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updated 11/19/2009 11:18:15 AM ET 2009-11-19T16:18:15

Guests: Mike Viqueira, Norah O‘Donnell, Julia Boorstin, Ceci Connolly, Joan Walsh, Jerry Nadler, Dan Lungren, Eugene Robinson, Steve Kornacki

CHRIS MATTHEWS, HOST:  Show time for health care.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews in Washington.  Leading off tonight:

Senate Democrats make their move.  Senate Majority Leader Harry Reid is meeting with Democratic senators right now on Capitol Hill, unveiling his proposal for health care.  He‘s already met with three Democratic senators, Landrieu, Nelson and Lincoln, who have not yet committed to vote for reform.  And we now have the critical cost analysis just out from the CBO, the Congressional Budget Office.  Whether health care passes may be determined by what happens this evening.

Last night, U.S. Congressman Bart Stupak of Michigan, the author of that amendment banning any subsidy of health care that covers abortion, said on HARDBALL that he‘s willing to compromise on his language.  He does not want to expand restrictions that exist now on abortion or prevent insurance companies from providing private coverage for abortion services.  He just wants to make sure no federal money is being used.  Could this be an opening to get health care passed?

And let my people go.  Sarah Palin‘s in Michigan today, drawing huge crowds for her new book that blasts John McCain‘s campaign adviser.  People lined up as she kicks off her book tour, but members of the McCain campaign itself are lining up, as well, to say Palin has written a book of fiction and fabrication, to use their words.  And today John McCain himself praised both his adviser Nicolle Wallace, who says the book is, quote, “based on fabrications,” and campaign manager Steve Schmidt, who has his problems with the book.  Watch this thing get hotter.

Also, terror on trial.  The voices of opposition to trying Khalid Shaikh Mohammed in New York are growing louder.  Republicans are out there stoking fears of new terrorism to build opposition to the decision to bring the trial to New York.  The politics of trials and terror coming up.

Plus, there seems to be no end to the head-shaking stories about John Edwards.  Remember him?  He ran for president.  The latest is that he offered to endorse Barack Obama for president after Hillary Clinton had won that New Hampshire primary in exchange for being promised to be vice presidential running mate.  He also told the Obama people that if they didn‘t take him up on his offer to make him VP, he would make the same offer to Hillary Clinton, offer to endorse her so that she would make him her VP.

Well, anyway, some guy down in Texas now says that he needs Dick Cheney back.  I‘m not sure in what capacity.  That‘s in the “Sideshow.”

We start with health care reform and NBC congressional correspondent Mike Viqueira and “The Washington Post‘s” Ceci Connolly.  I think it‘s fair to say that a lot of people, maybe not all, but a lot of people who watch this program, Mike and Ceci, want to see health care advance.  They want to see more people covered by insurance than are covered right now.  They want to see something better than we have right now in this country.

So the question is, do the new numbers that came out from the Congressional Budget Office tonight, in terms of the cost and in terms of how many people are going to be covered by the Senate plan, help the cause of health care reform or not, Mike?

MIKE VIQUEIRA, NBC CORRESPONDENT:  I‘ll go first.  OK.  I think the answer is marginally, Chris.  I think, you know, when you‘re talking about a $1.2 trillion House bill versus an $849 Senate bill, I mean, either way you look at it, it‘s an astronomical amount of money, but the fact that it is actually lower might help give some people cover, like Ben Nelson, Mary Landrieu and Blanche Lincoln—we talk about those three—to go ahead and allow just the debate to get started on the Senate floor.

The House bill would cover 96 percent of Americans, this one would cover 94 percent of Americans.  There might be carping about that.  Both bills, in the end, according to the CBO, would reduce the deficit somewhere in the order of just over $100 billion after 10 years.

I think that the problem they are still having is the public option opt-out.  And I would like to make one warning to everybody out there as we get all wrapped around the axle about this word that‘s just come out of the majority leader‘s office about the cost of this bill, this CBO score that we‘ve been waiting for for three weeks—we haven‘t seen a bill yet.

And Harry Reid, whether he‘s going to present an actual bill to Democrats as he goes behind closed doors right at this moment or not and put it on the floor to start that clock ticking, to start these procedural votes that‘ll get the ball rolling—they say they want this vote, this test vote, before they leave for Thanksgiving.  That translates to Friday or Saturday, Chris.  Whether he has that bill, whether he has 60 votes to start the debate, that‘s still up in the air, notwithstanding the fact that these numbers appear to be encouraging at this point.

MATTHEWS:  Ceci, what are the big issues?  I guess one is costs, but let‘s talk about this public option.  The House has dealt with this issue.  The Senate has to deal with it.  Is it likely right now there will be a public option?

CECI CONNOLLY, “WASHINGTON POST”:  Chris, I think it‘s still very hard to predict.  As you were saying, the House bill does have what they call a public option.  It‘s not quite as robust—that‘s the term of art these days—as many of the liberals in the House would have liked.  They wanted to pin those payment rates to Medicare rates.  The hospitals and doctors vehemently objected.  So the version in the House says the folks running that public plan will have to go and negotiate with doctors and other health care providers on rates.  So it‘s not quite as left-leaning as some folks had wanted.

