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updated 7/10/2008 11:59:06 AM ET 2008-07-10T15:59:06

Guest: Roger Simon, Tom DeLay, Michelle Bernard, Jill Zuckman, Joan Walsh, Andrea Mitchell, Chuck Todd

CHRIS MATTHEWS, HOST:  The missiles of July.  How will Iran‘s test-firings today affect the November election?

Lets play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  It didn‘t take long after Iran test-fired nine long and medium-range missiles today for both presidential candidates to respond.  Here‘s Barack Obama on “Today.”

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  We‘ve got to have the kind of aggressive diplomacy that, unfortunately, has been absent over the last several years.  If we don‘t, then we‘re going to continue to see rising tensions that could lead into real problems.

(END VIDEO CLIP)

MATTHEWS:  And now here‘s John McCain in an interview with NBC‘s Brian Williams.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  (INAUDIBLE) very disturbing, and it‘s part of the trend of the acquisition of nuclear weapons and the means to deliver them on the part of the Iranians, who continue to state their commitment to the extinction of the state of Israel.  So it‘s very disturbing.

(END VIDEO CLIP)

MATTHEWS:  Well, you have to tell me, did either of the candidates look presidential there?  Which one more than the other?  Which candidate stands to gain or to lose in this fight?  And all this regarding this latest development.

Also, changing colors.  The NBC News political unit has been taking a close look at that old political map of ours in this country.  As Bob Dylan would say, the times they are a-changing.  What red states may be turning blue?  What blue states may be turning red?  We‘ll give you a “Smart Voter‘s Guide” to the election so far.

And former House majority leader Tom Delay of Texas is going to join us to talk about how badly President Bush has damaged the Republican brand.

And if you‘re hoping for Democratic Party unity, you know it‘s not a good thing to wake up to the front page “New York Times” headline, quote, “Obama donors aren‘t pushing to aid Clinton.”  It gets worse when you read the quotes like this, “Not a penny for that woman or her husband or, God forbid, Mark Penn.”  Oh!  We‘ll have the latest (ph) Clinton fund-raiser of them all, Terry McAuliffe, on to talk about that in just a moment.

Also, there was this wonderful and heart-warming moment on the U.S.  Senate floor just this afternoon when Senator Ted Kennedy of Massachusetts entered the chamber.  Let‘s watch.

(BEGIN VIDEO CLIP)

(APPLAUSE AND CHEERS)

(END VIDEO CLIP)

MATTHEWS:  It was Senator Kennedy‘s first appearance on the Senate floor since being diagnosed with brain cancer.  He was there to vote on the Medicare bill.

The Senate today also passed that government eavesdropping bill, the so-called FISA bill.  It passed with the help of Barack Obama, and that does have Obama taking some heat from the left.  By the way, Hillary Clinton voted for—or rather, she voted against the bill.  She took the left-wing position.  He took the conservative position.  That‘s an interesting switcheroo.  We‘re going to look at all that in tonight‘s “Politics Fix.”  And in the HARDBALL “Sideshow” tonight, John McCain‘s secret weapon for reducing the threat from Iran.  Here‘s a hint.  Millions of Americans have them in their homes.

We begin with Iran‘s missile test today and how it is playing in the presidential race, if “playing” is the right word.  Andrea Mitchell is NBC‘s chief foreign affairs correspondent.  She‘s up in New York.  Roger Simon‘s with me.  He writes for “The Politico.”

Andrea, first an assessment of the actual importance to the world, to the region.  What does it mean that Iran decides to test its medium and short-range missiles today over the Straits of Hormuz?

ANDREA MITCHELL, NBC CORRESPONDENT:  And also long-range missiles, missiles that could actually reach Tel Aviv.  It seems to be an Iranian muscle flexing, but the really interesting thing is that we don‘t know how serious this is, how aggressive it is.  In fact, it‘s been suggested by people as expert as the Richard Haass of the Council on Foreign Relations earlier today on MSNBC that this could be a hard-line sort of approach to warm up the possibility of diplomacy with the Europeans led by Javier Solano, the head of the European negotiating stance (ph), with Iran.

So this could be a “good cop, bad cop” routine.  We don‘t know what‘s going on within the Iranian government because there are different factions.  They clearly are responding to Israeli military exercises and some bluster from Washington, as well, and prospective exercises by the U.S. coming up next week.

MATTHEWS:  How do we know whether this is, A, a defensive move, simply to show if Israel attacks or the United States helps Israel attack, looking for their nuclear facilities, they could at least shoot back some conventional weaponry with some TNT payload back at Israel, or that they‘re showing that the -- - if they get ahold of some nuclear weapon, they‘re going to be able to deliver it?  How do we know the difference between an offensive and a defensive demonstration?

MITCHELL:  Not even the most, you know, vigilant and the most concerned intelligence, which would be the Israeli intelligence, suggests that Iran is that close to having weaponized.  The Israelis think that they will cross a red line by the end of this year and be well on their way to developing a bomb.  U.S. intelligence doesn‘t think that‘s going to happen for several more years.

You don‘t sense a whole lot of alarm, Chris, within the U.S.  government.  You do sense, though, that they feel that they can use this to try to say, Look, we need a missile shield.  We need all sorts of other aggressive diplomacy against Iran.  We need further sanctions against Iran.  But nobody is talking about moving away from diplomacy and moving toward a military posture on the U.S. side.

MATTHEWS:  Roger Simon, I‘m looking at this politically, as well as you are, of course.  They want you to think about it in terms of politics.  It looks like it‘s almost like our air raid drill.  Let‘s see what the candidates do if Iran fires some missiles off, and now we know.

