you`re going to hear Ted Cruz again saying we still have
to --

MATTHEWS: Is he going to throw a monkey wrench into this thing in the next
couple of days?

STODDARD: They`re not going to give up this fight. This is a fight that
the grassroots believes is the number one fight.


A friend of mine, we mentioned earlier on the show, knows his finances, we
get into Wednesday evening, we start losing big on the stock market.
People with their 401ks, their only retirement money is in these mutual
funds and this 401ks.

When they start to shrink in front of their eyes, people who have no more
way to make money, what happens? Do they still root for that rebel flag?

MILBANK: Well, they may to some extent, but I think what may be failing to
realize here is say the Tea Party Republicans tank the economy now, goes
into a deep recession. It`s a year from now until the midterm elections,
and if the economy`s sour, well, who do they blame? They typically blame
the president`s party.

I`m not -- it`s not clear to me that what`s negative --

MATTHEWS: You mean like the kid who shoots his parents claims to be an


MATTHEWS: We got to go. The jokes are awful, but I got to tell you --

STODDARD: We`re not going to default.


MILBANK: We won`t, right here.

STODDARD: No, John Boehner --

MATTHEWS: Anyway, thank you. It`s called a bad credit rating. Thank you,
Dana Milbank. And thank you, A.B. Stoddard.

Up next, big business helped bankroll the Tea Party monster. But now that
the monster has turned on its creator, what are they going to do about it?
That`s ahead. We`ve got some smart people in business coming up.

This is HARDBALL, the place for politics.


MATTHEWS: We`re two days away from that special Senate election up in New
Jersey. And we`ve got new polling on the race.

Let`s check the HARDBALL score board. According to a new Monmouth
University poll, Democrat Cory Booker has a 10-point lead over Republican
Steve Lonegan. It`s Booker 52, Lonegan 42. The election is Wednesday.

And we`ll be right back.



TOM DONOHUE, U.S. CHAMBER OF COMMERCE: It is insane not to raise the debt
ceiling. Now, I know there are a lot of people, new people particularly in
the House or folks, you know, some of the guys in Heritage and other places
talking about we should burn the house down so we can build a new one.
Well, that`s just fine if you knew what you were talking about, but you



We`re back.

That was Tom Donohue from the U.S. Chamber of Commerce referring to members
of the Republican Party as not too smart. Well, the business community
spent millions in 2010 to elect the Republican-controlled Congress and
spend even more to fund redistricting efforts to keep their majority in
safe Republican hands, it had no idea it would come to this -- open warfare
with the Tea Party monster it helped create.

Well, the Tea Party faction of the GOP has led the country to a fiscal
stalemate or worse, which the business community certainly opposes, and a
Republican Party that once shared interest with the Republican sector now
finds itself split in two.

And now, powerful business groups like the U.S. Chamber of Commerce are
spending more campaign dollars this time on mainstream Republicans looking
to beat back Tea Party incumbents who they think are bad for business, bad
for the country.

Roger Altman is the CEO of the investment banking advisory firm Evercore,
and was deputy treasury secretary during the Clinton administration.

Steve Elmendorf is a Democratic strategist of some renowned.

Roger, thanks for coming on.

ALTMAN: Thanks, Chris.

MATTHEWS: I`ve always taken your advice about how things are moving in the
economy, what consumers are thinking, how debt affects consumers. How does
the possibility of a national default, how will it affect our reality in
this country?

ROGER ALTMAN, CEO, EVERCORE: Well, it would be catastrophic, which is why
I think, at least at the very last moment it won`t happen. Business, of
course, is horrified, that`s really the right word, at that prospect, and
horrified that, as you say, a number of members that they supported on the
far right are causing this near catastrophe.

But if we ever actually went over the edge and we missed a payment, an
interest payment or a principal payment, it would have catastrophic
consequences. Every single American, anybody taking out a mortgage,
anybody with a consumer loan, any church borrowing money, any business
borrowing money would pay more, a lot more, in interest, the credit rating
of the United States, of course, would be lowered, and it would be a very
dark day in this country.

And it`s difficult, for me at least, to believe that the way markets would
plunge just before that would allow even the Tea Party Republicans, or at
least the Republican leadership, would allow them to actually conscience
it. I don`t think they could.

