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updated 10/29/2009 11:06:30 AM ET 2009-10-29T15:06:30

HARDBALL

October 28, 2009

THIS IS A RUSH TRANSCRIPT.

THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED

Guests: John Heilemann, Melinda Henneberger, Barry Levinson; Gerald Posner, Rep. John Yarmuth, Rep. Bart Stupak

CHRIS MATTHEWS, HOST: Should we quit Afghanistan?

Let's play HARDBALL.

Good evening. I'm Chris Matthews up in Boston. Leading off tonight:

Bad news from the war front. Americans woke up today to a triple play of bad news in Afghanistan and Pakistan, a devastating terrorist bombing in Pakistan, an attack by gunmen in Kabul on U.N. employees and the lead story in "The New York Times" that the suspected drug-dealing brother of Afghanistan's president, Hamid Karzai, has been on the CIA's payroll for much of the past eight years. Should Obama now up the ante in Afghanistan with more troops and more U.S. treasure? Is Afghanistan, long the graveyard of empires, looming as American quicksand?

Plus: Could the issue of abortion torpedo health care reform? Democratic congressman Bart Stupak of Michigan warned that he'll work with Republicans to take down the bill if it does include taxpayer funds for abortions. He'll be here tonight to talk about what could be the killer issue for health reform.

Also: Do celebrities who back politicians and causes know what they're talking about? The man who directed "Rainman" and "Wag the Dog," Barry Levinson, has a new documentary called "Poliwood" on the intersection between politics and celebrities. He's going to join us later.

And it ain't over yet, but with less than a week to go to election day, Governor Jon Corzine of New Jersey could be pulling ahead. We will run down all the big elections next week in the "Politics Fix."

And the idea of George W. Bush as a motivational speaker remains the number one late night set-up line. That's in the "Sideshow" tonight.

Let's start with the attacks today in Pakistan and Afghanistan, more than 100 people killed in Pakistan in a market today, mostly women and children, at least five U.N. workers killed by Taliban, including one American. And then this front page "New York Times" story headlined "Brother of Afghan leader said to be paid by CIA."

Richard Engel is chief foreign correspondent for NBC News. He joins us from Kabul, Afghanistan. Does it surprise you today that "The New York Times" led with the story that the brother of the president of Afghanistan is working for us, getting paid by the CIA?

RICHARD ENGEL, NBC CORRESPONDENT: I had not heard that until I read it in "The New York Times." There are many, many reports about the brother of President Karzai and his allegations or alleged links to the drug trade and links, potentially, as a go-between to the Taliban. And he has been for a long time a lightning rod of attention in this country, so I wasn't surprised to see this story about him. But I hadn't heard anything about links to the CIA before this.

MATTHEWS: Well, that's odd because I heard about it before. In fact, I heard about it 24 hours ago from a good source who said it's well known. So we'll see how this develops as a story.

Let me ask you, is this splash of bad news over in that region likely to be read by White House officials as a reason to increase the number of troops by 40,000, as recommended by General McChrystal, or as reason to think that hard before going ahead that far?

ENGEL: I think it'll be both. And if you argue, as General McChrystal does, that the Taliban have the momentum right now and that they need to be stopped, well, then, you certainly have evidence of that today with the first time the Taliban going really into the heart of the city, carrying out this attack on a hotel that was used by U.N. workers. What they did is they first killed the guards outside, climbed over a wall and then were going room to room, looking for U.N. staff. Some of the people had to jump out of windows on the upper floors.

So if you believe, like General McChrystal, that this is a serious problem and that the Taliban's momentum needs to be rolled back, then you have evidence of that. If, however, you believe that this is a lost cause and that without a real political situation and a new strategy, then you could also say, Well, look what just happened today.

MATTHEWS: You know, there's a lot of talk back here in America that the president will take a middle course, and that scares a lot of people because smart people, many of them believe the worst possible policy is somewhere middling down the middle, that if you're going to try to win that war, you better put in as many troops as the generals ask for because the only way to bring security to the main population centers and help rebuild the country. If you want to get out, that also makes sense because you're saying to Karzai, You take over.

What do you hear over there in terms of the middle course? Is it seen as a rational position or a political position?

ENGEL: It's seen here by people that I spoke to as a political position. I've heard very similar to what you are hearing by senior military commanders. They say, If you want to do this, if you want to resource it, then send in the troops and try the new strategy. If you think that the war is not beneficial to Americans' national security and that exiting is the better approach, well, then, a larger, different policy needs to be thought up for Afghanistan and Pakistan. But I've heard from no one here saying that splitting the baby is a good idea.

MATTHEWS: Let me ask you again about the political situation of the brother of the president, Karzai. His brother-what was said today by John Kerry, the chairman of the Foreign Relations, committee was kind of tough. He said now that he hears that the CIA is paying the president's brother, he doesn't believe the CIA's assessment that the brother is not in the drug business.

ENGEL: The role of the brother here and the role of government in general is so sensitive right now. I've been told by people very close to Karzai that Karzai has asked the Americans specifically to lay off his brother and to stop these allegations. So Karzai, from people who I know who are quite close to him, has become fairly politically paranoid over the past several months, sees conspiracies, sees articles like this in "The New York Times" as deliberately planted by the U.S. State Department to try and cut away his legitimacy.