ROGER SIMON, POLITICO.COM:  And the requirements of international diplomacy are the exact opposite of the requirements of a presidential campaign.  In international diplomacy, you move step by step, incrementally, a little carrot, a little stick.  In a presidential campaign, we need a solution, we need it now, be tough, be strong, let‘s be aggressive, I don‘t want to be out-aggressived by the other guy.  And you make all these promises and you ratchet things up, and it‘s not what gets a solution.  You know, and everybody now is talking about international sanctions because we don‘t want to talk about the alternative, which is a military strike against Iran.

The fact is, with oil selling at $140 a barrel plus, Iran has a greater capacity to affect our economy than we have the capacity to affect Iran‘s economy.

MATTHEWS:  Like, if we attacked Iran with missiles, or Israel does it with our help or what looks like our help, the price of oil doubles, probably, right?

SIMON:  Well, it‘s—it‘s not only that, but our market went down 200 points today, 200-plus points today, just on the fears that there might be a constriction in the U.S. oil supply.

MATTHEWS:  OK.  Here‘s Senator Obama and what he was talking about—here he is this morning on the “Today” show when he was asked how he‘d deal with Iran‘s missile tests if he were president right now.

(BEGIN VIDEO CLIP)

OBAMA:  It‘s so important for us to have a coherent policy with respect to Iran.  It has combine much tougher threats of economic sanctions with direct diplomacy, opening up channels of communication so that we avoid provocation but give a strong incentives for the Iranians to change their behavior.  We‘ve got to have the kind of aggressive diplomacy that, unfortunately, has been absent over the last several years.  If we don‘t, then we‘re going to continue to see rising tensions that could lead into real problems.

(END VIDEO CLIP)

MATTHEWS:  I wonder if that‘s anything new.  But here‘s Senator McCain talking to Brian Williams on the same question.

(BEGIN VIDEO CLIP)

MCCAIN:  This kind of testing and this kind of progress that the Iranians are making is here and now, and it cries out for collective action to cut off now the lines of credit that the Iranians are getting, to cut off now the trade and diplomatic and other activities that go on between the Iranians and the world.  Iranians should be isolated now because they‘re in violation of a number of treaties.

I‘m just saying that we‘re in a situation where we need to act now and say, Hey, we can‘t wait.  I mean, let‘s just—we can‘t say, Let‘s just wait until next January to take meaningful action.

(END VIDEO CLIP)

MATTHEWS:  Andrea, I feel like one of those people at the U.N. with the earphones on, trying to figure out the translation there.  What is the difference there between what Barack and said what McCain said?

MITCHELL:  Barack Obama is saying that we should have aggressive diplomacy, that we should be engaged.  John McCain is saying that we need sanctions, economic punishment, diplomatic pressure on Iran, not diplomatic engagement.

Interestingly, Dick Lugar, the Republican vice chairman of the Foreign Relations Committee, at a hearing on Iran this afternoon, Foreign Relations Committee hearing, sided with Barack Obama.  He suggested that there should actually be more diplomacy, that the U.S. should drop some of its preconditions and join the Europeans in sitting down with the Iranians without first demanding that Iran stop enriching uranium.

Lugar and other Republicans are beginning to move to the side of those Democrats, many of them, calling for some sort of diplomatic involvement with Iran without preconditions.  The McCain position is identical to the Bush position, but it is not universally accepted within the Republican Party.

MATTHEWS:  Well, let‘s talk about the politics on the home front. 

Everybody in America, practically, roots for Israel, in a general sense.  Obviously, people who are Jewish have a deeper commitment than most people, but there‘s also a huge Christian conservative element in this country that‘s deeply pro-Israeli.  When John McCain made a statement here—let‘s take a look at what he said.  I think he talks about it here.  Here‘s McCain talking to Brian Williams again this morning about the significance, let‘s face it, politically of this action by Iran in firing off these missiles.

(BEGIN VIDEO CLIP)

MCCAIN:  If Iran attacked Israel, I have no doubt that the entire region would erupt in conflict.  The Iraqis (SIC) would have to respond, as any nation does that‘s attacked.  And the entire region and the United States would probably be drawn into the conflict.  Lessons of history are that we prevent crises, rather than let them come and erupt and—and the conflicts that ensue could almost always throughout history been avoided if we had taken the proper action at the proper time.

(END VIDEO CLIP)

MATTHEWS:  Senator McCain also talked this morning in another bite, another sound bite, about the possibility of a second Holocaust.  That‘s certainly incendiary language politically.

SIMON:  Sure, and it‘s one of the reasons he‘s saying we—he uses for staying in Iraq, that we have to have a presence there, we have to have a peacekeeping presence in the region, or else we face open warfare.  The trouble is—the other bite you should, Senator McCain calls for isolating Iran.  The trouble with isolation is, once you isolate them, then what do you have left?

The fact is, as Andrea points out, not only Senator Lugar on the Republican side but Senator Biden on the Democratic side today said what we need is carrots and sticks together with Iran.  Yes, we need to say there are going to be sanctions.  We‘ve been sanctioning them, by the way, since...

MATTHEWS:  Yes.

SIMON:  ... October of last year.  But you need something to offer Iran to say, Hey, do this, act sensibly, and here‘s what you get out of it that would be good for you.

MATTHEWS:  Who‘s calling the shots over there in Iran, Andrea?

MITCHELL:  We don‘t know.  We...

MATTHEWS:  Who are we talking to?  Who‘s got the gun, more or less?

MITCHELL:  We actually don‘t know.  There are several factions.  There‘s an election next year.  The real power is on the clerical side, but Ahmadinejad is the public face of Iran and he is the most aggressive and the most hostile.  But there‘s a lot of internal politics going on...

MATTHEWS:  Yes.

MITCHELL:  ... and the smartest people that we know, the analysts, really don‘t know who‘s calling the shots.  Our intelligence is not all that clear on Iran.  But you‘re right, this, politically, is dynamite because of the hard-line Israeli position, because of the hard-line, you know, Republican position.  And this does create a challenge for Barack Obama.