In the Senate, Senate Majority Leader Reid has been talking about, as you mentioned, this opt-out provision that‘s a little bit different.  It would give states some flexibility on whether or not they want to go forward.  We really don‘t even know if that could pass muster in this Democratic Senate.  There are some, including independent senator Lieberman, who has been on record from the very beginning saying he doesn‘t want any of that in the bill—he can be quite firm, even stubborn, some of his colleagues would say.

So I think it may end up being subject to an amendment that gets knocked out, as we see in the coming weeks.

MATTHEWS:  Let me go to you, Mike, first, even though you are a male...

(LAUGHTER)

MATTHEWS:  You‘re also a straight reporter, so let‘s start with you, and then I‘ll get to Ceci because this is a very troubling issue to both sides.  The House passed a bill a couple weeks ago which includes a ban on any federal money going to cover insurance policies which provide for abortion services.

We had Bart Stupak on last night, who was the sponsor of that amendment.  Here he is, I think showing some, well, desire not to be the person who brings down health care.  He doesn‘t want to be in that role.  I think that‘s fair to say.  Let‘s watch him from last night here, and then respond.

(BEGIN VIDEO CLIP)

REP. BART STUPAK (D), MICHIGAN:  Do we have to put a line in there that says, Look, you can still—you can have private funding for abortion?  I mean, my amendment says that.  But if you want a clarification, we‘re willing to put that in there.  We are not restricting insurance policies...

MATTHEWS:  Right.

STUPAK:  ... or individuals from using their own money...

MATTHEWS:  Would you be...

STUPAK:  ... to get abortion services.

MATTHEWS:  Would you be open to an amendment to the bill that comes out of conference that says even though no federal spending will go for abortion to support—to subsidize a policy which covers abortion, that insurance companies that now provide that kind of coverage to private customers must continue to offer it?  Would you be open to that language?

STUPAK:  As long as they pay for that policy 100 percent out of their pocket, I have no problem with that language.

(END VIDEO CLIP)

MATTHEWS:  Let me go to Mike on that question.  Of course, what I‘m trying to do is find where the opening is here...

VIQUEIRA:  Right.

MATTHEWS:  ... for a compromise.  A lot of pro-choice people said their concern wasn‘t that federal money couldn‘t go to pay for abortion, but that there seemed to be an expansion of the ban in what happened in the House two weeks ago.  Is there any opportunity here for a compromise that gets health care?

VIQUEIRA:  Well, I mean, the trouble is, is I believe what Congressman Stupak was talking about was on the table in the Speaker‘s suite in a private meeting the night before the big vote, that Saturday vote in the House of Representatives on November 7th.  Friday night, I was standing outside the Speaker‘s office.  Congressman Stupak, Congressman Ellsworth of Indiana, they filed in, the worked this out.  Incidentally, representatives of the U.S. Conference of Catholic Bishops were in there.  They gave it their blessing, pardon the pun.

And then they brought in Rosa DeLauro (ph), Diana DeGette, leaders of the pro-choice caucus here in the House, and it did not fly with them.  And so they went with the existing Stupak language via the amendment route on the House floor.  We all know what happened.

Chris, but really, what this is going to depend upon is what happens here in the Senate because the House is likely going to have to accept whatever they do in the Senate on abortion.  The Stupak language, very possible that it could be in there.  Members like Ben Nelson, to mention one name, who‘s pivotal in any number of policy areas with regard to this bill, is known to favor restrictive language when it comes to abortion.

There are 190 members of the pro-choice caucus in the House.  Virtually all of the other members of the House, of the 435, voted with Stupak.  The votes simply are not there for them when it gets back to the House.  And when you couple that with the fact that whatever comes out of the Senate—and Ceci just mentioned that Joe Lieberman said it‘s a matter of conscience for him not to vote in favor of a public option, then it‘s likely that something that comes out of the Senate‘s not going to have a public option.

So you might have the restrictive abortion language and you might have something without a public option.  And then you‘re going to send this into the conference and then back to the House.  It‘s going to be very problematic.  And I think Democratic leadership on the House side is thinking, Look, if they voted for the Stupak language once, they‘ll vote for it again.  Something without a public option, though, Chris—it gets sketchy after that.

MATTHEWS:  Well, you know, one—Ceci, what this concerns, this concerns liberals.  They‘re concerned that what might be the compromise that wins out includes no public option, to keep the moderates, and a ban on abortion coverage which seems too restrictive for them.  In other words, that‘s the only way you get to 218 is to go to the right, to notch it to the right.  How do you read it?  Is there any way to notch it back to the center and bring back the enthusiasm of the liberal progressives here in this compromise?

CONNOLLY:  Well, you‘re really getting at an important point, Chris, and one that there is a contingent of liberal Democrats in this Congress who feel as if, Look, we finally won back the White House.  We control the Congress.  Why can‘t we just sort of proceed on these things the way we would like?  But what not everyone paid careful attention to is that while the Democrats control the House of Representatives, it is a pro-life control in the House right now.  There are a number of pro-life Democrats who won in ‘08 and ‘06.  They expanded the Democratic caucus in the House, but they do not all march in lockstep, particularly on a couple of these real hot-button issues.