The issue of the brother is one that Karzai takes very personally and is sensitive right now because there is no political leadership. There were supposed to be elections here on the 7th of November. I can tell you there are no visible signs that those elections are going to take place on the ground. We don't see any kind of activity. In fact, the Taliban today said it carried out that attack on the U.N. compound to try to prevent the elections. But we don't see momentum, posters going up, any kind of political rallies. It doesn't seem that the elections are going to-or are as imminent as they are scheduled to be. MATTHEWS: OK, thank you very much, Richard Engel in Kabul, Afghanistan.Let's bring in "The Washington Post's" Pulitzer Prize-winning columnist Eugene Robinson, who's also an MSNBC political analyst, and investigative journalist Gerald Posner of the Dailybeast.com.Gerald, I understand you talked to the president's brother over there, and he denies-well, wouldn't he? -- that he's on the CIA payroll. And his denial, by the way, in the presidents looks like an admission. He says, I get money from my brother from the U.S. government, but it isn't stamped CIA. I don't make it official.What do you think of that, that denial?GERALD POSNER, DAILYBEAST.COM: I agree with you. It's a non-denial denial. I mean, he's vehement. It's no question "The New York Times" touched a real nerve today with the Karzai brothers. I mean, I talked not only to Ahmed Wali (ph), who's the-you know, the accused Pablo Escobar of Afghanistan and now on the CIA payroll for eight years, but also spoke to Mahmoud Karzai, who's one of the most prominent and successful businessmen in the country under his brother's presidency. And both of them said this is a "New York Times" plot. This is part of an effort to destabilize the country. It's part of a left-wing effort of the groups that fund "The New York Times" to make sure that the Americans pull out of Afghanistan.But if you look in between the lines, he says things like-Ahmed does-I'm not a spy. I never get a check from the CIA. He receives money from front companies. And as you know-Chris, you've been around this-intelligence agencies all around the world create companies so you have plausible deniability if you're on their payroll.He's been helping us for a long time with the Taliban and he's clearly been an intelligence asset. Now they have to answer as to whether they've been protecting him on the heroin trade. That's a separate question.MATTHEWS: Gene, let me get to you. I liked your column today, like I often do. I think you made a good point, so make it. What do you think about whether we should pull out of Afghanistan or give them the 40,000 more troops the general wants?EUGENE ROBINSON, "WASHINGTON POST," MSNBC POLITICAL ANALYST: Well, I don't see a good future for the U.S. involvement in Afghanistan, and I think that-I think that there are no good choices, but the least bad choice, I think, is to bring the troops home.But I agree with something that you said earlier and I think it's absolutely true. You can't take a middle path, and that's-President Obama is-is-likes to destroy false choices. He says we get hung up on choices that aren't really mutually exclusive and we should-we should look at things in a different way. But sometimes choices are real choices, and I think this is the case.MATTHEWS: Yes.ROBINSON: You either give the generals what they want or you-or you-or you don't and you come up with a new policy that involves fewer U.S. troops and a withdrawal.But you know, here's the-here's the-here's why no sane person wants to be president. Three DEA, Drug Enforcement Administration, agents were killed in Afghanistan in one of those helicopter crashes over the weekend. And so the U.S. government sent them there to fight the Afghan drug trade, and now we learn from "The New York Times" this morning that the U.S. government is also financing a man reputed to be a major player in the Afghan drug trade.Did somebody make a phone call to the loved ones of those DEA agents and try to explain why we were funding the very thing they were trying to combat and why they gave their lives? It's-and who makes that call but the president? It's- it's is a tough situation, but the contradictions are mounting.POSNER: But you know...MATTHEWS: Gerald-Gerald, why do I know that-why do I know at least the account that Karzai's brother is on the payroll of the CIA and Engel didn't know it over there? I mean, I got the word back here in Washington. I'm not saying my sources are fantastic, but they were-I got this story before it hit "The Times." And this story rings true to me. And I just wonder why we're dealing with this situation. We're paying off we're-I used the phrase "rotten pashas." If we're going to be buying people over in the Middle East, we ought to at least keep it secret.POSNER: Well, yes, but the amazing thing here, Chris-and you know this and Eugene does, as well. We did this in Southeast Asia. Remember, we were funding the Burmese armies of Kun Sa and others. We were funding the lost remnants of Chiang Kai-Shek's armies who had taken over the Golden Triangle, producing the heroin...MATTHEWS: Yes.POSNER: ... that was addicting U.S. soldiers in Vietnam. And now we're funding the corrupt pashas and-you know, and the tribal leaders, who have one foot in the Taliban's camp and one foot in the American camp because they're not quite sure who's going to win. But they have a hand also in the opium pot, which-and we see addiction rates going up with U.S. soldiers.We should have learned this lesson from Vietnam, and we haven't learned it. And there are no good choices here, but there are a lot of bad choices that can be made. Now that the Obama administration is confronted with the fact that the brother of the president has been on an intelligence payroll, they're going to have to ask the hard question as to whether he also has a foot in the opium trade. And if he does, it's going to certainly help Abdullah Abdullah, his opponent, in the upcoming election.MATTHEWS: Yes. Gene, I loved what you said in your piece because it was another way of saying Solomon was wise.