It‘s unclear where the American public will end up on this because of all of the sensitivity about the Iraq war and the way things are not going well in Afghanistan, it could be that the hard-line position is not as appealing...

MATTHEWS:  Yes.

MITCHELL:  ... that people will say, Wait a second.  We don‘t need another...

MATTHEWS:  Yes.

MITCHELL:  ... military engagement—you know, another confrontation.

MATTHEWS:  Well said, Andrea.  I think if you can‘t be as tough as McCain, Barack Obama, for his own good politically, better be clearly smarter than McCain, and that is the challenge, the hill he has to climb, show that he‘s shrewder in how he deals with this very tricky situation.  Thank you, Andrea Mitchell, chief foreign affairs correspondent for NBC News.  She‘s up in New York.  And Roger Simon of “Politico.”

Coming up: Where does the presidential race stand right now?  We got a brand-new map to show you.  Forget the map of 1960 and ‘68 and ‘80 and 2000 and 2004.  We got a brand-new set of battleground states where Obama and McCain are running strong.  Some states are moving blue, some are moving red.  Let‘s catch up with Chuck Todd.

Plus, former House majority leader Tom Delay on the state of the Republican Party, which apparently isn‘t so peachy right now.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  The NBC News political unit has some brand-new battleground maps on the fight for the White House.  Let‘s check in with NBC News political director Chuck Todd.  Chuck, dazzle us right now, will you, because I‘m thrilled with this.  Obama‘s strength‘s in the Northeast, the West Coast and around the Great Lakes.

CHUCK TODD, NBC POLITICAL DIRECTOR:  Well, it is.  And I think the

most interesting part about our map today is the fact that you start seeing

he‘s putting away a state like Washington.  That was something that McCain wanted to put in play, but they know they really can‘t.  There was talk at one time that maybe John McCain could run well in the old Rockefeller Republican wing of the Republican Party, places like Connecticut.  And you know, maybe New Hampshire‘s still in play, but Connecticut and Maine, two states, those seem to be off the table.  So you‘re seeing a strengthening of Obama‘s base.

MATTHEWS:  So these are the states that are off the board now. 

They‘re taken now by Obama, based on a big...

TODD:  Pretty much.

MATTHEWS:  ... wide spread in the polling.

TODD:  I‘ll say this...

MATTHEWS:  What do you consider a polling spread that guarantees that one party‘s probably going to win it, 10 points, 15 points?

TODD:  Well, I think when you start seeing double digits.  And that‘s what‘s...

MATTHEWS:  OK.

TODD:  ... got to be scaring the McCain people when it come to Wisconsin, Minnesota.  I mean, the other fascinating thing, Chris, about Obama is what I call the region of Illinois.  And that is all of these states that touch Illinois are states where Obama is overperforming.  In Wisconsin, it means he‘s got a double-digit lead in a state that has been decided by razor-thin margins, McCain just not playing well there.  Minnesota doesn‘t touch Illinois, but it‘s in the—in the geographic region of Illinois.  It‘s a state that somehow Obama is putting out of play.  Iowa, he‘s ahead, a state that has been decided by razor-thin margins.  Missouri, a state that we really thought was going to be a McCain state, now feel like it‘s more of a toss-up, again Obama overperforming.

And then we‘ve got Indiana.  And we haven‘t shown this map yet . It‘ll come up in a minute.  But Indiana we only have as a “lean McCain” state. 

Why?  Because there‘s a lot of private polling, Chris, that I‘ve heard about that has Obama still ahead in Indiana.  Some of is it residue from the fact that Obama spent millions of dollars in the state to win (SIC) the primary.  But still, you‘re seeing what I call this Illinois strength that you know, where, literally, in this region of Illinois, if it touches Illinois, every state except Kentucky, Obama overperforms.

MATTHEWS:  OK.  We‘re looking at a map right now, Chuck, of the strength that McCain has established, where he really can‘t be beat.  I‘m looking at old familiar states like Utah now...

TODD:  Right.

MATTHEWS:  ... certainly, his own Arizona.  And then you go down to the South, the Southeast.  That seems to be in play.  But look at Texas, Oklahoma, Mississippi, Alabama, Louisiana, Arkansas.  They all seem to be pretty solid for McCain right now.

TODD:  They do.  And it‘s interesting.  Let me pick out three here that I think some people might say, Hey, why do you have them as solid?  Arkansas, Louisiana, Mississippi—all three at one time, you would hear Democrats toy with the idea.  Obama just has not played well in Arkansas.  I think if Clinton either is on the ticket or if Clinton were the nominee, we would have Arkansas not in dark red.

Mississippi, Alabama, even, maybe even South Carolina, Louisiana, there was some chatter that, Oh, you know, maybe the spike in African-American turnout that some people expect.  But what you‘re seeing, you‘re not seeing any strength yet of Obama with white voters in those states.

MATTHEWS:  OK, just to keep...

TODD:  You know, in order to put those states in play, you‘ve got to be able to not only have that strong African-American turnout, but also do well among white voters, and he‘s not.

MATTHEWS:  Just to make it clear, when we‘re looking at these areas of strength for Obama, and now just we just saw a map of those big red states in the South—strengths—you‘re saying, basically, those are the states where McCain or Obama have, like, a double-digit lead right now.

TODD:  That‘s right.

MATTHEWS:  OK.  Now let‘s look at the tossup states, because this list is getting longer and longer than it ever was before.

(LAUGHTER)

MATTHEWS:  Look at these states.  We have got some Rocky Mountain states, Nevada, New Mexico, and Colorado.  Then, we have—we have the Eastern states, and even Pennsylvania, New Jersey.  It is amazing.  Pennsylvania in there.  Ohio in there.  We know that.  Tell us about those states where—what are the new states being added to the tossups? 