Now, going to your question about whether or not—you know, can there be a compromise forged?  Absolutely.  I mean, I spent all day in the Capitol today, and one of the points that you keep hearing from members of all stripes is, Listen, there‘s wide agreement that nobody wants to use federal tax dollars to go to abortion.  That is the area of agreement.  It comes down to language.

And I don‘t mean to discount the importance of the language.  I‘m sure there are all sorts of lawyers involved, and it can even seem to be hair splitting to us on the outside.  So the language is important, but I think that there are smart people looking at ways to tweak language that everyone will feel comfortable.  It‘s back to what President Obama has been saying all along, of, Let‘s keep status quo, no federal money for abortion.  That‘s the area that they‘re trying to hone in on.

MATTHEWS:  Well, that seems to be reasonable, if you look at it this way, if you‘re a liberal.  Thirty-one million people, according to the Congressional Budget Office analysis today, will be getting health care insurance that don‘t have it now.  That 31 million people don‘t get any abortion paid for by the government now, but if this bill passes, they‘ll get all their other health measures, all their other health procedures paid for in this program.  If they do have the situation where they choose to have an abortion procedure, they pay for that procedure themself with the help they are getting financially on all other health concerns that are covered by this bill.

It just seems to me that you wouldn‘t turn down food stamps because it doesn‘t cover clothing.  You take what you can get when you‘re in need.  And I know the principle, of course.  As much as anybody in politics, I know the principle here.  But since you‘re the woman on the set, Ceci, is that a reasonable way to look at this, that if 31 million people are going to get health insurance that never got it before and they‘re not going to get covered for abortion services, isn‘t it reasonable to assume that if they do have that contingency and they make that choice, they fund that part of their health needs themselves?

CONNOLLY:  Well, I certainly understand the logic that you‘re spelling out, Chris, and I think it is a good point that the larger goal here is to bring health insurance to many tens of millions of people that largely haven‘t had it.  And they need some basic, you know, check-ups.  They need to be able to get their immunizations...

MATTHEWS:  Right.

CONNOLLY:  ... I mean, basic medical care that it‘s a shame in this country so many people don‘t get that.  On the other hand, it‘s a little bit tricky to kind of generalize this group of 31 or 46 million uninsured because many of them go in and out of health insurance coverage.  And when they‘ve been at jobs, for instance, that they had health insurance, those plans may have offered these abortion services.

In addition, let‘s remember 17 states in this country have Medicaid programs where the states put money toward abortion services.  So it‘s a really mixed picture across our country.  As you point out, it‘s a very emotional issue.  But I think you‘re right, the larger goal here is health coverage, and that‘s what I think what everybody‘s trying to get back to.

MATTHEWS:  Well, I‘m glad we had two journalists on tonight to help get through this because there are so many emotions, as you say, Ceci.  At least we took 10 minutes tonight—thank you, Mike, as always—to help us understand this.

CONNOLLY:  Thank you.

MATTHEWS:  ... issue—Mike Viqueira and Ceci Connolly.

Up next: Huge lines for Sarah Palin today in Michigan.  Is she laying the groundwork for 2012?  You betcha!  And what does Romney and—Mitt Romney and Huckabee and Pawlenty think about all this?  Well, they don‘t have no crowds waiting for them!  More Palin-palooza next.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Sarah Palin‘s book tour is under way up in Michigan tonight.  What exactly is she out there stumping for?  Is it for political office or something else?

MSNBC‘s Norah O‘Donnell‘s covering Palin‘s stop up in Grand Rapids tonight.  And we also have Joan Walsh, who‘s editor-in-chief of Salon.com.  Thank you very much.

Norah, what are the people—can you find out what their belief is in Governor Palin?  What is it they like about her, apparently?

NORAH O‘DONNELL, NBC CORRESPONDENT:  They have a connection with her, and I think it‘s an emotional connection.  A lot of the people I spoke with today were unable to articulate exactly why they supported Sarah Palin.  One of them said it was because she upholds the Constitution, was confused and thought that Sarah Palin had opposed the bail-out, when in fact, Sarah Palin supported the bail-out.  This is a largely white—almost no minorities in this crowd.  And they‘re here because they love Sarah Palin.

I think it‘s an emotional connection, Chris because they feel, too, that they‘ve been beat up on, whether it‘s the economy or they feel like outcasts (ph).  They like the outsider, if you will, in Sarah Palin.  And that‘s why people have been willing to wait, 1,500 of them, since 7:00 AM this morning to just get a glimpse of Sarah Palin, who, by the way—this is not just a book signing, Chris.  I mean, that‘s kind of largely (INAUDIBLE) But she‘s about to arrive any minute, and there‘s a stage out front where she‘s going to take to that stage and make remarks, almost like a mini-campaign rally.