(LAUGHTER)MATTHEWS: I know that sounds redundant, but when he recognized the true mother is the one who didn't want the baby cut in half and the false mother is the one who accepted the simplicity of splitting a baby in half because although it sounds logical, it's horrific...ROBINSON: Exactly.MATTHEWS: The true person chooses the policy they think is good for America, even if they don't like it ideologically. They're willing to recognize there's good policy even if you disagree with it. But there's no good policy down the middle here. I just don't know why Obama, the president, would choose to give General McChrystal a few more troops when he knows McChrystal has calculated exactly how many troops he needs to secure the main population areas, which is essential to the policy of counterinsurgency. Why would he give them less troops-why do you throw a 50-foot rope to a guy drowning 100 feet from shore?ROBINSON: Exactly. You don't. And if it is-if he's going to go with a counterinsurgency policy, then the only way forward is to give the generals the number of troops they say they need to enact that policy and to make it work. It makes absolutely no sense to give them half or two thirds or some fraction of the troops they need.MATTHEWS: OK...ROBINSON: You know, I covered the drug wars in South America during the late '80s and early '90s, and the DEA was swarming all over the Andean countries and there were guerrillas fighting and they were profiting from the drug trade and government officials were on the take. I mean, this is a nasty, dirty, scummy business.MATTHEWS: Yes.ROBINSON: And once you get profitable drug enterprises in the middle of a civil war or any kind of war, you-there is no good side and there is no good way forward. It kind of drags you down to its level, its sordid level. And that's what I think is likely to happen in Afghanistan.MATTHEWS: OK, thank you very much, Gene Robinson and Gerald Posner, two great reporters. Thank you.Coming up: Could the hot button issue of abortion derail health care reform before it gets passed? Democratic congressman Bart Stupak of Michigan says he'd be willing to work with Republicans to kill the bill if it does allow taxpayer funding of abortion. Congressman Stupak's bringing that fight right here next.You're watching HARDBALL, only on MSNBC.(COMMERCIAL BREAK)MATTHEWS: Welcome back to HARDBALL. Will President Obama's health care plan allow for taxpayer-funded abortions-subsidies, in other words? Some House Democrats say it will unless they can put language into the bill now that affirms the federal policy known as the Hyde amendment that's been in place for 30 years and says you cannot spend federal dollars on abortions.Joining me right now are two Democratic congressmen, Michigan's Bart Stupak and Kentucky's John Yarmuth. Gentlemen, listen to what the president said when he addressed you in joint session a couple weeks ago. Here he is.(BEGIN VIDEO CLIP)BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And one more misunderstanding I want to clear up. Under our plan, no federal dollars will be used to fund abortions and federal conscience laws will remain in place.(END VIDEO CLIP)MATTHEWS: Congressman Yarmuth, as you read the bill now, does it provide federal money to subsidize people who get health insurance?REP. JOHN YARMUTH (D), KENTUCKY: To have abortions? No. What the bill does and what the Capps amendment that was added in the Energy and Commerce Committee is basically maintain the status quo in the Hyde amendment standards. And we think that's where it would be. This is not the appropriate forum to actually re-debate abortion. We've been trying to do that for 36 years. And right now, the most important thing is that we get a comprehensive health care bill passed. This bill does not do that.As a matter of fact, if you wanted to stretch that argument further, you would end all taxpayer-or tax breaks to employer-based insurance because about 80 percent of private plans cover abortions, and you would also probably end federal subsidies to some hospitals who perform abortions. So there's no limit to where you could take it if you want to end all federal support that even indirectly could be involved in an abortion.MATTHEWS: OK. Congressman Stupak, does the bill now-it's headed toward the floor in the House-provide subsidies for abortions?REP. BART STUPAK (D), MICHIGAN: Yes, Chris, it does. It does. In fact, everyone who plays in the public option must pay $1 per month per enrollee into this abortion services. And for the firsts time ever, federal policy recognizes abortion as a benefit. It's in section 122. It was called the Capps amendment in the Energy and Commerce Committee, the committee in which I said-in which I offered the counter-amendment which basically says, Keep the Hyde amendment. No public funding for abortion.I agree with John. We should not be having this debate on abortion. It should be on health care. So, let's maintain the law, and let's hold President Obama to his word. MATTHEWS: OK.Well, let me ask you, Mr. Yarmuth, what would wrong-be wrong with taking the president's words from his speech to you in joint session and offering that as an amendment on the floor that says no money here can be going toward subsidizing abortion? Would that be all right with you? YARMUTH: Well, that really doesn't clear up the problem, because, again, there are so many different ways that you could argue that federal funds could be used to support an abortion, again, through hospital funding or tax breaks for insurance policies. MATTHEWS: No.YARMUTH: Yes. I think what we are talking about is direct funding. We already make this distinction in the Medicaid laws. We preserve the Hyde amendment. We