TODD:  Well, the big new one is Missouri.  And I would say—and then other folks might say, well, geez, why do you have Florida in there?  Or why do you have Pennsylvania or why do you have Michigan?  Because in all of these things, you can push them. 

But this early out, Chris, you feel like, if these are single-digit races—in every one of these things, it‘s a single-digit race at this point, where neither candidate is up by more than a few points—and you sit there, you say, Florida, you know that McCain has a bunch of strength.  Yes, that‘s true.  But you have Obama seeming he got a bump.  And there have been a couple of polls that have shown him ahead, and he has the money to keep it close. 

Pennsylvania is one.  Obama is ahead.  And he is ahead by good single digits.  But that‘s all it is right now is sort of a strong single digit.  And you are seeing McCain put such an emphasis.  There are no three more important states to John McCain than Michigan, Ohio, and Pennsylvania. 

He feels if he sweeps those three states, he will be president of the United States, that there is a hard time for Obama to get to 270 if he somehow doesn‘t have Ohio, Pennsylvania and Michigan, those three, if he doesn‘t have any of those three in his column.

Now, Obama is trying to create a battleground map that makes it so that he only has to win one of those three that I pointed out, in Michigan, Ohio, and Pennsylvania.  He wants to be able to do this without—being able to do this with only winning one of the three. 

Right now, polls show that he is ahead in Michigan, he is ahead in Pennsylvania.  But I will tell you, I wouldn‘t put a lot of stock in it.  I think McCain, with his running mate pick, if he‘s going to think about a region or a state, he is thinking about those three states. 

MATTHEWS:  I think he has got to be thinking of Mitt Romney again, don‘t you? 

TODD:  A little bit.  And I will tell you, I think he wishes he could think about Tom Ridge. 

MATTHEWS:  OK.

TODD:  I think the fact that Ridge is pro-choice, he has throw him off. 

But I will tell you, if you took Pennsylvania off the map for Obama and you put it in the McCain column, I challenge to you get to 270 for Obama.  It‘s tough.

MATTHEWS:  Yes, Ridge is very popular in Pennsylvania.  I think he would deliver Pennsylvania for him.  It would be very close, but then he may even help in Ohio and he may help in Michigan.  But I don‘t know if that‘s worth taking on the Christian right on the abortion issue.  

TODD:  It would make—they would all sit there and say of McCain, see, we told you so.  We told you McCain didn‘t care about our issues.  He didn‘t care so much, he picked a pro-choice running mate.  It makes it tough.

MATTHEWS:  And I‘m not sure Cheney would endorse him at that point.  I think it would get really tough.  Anyway, I think Cheney doesn‘t like Tom Ridge too much. 

TODD:  Well, I don‘t know.

(CROSSTALK)

TODD:  National security.  We will see. 

MATTHEWS:  I love these intramurals.  I love to know who doesn‘t like somebody. 

Anyway, thank you very much, Chuck Todd.

TODD:  You got it, buddy.

MATTHEWS:  Speaking of which, let‘s turn now to former House Majority Leader Tom DeLay.  I know you don‘t care about these things, who doesn‘t like you, right?

TOM DELAY ®, FORMER HOUSE MAJORITY LEADER:  Yes, right.

(LAUGHTER)

MATTHEWS:  Do you think it is possible that McCain will overcome his distaste for Mitt Romney and put him on the ticket and win this thing by going into those states that the Democrats use own Pennsylvania, Ohio, Michigan? 

DELAY:  I think it is very possible.  I think Romney is certainly the top leader right now on the list.  There‘s some—the governor of Alaska is around there somewhere. 

People have seemed to have forgotten Mark Sanford, the governor of South Carolina.  But, Romney, yes.  What is interesting—I can‘t dispute anything that you have shown here. 

MATTHEWS:  That‘s a development for us. 

(CROSSTALK)

MATTHEWS:  Objective truth here for you. 

DELAY:  The tossup map is the most important thing to look at.  And we‘re back to 2000, 2004.  The states on the red and blues are pretty much the same.  You have those tossups.  It is really down to New Mexico, Iowa, Michigan, New Hampshire.

MATTHEWS:  Yes, look at that, though, Mr. DeLay.  You have Virginia on the tossup.  You have got Pennsylvania a tossup.  These states are never tossups.  So, we might have an exciting campaign.

DELAY:  Yes. 

MATTHEWS:  Let me ask you about your Republican Party, which you have fought so hard and some people would say a little bit over the top in winning for, grabbing some of those C.D.s down in Texas in an off-year.  You‘re grinning, but nobody liked it on the other side. 

DELAY:  The Republicans did.

(LAUGHTER)

MATTHEWS:  I know you liked it.  And the people you put into office did. 

Tom Davis, your colleague from Virginia who is retiring—and he‘s been a very active party builder with you, a moderate Republican—he said, if the Republican Party were a dog food, it would be taken off the shelves right now.  Is it that bad?

DELAY:  It‘s pretty bad, yes. 

And I‘m through with pointing fingers as to who is the problem.  It is time for the conservatives/Republicans to life their head up and start looking towards the future and what we can do for the future and turn it around. 

MATTHEWS:  But a lot of people would say the biggest thing that went wrong with the Republican Party wasn‘t the personality of this president or the war in Iraq, but it was the fact that the Republicans weren‘t Republicans.  They ran up big spending in the last seven years.  They overspent.  They didn‘t balance the budget.  They weren‘t fiscal conservatives. 

DELAY:  We did balance the budget in the ‘90s, the first time since the ‘50s.

(CROSSTALK)

MATTHEWS:  I‘m talking about the last eight years. 

(LAUGHTER)

DELAY:  And last eight years...

(CROSSTALK)

MATTHEWS:  Do you know the national debt has gone from $6 trillion to $10 trillion?