MATTHEWS:  Well, they look like a white crowd to me.  Let‘s go back to Joan Walsh.  Not that there‘s anything wrong with it, but it is pretty monochromatic up there.

Joan, no surprise in terms of the ethnic nature of the people showing up.  Nothing wrong with that.  But it is a fact.  Let me go to this intramural—the nastiness—and I want to get back to Norah on this, Norah covered the campaign and—the nastiness of this, the attacks on you might call them the “little people,” Steve Schmidt, Nicolle Wallace, in the campaign.  Here‘s somebody who was governor of a state taking whacks in a published book, her only book, trashing little people, and at the same time, she‘s looking out for little...

Here‘s her quote.  By the way, here is McCain defending his people.  “There‘s been a lot of dust flying around in the last few days, and I just wanted to mention that I have the highest regard for Steve Schmidt and Nicolle Wallace and the rest of the team, and I appreciate all the hard work and everything they did to help the campaign.”

So he‘s pushing back, Joan.

JOAN WALSH, SALON.COM:  Yes.  You know, he was trying to stay out of it, Chris, for a few days.  He was saying nice things about her.  But when she insults his team like that—and you know, I—there are questions about who‘s right, but they strenuously deny it, and other reporters who were around also deny her version of things. So, I think that there are a couple of whopping lies, as well as just a mean-spiritedness that doesn‘t serve her well. 

It‘s why she will never be president.  She is a very divisive, mean-spirited person.  She is fighting down with her 19-year-old ex-future-son-in-law, who should really be ignored, if anything.

So, you know, I think you see a side of Sarah Palin—Norah is right.  People who love her love her.  But the general public doesn‘t trust her and sees this kind of mean girl persona that she‘s never grown out of. 

Norah did great reporting, by the way.  I was watching when she interviewed these people who were wrong about TARP and who just started babbling about she will defend the Constitution, as though Obama won‘t. 

MATTHEWS:  Right. 

WALSH:  So, I think you‘ve got that same kind of paranoid tea party, maybe even birther crowd that talks about the Constitution, without really understanding what they are talking about.  They love her.

MATTHEWS:  I‘m just wondering, Norah, along those lines—and you‘re up there with the people—you can talk to them, the—that I think people like the sort of fisticuffs, that she is taking on these political types. 

What do you think?  What can you tell from talking to people? 

O‘DONNELL:  You so right.  Yes.  You are so right.  And she is the anti-politician, the outsider.  She is not like those people—as one man told me who has a Sarah Palin for president T-shirt on, that she was more qualified than the three other men who ran last year, talking about Barack Obama...

WALSH:  I saw that.

O‘DONNELL:  ... Joe Biden, and John McCain.  She—he said she was more qualified than they were, because she has actually been a governor and run something, in his words. 

WALSH:  And quit, of course. 

O‘DONNELL:  I think they are mad at the “Newsweek” cover.  They think it‘s sexist.  They think that the media has beaten up on her.  So, they sympathize and they connect with her, if you will, on that level. 

But this tour, I think, though, Chris, also should scare the pants off some of those other Republicans who want to run for president in 2012.  Why?  Because there is this emotional connection.  There are thousands of people that will turn out for her. 

I‘m not saying that she could get elected president, but I‘m saying she can be a force in the primaries.  And she can raise money for her political action committee.  And she can be a force in some way.  Now, whether that is a positive force or a negative force, other people can decide that. 

MATTHEWS:  Well...

O‘DONNELL:  But, no doubt, she can be a force. 

She says that she wants—if people will have her, she wants a role in 2012.  I think she is going to have this tour, and she‘s going to get the bug, because there‘s a lot of adoring fans out here. 

(CROSSTALK)

MATTHEWS:  OK.  That is my hunch, too. 

(CROSSTALK)

MATTHEWS:  Let‘s take—let‘s take a look.  Joan, I want you to look at what she did...

WALSH:  Sure.

MATTHEWS:  ... on “Sean Hannity” last night. 

I think there is a tribal aspect to this thing, in other words, white vs. other people.  I think she is very smart about this.  Here she is on the issue of—of what happened down at Fort Hood, obviously, an ethnic issue, as many people see it.

WALSH:  Right. 

MATTHEWS:  She sees it that way.  Here she is going at him.

(BEGIN VIDEO CLIP, “HANNITY”)

SEAN HANNITY, HOST, “HANNITY”:  Do you think Fort Hood was an act of terrorism? 

SARAH PALIN ®, FORMER ALASKA GOVERNOR:  I certainly do. 

And I think that there were massive warning flags that were missed all over the place.  And it was quite unfortunate that, to me, it was a fear of being politically incorrect, to not—I‘m going to use the word—profile this guy, profiling in the sense of finding out what his radical beliefs were. 

Now, because I used the word profile, I‘m going to get clobbered tomorrow morning.  The liberals, their heads are just going to be spinning.  They are going to say, she is radical.  She is extreme. 

But I say profiling in the context of doing whatever we can to save innocent American lives, I‘m all for it then. 

(END VIDEO CLIP)

MATTHEWS:  No.  Profiling has a particular meaning. 