segregate funding in those states that allow abortion, so that no federal funds are used to pay. They segregate those accounts. So, it can be done. We know how to do it. And there is no reason we can't do it here. MATTHEWS: But let me ask you this, Mr. Yarmuth. Then, why is Mr. Stupak opposed to this? Why would anybody something who is anti-abortion if there is no abortion money in this? (CROSSTALK) MATTHEWS: Why-why are you having this debate if there is no abortion money in here? It doesn't make any sense. YARMUTH: Well, I think there's real-I think there really isn't that much of a debate, to be honest. I think there is widespread consent that we-or consensus that we are not going to use taxpayer funds. The question is how you define it. And-and I think what Bart wants to do-and I have the greatest respect for his conviction on this issue-what he wants to do is go a lot further than the status quo.And that is make it-basically, change the terms of a lot of insurance policies that people now have. And a woman under his amendment, as I understand it, shopping in the exchange for insurance would not be able to buy coverage for insurance, even with her own money. She would have to actually buy a separate rider, which means she would have to plan for an unplanned event, which I think is illogical. MATTHEWS: OK. Mr. Stupak, let's get back not to the question of the exchange, but to the subsidy. STUPAK: Sure, Chris. MATTHEWS: I understand English language to conversation. If you subsidize ethanol, you are subsidizing it. If you reduce the price of something by using federal dollars to somebody, you are encouraging it. I understand exactly why you're in this debate. If you reduce the price of something by using taxpayer money to subsidize it, you are in effect encouraging it. STUPAK: Correct.MATTHEWS: Make that point, the way you want to make it. STUPAK: Sure. I mean, even the Capps language says, in the exchange, at least one plan-could be nine out of 10 -- must have abortion coverage. We have never gone there before. The Hyde language is very clear. You do not use public funds to pay for abortion or for policies. And we are just saying maintain the law that has been on the books for 35 years and let's live up to the president's word, no public funding for abortion in this health care plan, and we are happy... MATTHEWS: OK. STUPAK: ... and we can go away.MATTHEWS: Mr. Yarmuth, I understand Chris Van Hollen. Let's listen to him. I think he's trying to broker this and get a health care bill that does not provide for abortion coverage. Here he is. Let's listen to him trying to broker this.(BEGIN VIDEO CLIP) REP. CHRIS VAN HOLLEN (D), MARYLAND: Well, we are working very closely with Bart Stupak and that coalition of Democrats and the Republicans that they have reached out to on this issue to write the bill in a way that makes it absolutely clear that no public dollars, no taxpayer dollars can go to fund abortions as part of the health care reform bill. (END VIDEO CLIP) MATTHEWS: OK. I don't think anybody wants to see health care die over this issue. Mr. Stupak, whatever you think, I think most people don't want it to happen. So, is there any way to avoid this at this point?STUPAK: Chris, in the last 12 hours, we have had some good conversations. We're starting to share some language.We would like this resolved before the bill comes to the floor, so we don't have to have a rule fight on it. We would like to get this resolved internally. And, hopefully, we can. I appreciate the dialogue we have had in the last 12 hours. And let's continue that dialogue, get this matter resolved, no public funding for abortion, and let's get health care passed. MATTHEWS: Mr. Yarmuth, are you willing to compromise on this, or do you think you have issued your final position on this, the lowest Capps position? You think you have already dealt with it, right? YARMUTH: Well, I think that is probably the best solution I have seen. I would be open to a different set of words on it.Again, I think we are actually seeking the same objective here, but we we have to make sure we don't go too far and have a lot of unintended consequence, which is to change basically all the insurance policies which exist now. MATTHEWS: It seems to me, Mr. Stupak, that the speaker has about 38 votes to spare among Democrats and still pass this bill and get 218. I'm not sure of the exact math. How many votes do you have to block it? STUPAK: Around 40, 41. MATTHEWS: So, you can stop health care reform in its tracks?STUPAK: Well, no, we can't stop it. What we do, we would delay it. They would have to go back to the Rules Committee, bring back the rule, and make our amendment an order which says no public funding for abortion. And then we can move on with health care.MATTHEWS: Well, what will happen? Well, what-what will...(CROSSTALK) STUPAK: We don't-we don't-we don't stop it. MATTHEWS: OK. STUPAK: We just delay it. MATTHEWS: OK. And then the pro-choice people, who are adamant on this issue and don't want any differential, they don't want any higher premium for people that want abortion coverage, they will go to war, won't they?Mr. Yarmuth, won't you go to war if they make these changes? YARMUTH: Well, I'm not-I'm not sure I would go to war. But I think there are probably enough votes that would go to war. And what it would effectively do is would make Bart-put Bart in a lose-lose situation, because, if he lost his amendment, he wouldn't get what he wanted, and if he-if he got what he wanted, he would lose the bill. So, eventually, it wouldn't be any change in the law. So, I think it would be tough if Bart prevailed, with the more pro-choice segment of the caucus. MATTHEWS: Mr. Stupak, will you bring down the health care bill if you have to? STUPAK: I will prevent the rule from coming up, which would prevent the bill from coming to the floor by blocking the rule. I'm not interested in torpedoing health care. I would