MATTHEWS: Well, it scares me, Steve, we`re talking politics now, is now --
and I know this is where you sit is where you stand, and where you stand is
where you sit. But I have to tell you, nothing bugs me more when I look
into the eyes of somebody sitting there somewhere else on some other show,
like on Bill Maher, who I know knows it`s destructive if this happens, but
because they`re Republicans this time, they think it doesn`t -- they`re
openly saying what they know isn`t true, that this isn`t going to hurt,
this is prioritizing or fixing or whatever else.

Republicans who are deniers. I mean, I think there are a bunch of them
actually believe it, Chris, that`s the scary part.

MATTHEWS: They wouldn`t believe it if it was a Republican president, would

ELMENDORF: I think a lot of them are so crazy --

MATTHEWS: Would they believe if their keister was on the line here?

ELMENDORF: Well, I think for a lot of them, the hatred of Obama clouds
everything they think. But I think a lot of them, they`re just know-
nothings. And a lot of people in the business community, as Tom Donohue
said, need to stand up to them.

MATTHEWS: Is this part of the Ayn Rand libertarian creed that nothing
matters except your own ego? Is this the thing that`s going on?

When you got a guy like Rand Paul, he`s not stupid. He`s out there saying
it doesn`t matter. Where`s that coming from? I could see a Steve King who
doesn`t know anything, saying I raised a family, I own a national business,
but never mind. I don`t get these guys. I think they`re irresponsible.

Roger, when you talk about the business community and communications, the
top editorials of "The Wall Street Journal," which is almost a bible to
business, the U.S. Chamber, people even like Koch brothers, are out there
saying, please, don`t take us off the cliff.

Why doesn`t the communication get through to the voting members of the
House of Representatives?

ALTMAN: Well, I think as you`ve been saying on this show earlier tonight,
Chris, I think this really, so far, has come down to some number, like 40
of House Republicans on the far right, the Tea Party Republicans. But if
Thursday morning is D-Day in terms of default, and it looks midday
Wednesday, Wednesday morning. So, this really may happen.

There will be such a plunge, I think, in the stock market that it will
frighten people on main street in a big way, average people, people, as you
said earlier, with IRAs and so forth. And that fright, I think, will
motivate the leadership to break the Hastert Rule and pass at least an
increase in the budget limit.

MATTHEWS: Will that be a bungee jump or will we have irreparable harm just
because for the first time ever, we`ve defaulted, even for just several
hours. I think both parties, especially Republicans, are pushing and
pushing, how close can we get to the cliff without falling over? But if
they get and fall at all, even for an hour, will it be a bungee jump or

ALTMAN: A bungee jump. It will be analogous to the first congressional
vote in 2008 on the TARP when the vote, which was expected to pass, of
course, didn`t, the market plunged 800 points, people on main street were
terrified by that plunge. Forty-eight hours later, the Congress came back
in and voted the TARP through. It will be like that.

MATTHEWS: I think I have a worse -- maybe I`m more worried than you, Rog,
and you`re the expert. You know, Steve and Roger, I`m afraid, having lost
our perfect safety record, we`ll never be the same.

Anyway, thank you, Roger Altman.

ALTMAN: Thank you, Chris.

MATTHEWS: Thank you, Steve Elmendorf.

We`ll be right back after this.


MATTHEWS: Let me finish tonight with this:

We now wait, sit in wait and check the news for two possibilities, one
that, once again, the two parties reach yet another 11th-hour decision that
disappoints us with once again an unsatisfactory result, which instead of
doing no harm only manages to do less harm.

The second possibility is if it only works. If the House Republicans will
not or cannot come to an agreement with the Democratic-led Senate and the
Democratic president, Barack Obama, we are in for trouble. It will be a
renegade moment in American history.

Suddenly, we would face the reality of a right wing run amuck, a refusal to
participate in national self-government out of some angry need to bring the
House down and be seen doing so.

There was once a way to do things in American politics. It was easy to
understand. You fought over policy, you agreed on a compromise in a
reasonable time, you signed a bill together, there were smiles all around
and the country liked what it saw.

Now, we have a system where you fight even when you have to keep coming up
with reasons, new reasons for the fight, where you recklessly miss
deadlines, where you keep on fighting, where you may or may not reach a
compromise where there is more anger in the country after than before. We
don`t calm differences these days, we stoke the anger.

Well, tonight, I`ll be on "THE RACHEL MADDOW SHOW" to talk about my book,
"Tip and The Gipper," which I imagined often in writing it as a warm-
hearted look at a good time in American life, but instead now looms as a
real operator`s manual on how the government should be run, an optimistic
look at how it still could.

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

"ALL IN WITH CHRIS HAYES" starts right now.


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