Joan, you go at it.  Everybody knows what profiling is. 

WALSH:  Right. 

MATTHEWS:  It‘s driving while black. 

WALSH:  Black.

MATTHEWS:  We know what it means.  If you come from a Middle Eastern country, keep your eye on this guy.  Check him out. 

(CROSSTALK)

MATTHEWS:  That‘s profiling.

O‘DONNELL:  Listen, the same day she is complaining about the “Newsweek” cover, which, actually, I also did find sexist, but she is making herself a victim around the “Newsweek” cover while endorsing profiling?

I mean, she plays the victim card.  And this obviously resonates, as Norah was saying, with part of the base.  But, at the same time, you know, this is a small base.  What you are going to see in 2012, I predict, Chris, is an even narrow—a narrowing of the base and a hardening.

And I don‘t think Barack Obama has to fear her, unless he completely screws everything up.  But, definitely, Mitt Romney and that totally uncharismatic crew, they have to be shaking in their boots. 

(LAUGHTER)

WALSH:  There‘s nobody who can match her star power.

MATTHEWS:  You know, I think we are on the same page here, I think, Norah, from different perspectives, like we always are, even straight news here, in your case. 

Let me suggest that—that she is a mirage at worst in the Republican desert.  These other candidates are so boring, that she sparkles, by—well, even by—without by comparison, she sparkles. 

O‘DONNELL:  Well, and she represents—it may be more appropriate to say she represents conservatives than Republicans, and that is why she can be powerful in a Republican primary, because those are the people that like her. 

I think one other really interesting seed, too, as we have talked about her shooting down some of those people who were on the campaign, and then firing back at her, which has really been remarkable, is that, also, one of the contexts of this book—and I spoke with someone from the Christian Broadcasting Network, David Brody, who is a great reporter for them.

He is interviewing Sarah Palin.  It‘s going to be on “The 700 Club” on Thursday.  He pointed out to me again that, in this book, she talks a lot about God.  There is a lot of evangelizing in this book, inviting people to open their heart and bring God into their heart. 

And I think that is a part of this as well.  That‘s a part of this book that we have not yet discussed that is going to become more and more apparent, as we get over sort of this dust flying with the back and forth, as they are—they‘re fighting at each other, these campaign aides, and deal more about some of how she is trying to reach more people, if you will.

MATTHEWS:  Yes. 

I think we can argue whether it is a good book or a bad book, but we can agree it is a campaign book. 

WALSH:  Absolutely.

MATTHEWS:  Norah O‘Donnell, thank you very much. 

O‘DONNELL:  And it is a book that is going to sell. 

MATTHEWS:  Thank you, Joan Walsh.

O‘DONNELL:  And it‘s a book—it‘s a book that is going to sell.

WALSH:  Yes.  Yes. 

MATTHEWS:  OK.  Well, you‘re proving that up there in that crowd.

Up next—I think it is Christmastime already up there.

Up next: Joe Biden on the pearls of being in a big tent. 

Plus, are people crazy?  Does America really need Dick—well, this one—wait until you catch this act, that there are ditto heads on this planet.  The “Sideshow” is up next. 

You‘re watching it, HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  And time for the “Sideshow.” 

First up: parsing the party. 

Joe Biden stopped by “The Daily Show” last night, marking the first time that a vice president has ever gone on the show.  Here‘s Biden explaining the difference between the two political parties, trying to explain why the Republicans seem to call the shots when they have the majority, but the Democrats have a tough time even agreeing. 

(BEGIN VIDEO CLIP, “THE DAILY SHOW WITH JON STEWART”)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES:  The Republican Party has nothing but hard-core conservatives.  There‘s no moderates left.  The Democratic Party has moderates, liberals and conservative Democrats. 

There‘s a number of those Democrats...

JON STEWART, HOST, “THE DAILY SHOW WITH JON STEWART”:  And communists. 

(LAUGHTER)

BIDEN:  No, socialists. 

(CROSSTALK)

STEWART:  I‘m sorry.  Socialists.

(LAUGHTER)

BIDEN:  One...

STEWART:  That‘s what I meant. 

(CROSSTALK)

STEWART:  I knew it was something like that. 

BIDEN:  The good news about a big tent is a lot of people get under it.  The bad news is, it‘s hard to—the bigger the family, the harder—the harder to get agreement. 

STEWART:  It always strikes me that, when the Republicans are in the majority, it‘s let‘s have a straight up-and-down vote, and they get it done. 

And, then, when the Democrats are in the majority, they‘re like:  I‘m drowning. 

(LAUGHTER)

STEWART:  Like it is—it‘s completely baffling to my eyes as I watch it. 

BIDEN:  Well, you make a good point. 

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  That is a great duo there. 

Anyway, is that another way of saying that Republicans are ditto heads? 

Next: the rumor that won‘t die.  Last night, Dick Cheney endorsed Senator Kay Bailey Hutchison of Texas, one of the few normal things the guy has done lately, for governor of Texas.  At the rally, Senator Hutchison brought up the idea that Cheney would consider a run for president. 