like to see health care. I'm excited about our chances, the closest we have ever come as a country. This issue was resolved about 35 years ago. Let's stick to it, as point says, no public funding for abortion in health care, and we can resolve this difference, and move on, and provide health care for all Americans. MATTHEWS: Well, good luck to all of you. It looks like something that smart politicians ought to be able to deal with.Thank you very much. Congressman...YARMUTH: I think we can.STUPAK: Thank you. MATTHEWS: ... Bart Stupak and Congressman Yarmuth, thank you for both coming on.YARMUTH: Thank you. MATTHEWS: Smart people can disagree. Up next: Do you think the idea of George W. Bush as a motivational speaker is a hoot? What until you hear what Jay, Conan and Colbert have to say about it. They are living this, Bush motivating. You're watching HARDBALL, only on MSNBC. (COMMERCIAL BREAK) MATTHEWS: Back to HARDBALL and the "Sideshow." First up: more on George W. Bush's motivational speeches. (BEGIN VIDEO CLIP, "THE JAY LENO SHOW") JAY LENO, HOST, "THE JAY LENO SHOW": In a speech in Canada, former President George W. Bush said he was proud that, when he was in office, that he didn't sell his soul, which is true. (LAUGHTER) LENO: He rented it to Dick Cheney...(LAUGHTER) LENO: ... who then sublet it to Halliburton, but it is totally different. (LAUGHTER) (END VIDEO CLIP)(BEGIN VIDEO CLIP, "THE TONIGHT SHOW WITH CONAN O'BRIEN") CONAN O'BRIEN, HOST, "THE TONIGHT SHOW WITH CONAN O'BRIEN": Yesterday, former President George W. Bush made his debut as a motivational speaker. Yes. (LAUGHTER) O'BRIEN: Afterwards, Bush said the crowd was so motivated, many of them left halfway through. Yes. (LAUGHTER) (END VIDEO CLIP) (BEGIN VIDEO CLIP, "THE COLBERT REPORT") STEPHEN COLBERT, HOST, "THE COLBERT REPORT": Speaking of his presidency, he said-quote-"Some days were great. Some days were not so great."(LAUGHTER) COLBERT: Whoo! (LAUGHTER) COLBERT: I mean, that covers all the days. (LAUGHTER) COLBERT: Listen to how pumped-pumped up Bush got attendee Patrick Kruger from Lubbock, Texas, who said-quote-"He wasn't the best speaker."(LAUGHTER) COLBERT: I mean, that is a vast improvement from the last time Bush packed a stadium full of people. (LAUGHTER) (END VIDEO CLIP) MATTHEWS: Ah, Katrina. It is hard hiding from history, when it lives so close. Anyway, here is some wicked talk from viper-tongued Gore Vidal. Here is his barbed advice the president on health care-quote-"Well, if I were President Obama, I would just give up. I would just say to the country, the Republicans will not allow these things to come to a vote without a filibuster. We cannot get through, so, good luck, take two aspirin, and you will all die of the next epidemic."Well, Vidal used to fight at a much heavier weight than this. Republicans are just too easy for this guy. Next, guess who is stumping up in New Jersey this weekend? U.S. Congressman Joe "You Lie" Wilson. He is looking to get the vote out for Republican governor candidate Chris Christie at an event, but put together by a tea party activist. There is just one hitch. The rally is not organized by the Christie campaign. In fact, the event organizer says Christie is not even attending, even though he will be only a half-mile away at that time.Anyway, that might be smart politics for Christie in a state that has shown itself to be a lot more blue than red these days. I'm not sure the "You Lie" guy is going to help Christie much. Anyway, for the "Big Number" tonight: Capitol Hill's version of the fall classic last night. Members of the U.S. Congress squared off against U.S. Capitol Police officers-I used to be one of those guys-as part of an annual flag football game for charity. After losing three years straight, this time, the politicians, including Speaker Pelosi and Congressman Anthony Weiner, brought in the ringers, former players for the NFL. Hmm. So, after the game went into overtime, guess who won? Well, the members of Congress, with their ringers from the NFL, won 32-26. Well, the politicians, with a little professional help, get their first win against the police by, well, cheating-a margin of six points, tonight's "Big Number." I'm playing for the cops next time. Up next: Hollywood and Washington and the role celebrities play in politics. Barry Levinson will be here to talk about his new movie, "PoliWood." You're watching HARDBALL, only on MSNBC. (COMMERCIAL BREAK) HAMPTON PEARSON, CNBC CORRESPONDENT: I'm Hampton Pearson with your CNBC "Market Wrap."Stocks tumbling today, as a big drop in home sales spurred concerns about the pace of the recovery. The Dow Jones industrials fell 119 points down, the S&P down almost 21 points, and the Nasdaq dropped 56 points, or more than 2.5 percent. Investors were taken by surprise by a huge 3.6 percent drop in new home sales in September. Economists were expecting that number to rise, as it has for each of the past six months. Meanwhile, mortgage applications fell for the third straight week, homebuyers taking a wait-and-see approach as Congress weighs whether to extend a first-time homebuyer tax credit past its November 30 deadline. And Goldman Sachs adding to skittishness today, downgrading its forecast for tomorrow's GDP report. Goldman said sluggish orders for durable goods mean a full-fledged recovery is still a long way off. That is it from CNBC, first in business worldwide-now back to HARDBALL. Welcome back to HARDBALL. Many notable celebrities were following Barack Obama and John McCain during last year's conventions, but they are actually being followed now by Oscar-winning director Barry Levinson, director of blockbuster movies like "Rain Man" and "Good Morning Vietnam" and "Wag the Dog."He decided to turn his camera on politically active actors in his documentary "PoliWood" about the modern-day relationship, some think too close, between Hollywood and politicians.Let's take a look at his doc here, and