DELAY:  And we fought a war.

MATTHEWS:  I know.  It‘s gone $4 trillion.  That didn‘t all go to the war. 

DELAY:  Almost a trillion of it is the war. 

MATTHEWS:  Four trillion. 

DELAY:  Yes. 

MATTHEWS:  The world economy is 50-some trillion.  We owe $10 trillion. 

DELAY:  I understand.  But it still—as a percent of GDP, it has grown a little.  But it‘s not still not frightening.

MATTHEWS:  What are you, John Kenneth Galbraith? 

DELAY:  No.

MATTHEWS:  Those are the old liberal arguments.  It‘s only—it‘s a percentage of GDP.  You don‘t think overspending has been a problem for the Republicans? 

DELAY:  The perception of overspending is a problem for the Republican.  And it is a bad problem for the Republicans.  And they can change that by what they‘re doing right now. 

And most of it is going home, and talking to their constituents, and giving them an agenda, an aggressive agenda, that includes not just spending.  It is not spending.  It is redefining government.  We need to go back to constitutional principles that appeal to our base. 

That‘s what they want to hear.  They want to see leadership.  And our members are starting to do that.  Whether they can do it by ‘08, I don‘t know.  But they certainly should have a long-term plan to turn this around.  And we can do that.

MATTHEWS:  Do you think we are going to go to war before the election? 

DELAY:  I think it‘s possible with Iran.

MATTHEWS:  Do you think Israel might want to take a—Olmert is—they have got a weak government in Israel.  He may be and feel in a position he has to act to show his strength.  You know what is going on over there.  You know that region. 

We may decide—Cheney may say and influence the president to say, look, if Israel has to attack, it will take them 2,000 sorties to do the job.  We could do it in a day.  Why don‘t we do it clean and get it over with, because we will get blamed anyway?

DELAY:  And particularly if Obama is the next president. 

MATTHEWS:  Well, tell me what you think, as a conservative.  Do you think we should move over there between now and the election? 

DELAY:  Absolutely.  We should have moved a lot earlier. 

MATTHEWS:  What should we do? 

DELAY:  Well, first and foremost, we should blockade Iran, quit dallying around in all this diplomatic and sanctions.  They‘re obviously not working.  But you could go straight to a blockade of Iran. 

(CROSSTALK)

MATTHEWS:  And what would happen then? 

DELAY:  They would stop driving their cars.  And the pressure at home would start growing by—by huge amounts.  But we should never take a military strike off the table. 

(CROSSTALK)

MATTHEWS:  What about Olmert calls up you and—he calls up you and says, should I go?  What would you say? 

DELAY:  I would say go. 

(CROSSTALK)

MATTHEWS:  Attack?

DELAY:  But maybe we want to go.  Maybe it is better for the U.S. to do it, rather than Israel to do it. 

MATTHEWS:  Is that where you are on that right now? 

DELAY:  That‘s where I am. 

MATTHEWS:  Go?

DELAY:  No, not right now.  But if things deteriorate over the next two to three months, then, that option has to be considered. 

MATTHEWS:  Because you said one of the reasons being that Barack Obama is coming into office possibly and that he wouldn‘t do it. 

DELAY:  He wouldn‘t do it, not at all. 

(CROSSTALK)

MATTHEWS:  Do you think this is a common belief around the White House crowd, of the Dick Cheney crowd and the president?  Do you think they‘re actually thinking about acting now, while they still have a chance to end that nuclear threat from Iran? 

DELAY:  I can‘t answer that.  I‘m not in touch in them.  I haven‘t talked to them.  So, I really have no feel for that. 

MATTHEWS:  On a scale of one to 10, how has George Bush been as president? 

DELAY:  I think he has shown leadership. 

(CROSSTALK)

MATTHEWS:  On a scale of one to 10? 

DELAY:  On a scale of one to 10, I would say a six or a seven.  And history may—if the Middle East turns out the way I think it will, if we hang tough, he could move that to an eight. 

MATTHEWS:  Can you see yourself kicking back with him someday, drinking near-beers with the president, having a good time?

DELAY:  And cigars.  He likes cigars.

MATTHEWS:  OK.  Well, thank you very much, Congressman DeLay.

Thank you, Tom DeLay, who built the Republican Party and then saw something happen to it. 

Up next: John McCain‘s not-so-P.C. idea of how to deal with Iran.  This is a little comical.  Let‘s make sure we get this right.  This is a joke.  He makes that clear.  But it is tricky stuff. 

Plus, Conan O‘Brien‘s take on Barack Obama‘s efforts to redraw the electoral map and how well he will do at the next NASCAR race he goes to. 

And that‘s ahead in the HARDBALL “Sideshow” tonight.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  And time now, of course, for the HARDBALL “Sideshow.”  You saw the merry-go-round there.

Anyway, earlier in the show, we told you the Obama camp hopes to put conditional Republican strongholds in play this fall.

Well, late-night host Conan O‘Brien gave us his take on the effort last night. 

(BEGIN VIDEO CLIP, “LATE NIGHT WITH CONAN O‘BRIEN”)

CONAN O‘BRIEN, HOST, “LATE NIGHT WITH CONAN O‘BRIEN”:  Barack Obama campaigning very hard, going everywhere these days to get the vote out.  Barack Obama‘s staff recently announced that Barack is planning to hold a campaign event at a NASCAR race.  Yes.  Yes, the event will be called “Meet Your First Black Guy.” 

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  It‘s amazing what you can say on late-night television. 

Anyway, well, it is witty—if it is witty off-the-cuff comments that have given Senator McCain a reputation for straight talk, sometimes, it is a hit, and, sometimes, it is well...

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  That old—that old Beach Boys song, “Bomb Iran”?  Bomb, bomb, bomb—anyway. 