(BEGIN VIDEO CLIP)

SEN. KAY BAILEY HUTCHISON ®, TEXAS:  I wasn‘t sure, however, if after I saw Liz Cheney on TV on Sunday, if this was maybe the announcement of Cheney 2012? 

(CHEERING AND APPLAUSE)  

UNIDENTIFIED FEMALE:  We need you, Dick.

(LAUGHTER)

RICHARD B. CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES:  No chance. 

(END VIDEO CLIP)

MATTHEWS: “We need you, Dick.”  Did you hear that?  Well, that is a desperate cry for help.  Got some strange desires down there in Texas.

For the “Big Number” tonight, we have got a big milestone here in Washington, D.C.  Today, Senator Robert Byrd of West Virginia became the longest-serving member of Congress in history, surpassing the record set back in 1969 by Carl Hayden of Arizona.  Byrd was elected to the House of Representatives back in 1953.  He has served in the Senate since 1959. 

And, all in all, how much time has Byrd clocked in both the House and the Senate?  Fifty-six years—we can all do that math—and 320 days, the all-time record.  The senator put out a statement saying—well, this, I don‘t believe—he is looking forward to serving for another 56 years and 320 days.  Now, that would be interesting.  He will be 92, by the way, this Friday. 

Happy birthday this Friday, Senator. 

That‘s the “Sideshow.”

Coming up:  Are Republicans playing politics over President Obama‘s decision to try those 9/11 terrorists up in New York?  Do Democrats risk not looking tough enough on terror?  Well, that is a hot question, the politics of terrorism on trial—coming up next here.

You are watching HARDBALL. 

And everybody is exploiting the hell out of this one, including Rudy Giuliani. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

JULIA BOORSTIN, CNBC CORRESPONDENT:  I‘m Julia Boorstin with your CNBC “Market Wrap.”

Stocks skidding today on a sharp drop in new housing starts and weak outlooks from two tech firms, the Dow Jones industrial falling 11 points, the S&P 500 down a half-a-point, and the Nasdaq losing over 10 points. 

Investors turning cautious after a report showed new home construction fell more than 10 percent last month.  Analysts see this as bad news for the Labor Department, putting construction crews and their suppliers at risk. 

Techs taking a hit after engineering software-maker Autodesk delivered a weaker-than-expected outlook. 

And customer service software-maker Salesforce.com reported a slowdown in new business. 

In earnings news, B.J.‘s Wholesale Club reporting a 37 percent drop in third-quarter profits—shares falling almost 2 percent.

And shares in Victoria‘s Secret parent company Limited Brands moving higher after-hours on better-than-expected earnings boosted by a one-time tax gain. 

That is it for CNBC, first in business worldwide—now back to

HARDBALL. 

(BEGIN VIDEO CLIP)

ERIC HOLDER, U.S. ATTORNEY GENERAL:  When the 9/11 conspirators are brought to trial, I have every confidence that the presiding judge will ensure appropriate decorum.  And if Khalid Sheikh Mohammed makes the same statements he made in his military commission proceedings, I have every confidence that the nation and the world will see him for the coward that he is. 

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

That was attorney General Eric Holder on Capitol Hill today.  Well, did he make the right call by sending that trial up to New York?  Are critics like Rudy Giuliani right that they said it was a wrong decision for New York and for the country? 

With us now, two members of the Congress, of the House of Representatives, California Republican Dan Lungren, who was attorney general out in California—he sits on the Homeland Security Committee—and New York Democrat Jerry Nadler, who sits right there on the Judiciary Committee. 

I want to ask you both, gentlemen, about American values, before we get to the issue of security, which is always tricky.  I have always been proud as an American that when we started this country, even the members—the British soldiers involved in the Boston Massacre were given a fair trial.  And they even had a first-rate lawyer, John Adams, defending them. 

I love the fact that this is a country of law.  And I hope we can maintain that principle. 

Mr. Lungren, do you agree or not? 

REP. DAN LUNGREN ®, CALIFORNIA:  I agree.  But that doesn‘t answer the question as whether they should be tried in a civil trial or whether they should be tried in a military tribunal. 

I don‘t think you are suggesting that President Eisenhower didn‘t bring—believe in American values, nor Franklin Delano Roosevelt didn‘t believe in American values, when they had people who were tried by military tribunals who got justice, but did not make a mockery of our courts by—by somehow pretending that they had a right to the full protection of the Constitution of the United States in civil courts. 

It is an abysmal decision that moves us in the wrong direction.  And any suggestion that you can‘t have justice in military tribunals is belied by the decision by this administration to try other terrorists in those military tribunals. 

MATTHEWS:  Mr. Nadler, your view? 

REP. JERROLD NADLER (D), NEW YORK:  Well, I think that this country has been distinguished by a commitment to the rule of law.  And it is our glory that we give people fair trials before we send them to prison or execute them. 

And the whole experience of Guantanamo has been a stain on our record.  It has been a terrible propaganda for us all over the country—all over the world, rather.  And the fact that we are going to give these alleged terrorists a fair trial in a federal court is exactly the right thing to do. 