then we will hear from Barry Levinson. (BEGIN VIDEO CLIP, "POLIWOOD") ANNE HATHAWAY, ACTRESS: A lot of people think that celebrity advocacy is just another way of getting your name in the papers. And that is actually the last thing in the world that I'm here for. I'm really just here to listen and to learn.TIM DALY, ACTOR: Yes, I would-I would doubt you need another photo-op. (LAUGHTER) DALY: I think you're probably OK.HATHAWAY: I'm not-I'm not really here for any other reason. And then here I am trying to educate myself as a young woman in America, and I'm wondering if I'm actually being irresponsible when I'm asked a question about something regarding this, and I don't know how to answer it because I just don't have enough information. DALY: Right. HATHAWAY: And it sounds like such a cop-out to say, I'm not educated about that. I wish-I-I don't want to speak on a subject that I know very little about. I think that the-people think that we are very careless with our opinions and that our beliefs are quite casual. (END VIDEO CLIP) MATTHEWS: I love that. Who doesn't like Anne Hathaway? Barry, thank you for coming on the show. BARRY LEVINSON, DIRECTOR: Thank you. MATTHEWS: You know, my dentist, Tom Boylen (ph), he lives in-he has a house in Cape May, New Jersey. And he would be sitting on the beach and one of the neighbors' kids was that person, Anne Hathaway. And it's just amazing how, you know in the business you're in, somebody goes from being somebody next door to being a movie star. And the next thing you know, people like me are asking them, like last night-last night, Woody Harrelson was on HARDBALL, and I'm asking him where he stands on Afghanistan.And he blew me away. He just said: "Well, how would I know? I'm an actor."(LAUGHTER) MATTHEWS: What are the-they never do that, though. They always say, well, that's a very important question.LEVINSON: Right. MATTHEWS: And then they give me some-some pontification. LEVINSON: No, and the truth is.Yes. The truth might-is, in fact, Anne and her feelings, because it is a couple of years, you know, since she's been really known. And, suddenly, she's being asked with questions that she doesn't necessarily know answers to. She wanted to go to the DNC. She wanted to see the process, see how it works.And, suddenly, there you are in a spotlight with a microphone in your face. MATTHEWS: Well, what do you make of it? It always seemed to me that the smart-the smart thing for a celebrity, if they wanted to influence public opinion, was, don't go on TV shows. Go home to the town where they came from, almost in a biblical sense. Go to the local charities, whatever, hang out with some people, and then get quoted in the paper. Hometown girl comes home and gets quoted.And that might influence some people. LEVINSON: Well, but they are not really there to influence. See, that's-that's, I think, the misconception. MATTHEWS: OK. LEVINSON: In the case of, say, Anne Hathaway, and the other actors, they were really there just to see, you know, the process. Some have been to a couple conventions. Many of them hadn't been.MATTHEWS: Yes. LEVINSON: And they just want to take it all in. They are really not there to answer questions or to be part of the-the-the whole circus. They are just kind of, as responsible citizens, see how it works, what is our process, and be involved in that regard, as opposed to give opinions on subjects. MATTHEWS: You mean they are just using it as a seminar?LEVINSON: Well, they are learning in some cases. A few are there not to support candidates, but simply to highlight certain causes they feel very strongly about. MATTHEWS: I don't know about that. I had Sarandon on. I've always liked her in the movies. And I had her on back in the Chicago convention, the DNC commission, back there with Clinton renomination. She was on for Nader. I said, you're for Nader. She said, yes. I said, you're big on capital punishment. She said I'm against it. Then I asked the Katie Couric question, the best question in the world, the obvious one; so where is Nader on capital punishment? And she didn't know. Then she and Tim Robbins, another I guy I respect, got real mad at me and stormed off. They don't know what they are talking about in a lot of cases. LEVINSON: I-first of all, there are very few that support candidates that actually come out for it, because they are so put down for actually having an opinion on that that most of them really don't get involved in the supporting of it. They just have certain issues that they are concerned about. You know, that whole kind of thing of this concept of the Hollywood elite, of the demonizing of those in Hollywood, and therefore they can't say anything about any of the issues, as opposed to some are responsible citizens. Some may say the right things or the wrong things. They are just people. They are citizens in the end of the day. MATTHEWS: So what is the advice you would give them? I know you are here to talk about your documentary. I'm going to see it. But isn't the smart move to limit-like when you go to a racetrack, only bet on the horses you know. Stick to a couple issues you understand? LEVINSON: That is one of the aspects of the documentary, which is actually said at different times, because most celebrities, in terms of Hollywood, basically don't really speak out. There are only a very few that actually do, because they are and have always been political. Most of them don't, because there is no upside to any celebrity speaking out on behalf of a candidate. There is no real upside to it. There is only a negative to it. They get nothing from it. MATTHEWS: Really? LEVINSON: No. I mean, it is not going to enhance your career in any way because you support so and so. You may support that person. You are not going to get another job because of it. You are not going to get a writing assignment or directing assignment just because you happen to be passionate about a given candidate. But there