(END VIDEO CLIP)

MATTHEWS:  Well, either way, McCain was up to his old antics at a sandwich shop in Pittsburgh, Pennsylvania, yesterday.  Listen up.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  We have learned that the exports to Iran increased by tenfold during the Bush administration.  The biggest export was cigarettes.  Given that the—yes, that—supposedly, the...

MCCAIN:  Maybe that‘s a way of killing them. 

(LAUGHTER)

MCCAIN:  I meant that as a joke. 

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  Well, at least he stuck in that disclaimer.  It‘s just a joke. 

Anyway, now for “Name That Veep.” 

Back in February—actually, back in January, this former senator abandoned his presidential ambitions, though it now looks like he‘s itching to get back on the ‘08 trail.  This Democrat told National Public Radio yesterday that he would seriously consider a spot on Barack Obama‘s ticket as V.P.  He may not have endorsed Obama as early as his other rivals, but his message resonates with a key constituency that Obama has had trouble with.

Or—who is he?  So, who is he?  Well, it is former North Carolina Senator John Edwards.  Who knows.  Maybe he will be the Democratic Party‘s once and future V.P. nominee.  Time now for tonight‘s “Big Number.”  It‘s been a couple weeks since Obama asked his top donors to—quote “get out their checkbooks” to help retire Hillary Clinton‘s campaign debt, no small feat, as the Clinton campaign racked up over $23 million in IOUs.  At any rate, the response from Obama‘s donors has been, well, underwhelming. 

According to the “New York Times,” just how much have Obama donors given to retire Clinton‘s debt?  Less than $100,000.  That‘s right.  The famed Obama money machine, which has come up with $230 million for Obama‘s candidacy, has yet to come up with even $100,000 to retire his main rival‘s debts—less than $100,000, that‘s tonight‘s not so “Big Number.” 

Up next;  Barack Obama and Hillary Clinton share the stage tonight.  But what is with all the ongoing animosity among their supporters, especially their big money supporters?  Obama supporters won‘t help pay Clinton‘s campaign debts.  And Clinton supporters still haven‘t warmed up to Obama.  We will find out what‘s going on from former Clinton campaign manager, former Democratic National Committee chair Terry McAuliffe.  The inimitable, indomitable Terry McAuliffe is coming here in just a minute.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

BERTHA COOMBS, CNBC CORRESPONDENT:  I‘m Bertha Coombs with your CNBC “Market Wrap.”

Stocks took a tumble today, as concerns over the slowing economy and financials shook an already jittery market.  The Dow fell 237 points.  The S&P 500 slid 29.  And tech-heavy Nasdaq tumbled 60. 

Shares of mortgage firms Fannie Mae and Freddie Mac led the decline.  They federally backed lenders were hammered by fears they will be forced to raise billions of dollars in capital to cover their losses in the weakening housing market.

After a two-day fall, oil jumped as much as $3 a barrel, after the Energy Department reported U.S. stockpiles fell last week much more than expected by analysts before, at the end of the day, oil just closed up just a penny. 

And Steve & Barry‘s, a retail chain known for cheap chic offerings, has filed for bankruptcy.  The chain established its reputation by selling fashion items for $20 or less, including a collection known as Bitten by the actress Sarah Jessica Parker. 

That‘s it from CNBC, America‘s business channel—now back to

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL.

Hillary Clinton and Barack Obama are together tonight for a big fund-raiser in New York.  But is there still bad blood between their supporters?  I think there is. 

Terry McAuliffe is a former chairman of the Clinton campaign, former chair of the Democratic National Committee, and once again, a unifier.  Is that right?

TERRY MCAULIFFE, FMR CLINTON CAMPAIGN CHAIR:  You bet.

MATTHEWS:  You were bringing them all together.  I want to ask you about something, because I can‘t sometime tell whether you‘re selling or you‘re thinking.  Right?  When you said the other day to somebody that you thought—you saw the “Chicago Sun Times”—that you really think that Barack Obama will pick Joe Biden, the long time senator from Delaware, and the chairman of the Senate Foreign Relations Committee as his running mate.  Do you deeply believe he is the best prospect right now?  Most likely to get it? 

MCAULIFFE:  I didn‘t tell a newspaper.  I actually was at a restaurant in Aspen, Colorado, and with the new world of Youtube and everything else, a table of Obama supporters from Illinois and others were there, state legislators from Illinois.  They said who do you think?  I said if I had to bet my mortgage today, I bet you Joe Biden.  I think Joe Biden was the best one we had on TV in ‘04 talking about the Iraq war in the general election.  He‘s been crisp on Iraq.  He‘s laid out—

MATTHEWS:  How is the chemistry between those two? 

MCAULIFFE:  Good.  Joe Biden was great in the—I saw everybody on the campaign trail.  Joe Biden knows the foreign policy.  I think Senator Obama wants to—obviously, on the issues, he needs someone to help with that.  Joe is chairman of the Foreign Relations Committee, knows this stuff inside out.  You know, that was a guess.  If you ask me today, he could pick Hillary.  We don‘t know.  There‘s a lot of choices he could have, Chris. 

MATTHEWS:  What about the Hillary problem?  I‘ve been looking at the problem in Pennsylvania and states like that.  Hillary does very well among Democrats.  I think she solves all your problem on the Democrat side.  How do you reconcile putting her into these states like Pennsylvania, Ohio, Michigan, where it is going to be close, where she doesn‘t seem to pick you up?  In fact, she hurts you among independents.  How do you deal with that?

MCAULIFFE:  First of all, if you look at the numbers that she brought out when she was running, she got 18 million votes plus.  She did very well in those states.  She brings the blue collar vote out.  She brings out the vote, Chris, that you have to have in a general election.  She excited women.  She excite blue collar.  She excited seniors.  She excited Hispanics.  Those are key core constituencies.  So, you know, we‘ll see where we go down the road.  But whatever the role is, Hillary Clinton has said she will do anything. 