Traditionally, we have used military courts, our military tribunals for people captured on the battlefields, when you couldn‘t get to a regular court.  And it is exactly the right to do to try them in an appropriate court, and to try them—as traditionally we always have, to try them in the same jurisdiction where the crime occurred. 

MATTHEWS:  Let‘s bring the president.

LUNGREN:  We haven‘t traditionally tried people in this way.

MATTHEWS:  Let‘s bring the president in here.  I want to—I‘m sorry, Mr. Lungren. 

I want to bring the president in right now.  He is here talking to NBC‘s Chuck Todd on this point. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Khalid Sheikh Mohammed has been sitting there for years now without us finally convicting him and meting out justice.  And part of the goal, I think, of the attorney general is to make sure that justice is no longer delayed and that is something that the American people should be happy about. 

(END VIDEO CLIP)

MATTHEWS:  Mr. Lungren, this man has been water-boarded 183 times but he‘s never brought to trial even in a military tribunal for six years.  Shouldn‘t the Bush administration have done what a lot of people like yourself think that Barack Obama should do now which is give him a military tribunal?  Why didn‘t they do it over the last six years? 

REP. DAN LUNGREN ®, CALIFORNIA:  I can‘t tell you why they didn‘t do it.  That doesn‘t make the decision now correct to bring him to a civil court.  They will get protections under this decision that they would not get if they were in a military tribunal situation.

So what is suggested here and by Jerry Nadler‘s comments is that someone who fights the United States on the battlefield gets—and doesn‘t attack innocent civilians but rather fights against American forces in uniform gets less rights than someone who commits the ultimate—the ultimate crime going after innocent civilians, men, women and children who were not on the battlefield.  That makes no sense whatsoever.

The people who commit the worst crimes get the greatest protection?  You don‘t get the full panoply of constitutional protections if you are not in the United States and you‘re in a situation like the military tribunal.  Yes, you get justice.  But the reason you make a distinction is there are very different circumstances.

How about giving our information that they gained as a result of the civil trial or civilian trial that took place after the attacks in 1993?  The presiding judge in that case Mr. Mukasey, said this is crazy. 

MATTHEWS:  Ok.  Mr. Nadler.

Mr. Nadler. 

REP. JERRY NADLER (D) NEW YORK:  First of all, I can tell you why the Bush administration didn‘t put these people on trial in a military tribunal because they couldn‘t.  Because they invented this new military tribunal which they tried to give less rights to defendants in front of and the Supreme Court on several occasions said you can‘t do that.

They set up Guantanamo outside the United States because they thought that people housed in Guantanamo would have no constitutional rights.  And the Supreme Court in 2006 said wrong.  They have the same constitution rights because it is controlled by the United States as if they were on American soil.

LUNGREN:  They don‘t have the same constitutional rights.

NADLER:  I think they do.  The Supreme Court said so in 2006.

LUNGREN:  That‘s not true.

NADLER:  It is true.

LUNGREN:  No, they didn‘t say they had all the same rights.

NADLER:  I didn‘t interrupt you, Dan.

And the fact of the matter is in eight years the administration—the former administration trying to use military tribunals succeeded in getting guilty pleas from three people in the same time period 195 terrorists were convicted in regular courts.

And the thing that Congressman Lungren said about giving information, that is simply not true.  The information that was allegedly given about co-conspirators was given because that wasn‘t classified information.  We have something called the classified intelligence protection act or procedures act, CIPA back in 1978 which protects classified information and protects information from being used or from being given to terrorists or defendants if it, in fact, is sensitive information.  And that prosecutors can use and where appropriate presumably will use. 

MATTHEWS:  I think a lot of people—gentlemen—

LUNGREN:  Outside of that trial that information would not have given out.  That is what Judge Mukasey said who is later attorney general of the United States. 

NADLER:  Yes.  And Judge Mukasey has not said that in several recent articles he‘s written because I think he realized that he was mistaken the first time he said it.

LUNGREN:  He just said it last week. 

NADLER:  Well, then he is still mistaken.  The fact is that that information—I just checked with the Justice Department today—was not classified at the time and the prosecutors elected—the prosecutors at the time elected to give that to the defendants and didn‘t have to.  They could have protected had they wanted to.

MATTHEWS:  Congressman Nadler, are you concerned there is going to be violence because there have been suggestions by members of Congress or at least one member of Congress, Mr. Shadegg, there might be hostage taking, there are all kinds of possibilities in a trial situation?

NADLER:  No.  I‘m not concerned terribly about that.  The fact is I am concerned always at the potential of a terrorist attack against New York City.  New York City, my hometown, is at the top of the terrorist target list and if they can hit us they will.  But the fact that we are holding a trial there does not make it any more or less likely that they will get through our defenses and be able to stage a terrorist attack in New York.

Now, we have tried, as I said, or convicted 195 terrorists since 2001 in courts and we haven‘t had a problem with that.  We know how to keep people in secure facilities and we know how to protect our courts.

MATTHEWS:  Ok.  Thank you very much.  Congressman Jerry Nadler and Congressman Dan Lungren of California. 