is a negative to it, because whoever you or whatever you support, almost 50 percent of the people are going to be opposed to what you have to say. So there isn't an upside. MATTHEWS: I once went to a Barbara Streisand concert. I like her. I was really amazed. I think she was amazed. I talked to her afterwards. She asked the audience, how many people here voted for the Republican candidate in the last election, and how many voted for the Democrat. It was almost 50/50. She was blown away. She thought everybody at her concert would be a liberal Democrat. A lot of Republicans-I know they're going to be amazed to hear this-a lot of Republicans like Barbara Streisand, because they like her singing. LEVINSON: It shouldn't be surprising. There are a lot of actors and actresses people like. They may be Republicans or Democrats. I don't think that-she may have been surprised. I'm actually surprised that she is surprised, because music and how people enjoy it should have no political definition to it. But we live in a strange time where we polarize everything. We want to make every issue a polarizing issue, which is unfortunate and, in some ways, is bringing our entire political system to a halt. MATTHEWS: Great. You are one of the greatest directors ever, Barry. Thank you so much for coming on HARDBALL. Good luck with the documentary, "Pollywood." LEVINSON: Thank you. MATTHEWS: Thank you. Up next, less than a week to go before election day and there's three races that matter, the governors races in Jersey and Virginia, especially Virginia, and the special election in this strange district-it's not strange, it's a strange focus we're having. Up in upstate New York, a 23rd district fight, where the conservative third party candidate could knock off the Republican candidate and maybe let the Democrat win. A weird three way race that could set the trend for the next couple years. The fix is coming up on MSNBC.(COMMERCIAL BREAK)MATTHEWS: Welcome back to HARDBALL. Time now for the fix. John Heilemann writes for "New York Magazine" and Melinda Henneberger is the editor at PoliticsDaily.com. Two heavyweights on tonight with a heavyweight question. Elections coming up next week which could decide which way the wind is blowing. The new Quinnipiac poll from Jersey has the incumbent, Jon Corzine, leading Republican challenger Chris Christie by five points, with the trend line looking very good for the governor. By the way, a three-way race there with Daggett, the moderate Republican, sort of the Tom Kaine type, running on the outside. He may be the killer. What do you make of that race? You first Heilemann. You're from up there. What do you make of this thing?JOHN HEILEMANN, "NEW YORK MAGAZINE": Look, I think the Democrats would like this election to be today or a couple of days from now. Daggett has been the key factor, in addition to Christie's poorness as a candidate. The worry among Democrats and the Corzine people is that Daggett kind of peaked too soon, and that if his support recedes fast over the course of the next week, Corzine could be in trouble. I think that race is going to be very close. MATTHEWS: I agree. I think Christie could pull this off if there is no organizational support for Daggett. It's one thing to do well in a poll. But when you don't have a political party behind you, forget about it, as they would say in Jersey. Let's take a look at a new poll in Virginia. I want you to lead here, Melinda. Virginia governors race; this could be the premier race in the country because Terry McAuliffe was in that primary. He lost out to this guy, Creigh Deeds, who had the endorsement of the "Washington Post," who looked solid for a while. Now, he's getting killed. He's down by 18. It looks to me like the trend line is lethal for this guy. What is going on in a state that went for Obama just a year ago? Melinda? MELINDA HENNEBERGER, POLITICSDAILY.COM: I think that Obama-this race will be a little bit of referendum on Obama, but not maybe as much as Republicans would like to think. I think that's it true that maybe Obama not pulling the trigger one way or the other on Afghanistan has hurt him with that Virginia swing voter, who is maybe a little bit more militaristic than swing voters elsewhere in the country. But really the problem here was not just the candidate of Creigh Deeds, but his campaign being so negative in a way that I think was just a huge turnoff in a purple state like Virginia. And also, when you have a guy like Deeds who is not negative by nature, I just think it is not a good fit for him. He wasn't true to himself. And that never works. MATTHEWS: It is hard to build a whole campaign on somebody else's term paper. He's going after the other guy for writing some right-wing stuff about 25 years ago. Let's take a look at the New York 23rd. Heilemann, this is another New York race that's fascinating. Here's one of those crazy little races, like the Battle of Gettysburg. It's way up there north, but it's going to decide so much down here. You got Doug Hoffman running as an independent conservative, running against the incumbent-or the Republican regular. Her name is Scozzafava. She's pro-gay rights or gay marriage. She's pro-choice, et cetera, et cetera, which bothers conservatives. And then you have the Democrat over there. You have Bill Owens, who may well scoot by both conservatives. What do you make of that race? HEILEMANN: It's a funny race. Chris, I know you want to look at the national implications here. It's a question-the Republican party is kind of in open revolt. Scozzafava, she is to the left of Owens. She's such a liberal Republican that she's arguably more liberal than the Democrat. You've got, just like in the Senate race in Florida-you have a Tea Bag candidate who is running against this Republican who's seen as an apostate. I think it does foretell something about the kind of conflict that we're going to see in a lot of Republican races in 2010, where