MATTHEWS:  She was wonderful.  We‘re looking at that amazing event when they actually kissed and all.  It was about the best make-up session I‘ve ever seen.  It was warm.  It was human.  She was delightful.  But yet the people around her, especially a lot of the older women, are tough cookies.  Let‘s face it, they‘re tough political people.  They believe in her.  They call themselves Hillary girls to this day.  Is there anyway that Barack Obama can bring them over?  What does he have to do to make them his people, even though they‘ll always be Hillary people? 

MCAULIFFE:  I would today that most of the people have come over.  I would argue that we‘ve been more unified today than what we‘ve seen in the past.  You know the—

MATTHEWS:  Why does the press keep quoting these people that aren‘t unified? 

MCAULIFFE:  Eighteen million people; they want to go out and find a couple people, that‘s how you sell newspapers.  The idea was the “New York Times” was going to do another story whacking Hillary Clinton.  Is this news?  Of course not.  This is just how they ran the whole campaign.  I‘m sorry. 

But you know what?  We‘ve had huge events for Barack Obama.  Tonight, over a million dollars will be raised from Clinton supporter for Senator Obama.  We had a huge event in Washington the other night.  She went to New Hampshire.  1980, as you know, Senator Kennedy went all the way to the convection.  1984, Jesse Jackson -- 

MATTHEWS:  You just ripped the scab off it.  Do you think there ought to be a role call at the convention where you can exercise your vote for Hillary and have one of those exciting races, where they call on Pennsylvania and most delegates go for Hillary.  They call on Ohio, most go for Hillary.  And all through all those states she won; do you think we should have that kind of theater at the convention?

MCAULIFFE:  I don‘t want theater. 

MATTHEWS:  Do you think there ought to be a vote, a roll call where Hillary people express themselves for Hillary. 

MCAULIFFE:  The issue on this it deals with legal rules through the DNC.  Barack Obama is the nominee.  We want to do everything we can. 

MATTHEWS:  So they can change the rule overnights.  What are you saying, rules?  You can always change them.  If you don‘t want to embarrass the front-runner, you can avoid that. 

MCAULIFFE:  We don‘t want to embarrass the front runner. 

MATTHEWS:  So you wouldn‘t want a role call?

MCAULIFFE:  It‘s not my decision.  But I don‘t see the benefit of having a role call today.  Of course not.  Listen, we have to be focused on winning this election.  I have been working 24/7, as have others.  Hillary and I have done dozens and dozens of phone calls to all of our people around the country; let‘s go.  We have to win it.  The issues are too great.

Listen, you‘ve never seen at this stage, two people come together, a first and second place finisher.  It didn‘t happen for Bill Clinton in 1992.  Bill Bradley, as you know, did not release his delegates in 2000 against Al Gore until the convention.  I could go through the 30 years of our party, we‘ve never had this before. 

MATTHEWS:  Let me ask you a really tough questions.  The race lasted longer than it had to, perhaps, some people would say.  Do you believe that last two or three months of debating, of campaigning, after Iowa, after New Hampshire, after the decisive battles in North Carolina and Indiana.  Do you think Hillary made Barack a better candidate? 

MCAULIFFE:  I do.  You and I had this discussion many time during the trail.  I made the argument and I came in as the former party chairman.  I think to have all these people excited to go to the polls was a good thing.  We were proven right.  Look at the polling date today.  Senator Obama was not hurt at all by this process. 

MATTHEWS:  Would Hillary win this race if she was as good as she is today, starting the race? 

MCAULIFFE:  I‘m not going there. 

MATTHEWS:  No, I‘m just saying, if she was as good starting the Iowa caucus fight as she is ending the fight. 

MCAULIFFE:  If she could have won the Iowa caucus, she would be the nominee today.  But that‘s just how our system is.  I can‘t complain about the system.  I don‘t look back.  I look forward.  Hillary gave a great speech that Saturday.  She said don‘t go there.  Let‘s go forward.  We have to win this.  I think 25 to 30 seats in the House, seven seats in the Senate. 

MATTHEWS:  How many senators after this is all over for the Democratic party, 55, 56? 

MCAULIFFE:  Fifty six, 57. 

MATTHEWS:  Really, pick up Gordon Smith? 

MCAULIFFE:  Look at Mississippi, Ryan Musgrove is up six.  We could do Kentucky with Bruce Lunsford.  We could win Alaska.  We could win Oregon.  We could end up winning Minnesota. 

MATTHEWS:  That would be 58. 

MCAULIFFE:  New Hampshire, we‘ve got.  We look at Virginia, New Mexico, Colorado. 

MATTHEWS:  You‘ve got at least those two.  I can see a 55.  You think you could get up to 56? 

MCAULIFFE:  Here‘s the important thing as a Democrat, 80 percent of the state legislative seats are up.  They‘re up.  You know what that affects?  2010 redistricting.  We have to stay together.  We could win it all.  This could be a sweep.  Chris, this could be all ours. 

MATTHEWS:  Come on election night.  Get the vote out.  Terry McAuliffe, once and future chair of the leader of all party Democrats.  Up next, the politics fix.  Barack Obama votes to let phone companies off the hook—a little metaphor there—for helping the government conduct secret spying here at home.  Will his vote today alienate some of his core supporters?  Good question.  This is HARDBALL.  By the way, Hillary voted against that bill.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL and the politics fix.  Tonight‘s round table, MSNBC political analyst Michelle Bernard, Jill Zuckman of the “Chicago Tribune” and the Salon‘s Joan Walsh. 

Joan, what do you feel, as well as think, about Barack Obama‘s vote today in support of the Bush administration‘s position that we should immunize the telecommunications companies so that we can use them to help spy on Americans? 

JOAN WALSH, SALON.COM:  You know, I feel angry today honestly, Chris.  I feel, first of all, that Barack Obama shredded the Fourth Amendment.  I liked the Fourth Amendment, speaking for myself.  I feel that he didn‘t have to do it.  I also feel and believe and know that he reversed a promise he made during the primary campaign.  I think a lot of Obama supporters are having a very difficult time today because of that. 

He made a promise that he didn‘t keep.  Now, we‘re hearing from people inside the Obama campaign.  Hey, nobody cares about that.  Listen, 25,000 Obama supporters joined a group on his own website, MyBarackObama.com, to protest what he was going to do.  People do care. 

Finally, for people who don‘t care or maybe support what Obama did, this raises a trust question.  He‘s done a lot of this zigging and zagging.  Even our friend, Bob Herbert this week wrote a column about Obama lurching in different directions.  I think this is a tough week for Obama and I‘m angry that he sold out the Fourth Amendment.   

MATTHEWS:  Anybody have a counterpoint to that?  Did he do what he had to do as a presidential candidate?  Did he do what he had to do as president, which is to immunize the phone companies so they can get that information against, in some cases, dangerous people? 

JILL ZUCKMAN, “THE CHICAGO SUN”:  Here‘s what Senator Obama says; he said that he voted for a compromise, that, ultimately, we had to get these modern techniques into law so that law enforcement can go about and do its business, that he couldn‘t allow this to go anymore.  The McCain campaign agrees 100 percent with Joan that he is doing what is politically expedient and flip-flopping. 

MATTHEWS:  Voting with McCain.

ZUCKMAN:  Another point of view might be that he‘s doing what he needs to do to try to get elected. 

WALSH:  I want to make a point though.  I believe John McCain did not even bother voting.  So whatever you think about this bill, that‘s the lowest thing to do.  As usual in the last couple weeks—come on, it matters.  As usual in the last couple weeks, the only thing that makes Barack Obama look good is that John McCain looks worse.  That‘s kind of pathetic in my opinion. 

MATTHEWS:  Michelle, do you want to give us another view here?

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  I think Barack Obama did what he had to do on this bill.  Understandably, if you go and you look at the blogs, his base is very angry, particularly people who are big on—very, very big progressives on civil liberties.  But everything that he‘s done over the last week is going toward the center.  What would happen if he were the president of the United States.  I think, if you look at the bill as a compromise bill and you try to decide how you balance the legitimate privacy needs of American citizens versus prosecuting and collecting information against terrorists, he probably did the right thing. 

MATTHEWS:  I always wonder, if we don‘t use this technology and we get blown up again, the people who didn‘t use the technology will be blamed.  

WALSH:  Chris—

MATTHEWS:  I know they will be.  We‘ll be right back with—you don‘t have to agree with me.  Just say OK because we‘re out of time, not because you agree with me.  We‘ll be back with more of the politics fix and Joan Walsh for the opposition.  You‘re watching HARDBALL, only on MSNBC.  I mean that.  I mean it.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN:  I do see a renewed enthusiasm and concern on the part of our European allies, as well as other Democratic nations in the world.  So, I think that hopefully this event will serve as a catalyst that will finally gel all of the different factors that have been out there, that will allow us then to act with our friends and allies in a most effective fashion, and modify Iranian behavior.  We cannot allow a second Holocaust. 

(END VIDEO CLIP)

MATTHEWS:  We‘re back with the round table for more of the politics fix.  A second Holocaust; of course, John McCain this morning referring to the test firing by the Iranians of some medium and long range missiles, apparently to the range of Israel and some European countries, to show that they have the fire power to deliver conventional and/or nuclear weapons anywhere they want to send it in the region. 

Jill Zuckman, a second Holocaust; it looks to me like politics is in play here, serious politics. 

ZUCKMAN:  Senator McCain has taken a very hard line on Iran for a long time.  One of the thing he talks about is President Ahmadinejad‘s own words, calling Israel a stinking corpse, calling the Holocaust a myth.  He goes on and on and on like that.  Senator McCain is very clear that he doesn‘t think Iran should get any benefit of the doubt from the United States.  I think that does play well with a lot of voters who are concerned about Israel. 

MATTHEWS:  Joan Walsh, is this usual politics in America, Mideast politics, ethnic politics?  Anything unusual about it, over the line, within the line, appropriate politics, whatever? 

WALSH:  I think a little bit over the line.  Second Holocaust?  Come on.  Again, this is John McCain helping Barack Obama, because he sounds like a lunatic and he makes clear that he‘s running for Bush‘s third term.  He‘s sounds like a neo-con in the room with Cheney, plotting the next strike against Iran.  It‘s really beyond mainstream politics, in my opinion.

MATTHEWS:  Are you channeling me, Joan? 

WALSH:  Chris, sometimes we agree. 

MATTHEWS:  Sometimes I do hear Dick Cheney talking when John McCain talks. 

WALSH:  Absolutely.  Absolutely. 

BERNARD:  Sometimes I do, sometimes I don‘t.  I don‘t think he sounds like a raving lunatic today, but I think it‘s very dangerous to insinuate that we‘re getting ready for World War III.  You know, shortly after Senator Clinton made the comments about RFK and the possibility of assassination, we had a discussion on the program about certain things you don‘t talk about.  One of the things we talked about was people use the Holocaust over and over and over again.  I think that Senator McCain probably need not do that. 

MATTHEWS:  There‘s an old rule, never compare anything to the Holocaust.  Anyway—even in this case, perhaps.  Michelle Bernard, thank you.  Jill Zuckman, thank you, Joan Walsh.  Join us again tomorrow night at 5:00 and 7:00 Eastern.  Now, it‘s time for RACE FOR THE WHITE HOUSE with David Gregory.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END   

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