you have challengers from the right to anyone who's considered centrist or an apostate to the conservative line. MATTHEWS: I think it's Tea Party, not Tea Bag. But you can play the game all you want here. I know you're having fun with this.HEILEMANN: I am.MATTHEWS: I know you are. Why is-if it's not a national race, to challenge Heilemann there, John, why is Sarah Palin involved in this? Rick Santorum has come back from the dead to fight this. And inimitable Michele Bachmann, all up there raising hell for this guy Hoffman, whose name keeps escaping me. What do you make of that, Melinda? HENNEBERGER: Well, I think it's a great race. I mean, when you have the Republican candidate calling out the police for fear of being menaced by a reporter from the "Weekly Standard," you know, you can't beat that. I think they're doing-the conservatives are doing this because they can, and because they want to fly the flag in this race that may not mean that much nationally. So I'm just not sure that it's going to translate into a bigger picture. MATTHEWS: You caught my interest there. Somebody from the neo conservative "Weekly Standard" got physical with somebody? Explain. HENNEBERGER: They didn't get physical with somebody. The Republican candidate called the police because she felt she was being aggressed verbally by a reporter for the "Weekly Standard," and so the police was called. People who saw the so-called incident said that it was perfectly civil, and the candidate just didn't like the tenor of the question. MATTHEWS: Well, anyway, when it comes to neo-conservatives, I think they do prefer verbal aggression. Not to knock it. I like verbal aggression too. We'll be back in a moment with John Heilemann and Melinda Henneberger to talk about the very tricky issue. Abortion has raised its head in this fight over health care. It could be a troubling, even defeating issue in the last couple days. You're watching HARDBALL, only on MSNBC.(COMMERCIAL BREAK)MATTHEWS: Of course, the big game's tonight, the first game of the world series. The Philadelphia Phillies, world champions, taking on the New York Yankees. It could be the most exciting World Series in at least a decade, and very important to Philly that we win this one. Tonight I think will decide it. If the Phillies win tonight, I think the odds are about even. Anyway, we're back with John Heilemann and Melinda Henneberger. We'll talk about something as desultory as abortion rights. John Heilemann, it seems to me that this issue could fall at the last minute over an issue like this. Bart Stupak of Michigan was just on. He's trying to work out a deal that that allows the Hyde amendment to take effect again, which is no federal money going to abortion. The problem is you're subsidizing plans that already include abortion coverage. I don't know how you solve this problem. HEILEMANN: I don't know how you solve this problem either, Chris, in terms of the details. But I think I agree with something you were saying a little earlier in the show, which is that it doesn't seem conceivable to me that this is actually the issue over which health care folds. It just seems the stakes are just too high and it seems like the compromise has come around on this issue before. And I think it has to come around again. There's so much-some of these Democrats have so much on the line in terms of health care. The failure for it, for other reasons, would be so devastating at this point for the Democratic party. I can't believe this is going to be the issue-if everything else gets solved, that this is going to be the final stumbling block. It seems crazy to me. MATTHEWS: It seems to me the smart conservative movement, or pro-life move, Melinda, would be simply to say, take the president's language from his speech to both Houses a couple weeks ago, where he said there's no subsidy in this for abortion, and apply it as an amendment. There shall be no subsidy in this bill for abortion. Then everybody has to live with it or else admit they're basically fooling each other. HENNEBERGER: That's what's in the bill now in essence. There is no money in the Senate bill or the House bill for abortion. And that is already the case. I think what they want to do is go beyond what just maintaining the Hyde amendment. They want to say no money can go-not just for abortions, but to providers of abortions, which would be a-a huge thing to do. It would go well beyond this. This-health care is not going to end over this because there's not going to be any money in these bills for abortion. I mean, I am where Bart Stupak is on this issue. But I do not agree with his approach with these amendments, because there's so much misinformation out there in the pro-life community about what's already in the bill that I'm not worried at all health care is going to founder over this. MATTHEWS: Here's how simple it can be: if you have an insurance program-policy which covers abortion as one of the procedures that's covered, health procedures that's covered, and the government comes along and subsidizes that health plan, is that subsidizing abortion, yes or no, Melinda? That's the issue. HENNEBERGER: It's not. But if we go that far, I mean, I just don't see how you can interpret going that far as holding the status quo on the Hyde amendment. That's something totally different. Are we only going to give money to Catholic hospitals? I don't think so. MATTHEWS: I'm doing as best I can to clarify this issue. It's a tough one. Thank you very much, John Heilemann. A lot of races up in your ballpark. It looks like Jersey-by the way, I think Christie can still win this thing. And I think that one in upstate is impossible to pick. All the votes are in motion up there. Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL. Right now, it's time for "THE ED SHOW" with Ed Schultz.THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.END

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