Up next, new revelations that John Edwards was trying to cut a deal; he was going to help Obama become president to beat Hillary or Hillary to beat Obama.  Whoever was going to make him their running mate, he was willing to cut a deal with.  This does not look good for the late great John Edwards.  What a disaster he has become for the Democrats.

We‘ll be right back with “The Fix”.  This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, is President Obama risking an awful lot trying those 9/11 suspects up in New York, especially the mastermind?

HARDBALL returns after this.

(COMMERCIAL BREAK)

MATTHEWS:  Time now for “The Politics Fix.”  we have a great one tonight.

“Washington Post” columnist Eugene Robinson and MSNBC analyst and Steve Kornacki writes for the New York Observer. 

Gentlemen, I‘ve got something really delicious here.  In a new book David Plouffe writes that an Edwards campaign aide made this offer, quote, “Unless this race is shaken up Hillary is going to win.  What would shake the race up is John ending his campaign but not simply endorsing another candidate.  All things being equal, John prefers Barack.  They would announce they‘re joining forces and will run as a ticket.”

A little later, the campaign chief for Barack Obama writes, “Right at the end of the conversation the Edwards rep added a new wrinkle.  Just to be clear we‘re going to talk to the Clinton people, too.  That is not where John‘s heart is but he is at a point of minimum leverage here.”

Gene, here you have a guy sending his minion out to shop around his ability to offer himself up—his willingness, his availability—to run as somebody‘s running mate if it will screw the other candidate? 

EUGENE ROBINSON, COLUMNIST, “WASHINGTON POST”:  Well, yes.  Screw the other candidate and advance him.

MATTHEWS:  This is John Edwards.

ROBINSON:  He said all along, “I‘m interested in being vice president.  I‘ve done that—been there, done that.”  It is striking, too, given what we know about John Edwards now.  Given what we know was going on in his life at the time, that not only was he running for president but would be willing to be on the ticket and perhaps...

(CROSSTALK)

MATHEWS:  Well, he‘s covering up the affair at the time.

You know I think Steve this is one of the great ones.  Let‘s stick above the goo level and stay away from the sex and all to the simple question, is this the ultimate in cynicism saying this is all big-city politics?  Like I don‘t care who wins as long as I get a piece of the action here?

STEVE KORNACKI, NEW YORK OBSERVER:  Yes.  And you know, we can look at it from the big picture and say well obviously, the Obama people were right to stay away from this because the scandal would have embarrassed them.  But from the raw politics of it, I think this would have been a big mistake for them.

I don‘t see what the upside would have been of going along with something like this because politicians always overstate their own ability to deliver their supporters to other candidates and the usually plays along with that too.  Voters always—yes, they may like one candidate but that doesn‘t mean they‘re going to share that candidate‘s second choice.

But I think there was also a considerable down side.  And we have to remember there basically was an informal alliance for a week or so—for five days, actually—between the Obama campaign and the Edwards campaign and that was right after Iowa when Obama came in first, Edwards came in second, Hillary came in third.

And for those five days the Edwards people actually thought they could flush Hillary out of the race in New Hampshire and get a one-on-one with Obama then go win it in Nevada and South Carolina.  And if you remember, the debate on the Saturday night before the New Hampshire primary when at the time Hillary was crashing in the polls, Obama was moving 10, 15 points ahead.  Every time there was a dispute in that debate between Hillary Clinton and Barack Obama, John Edwards jumped in, sort of piled on against Hillary Clinton.  It looked terrible.

MATTHEWS:  That helped Hillary.

KORNACKI:  That‘s one of the reasons why Hillary came back.  So if they cut a deal like this...

(CROSSTALK)

MATTHEWS:  ... it seems to me that John—that Hillary won because of

first of all, people love to keep that race going.

ROBINSON:  Yes, right.

MATTHEWS:  And nobody wanted to give Barack Obama...

ROBINSON:  But there was a sense that she was being ganged up on...

MATTHEWS:  Yes.

ROBINSON:  ... and that she was being treated unfairly and that she had been treated unfairly in that debate.  So...

(CROSSTALK)

MATTHEWS:  Well, it just shows John Edwards is not leaving this world politically, the best looking candidate as he came in.

And we‘ll be right back to talk about something really hot.  Not John Edwards and whether he was willing to be on either side to win but the far bigger question of an issue that I haven‘t taken sides on.

I think it‘s really tough, having trials for these terror suspects.  Congressman Nadler called them alleged terrorists.  I mean, I‘m not sure the way people look at this is alleged.  And they go up to New York and act like this is an open, honest trial and then hope that they get hanged afterwards, I just wonder about this.

We‘ll be back with Gene and Steve to talk about this big New York trial scene that‘s coming.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Back with Gene Robinson and Steve Kornacki.

Let me ask you about this fight.  You‘re up in New York there.  How is this selling the fact that you‘re going to be the venue for this big trial up there with Khalid Sheikh Mohammed and four other allege terrorists?  This is so big.

KORNACKI:  You know, it‘s interesting here; blue state New York and Obama won the state by 25 points.  And the first poll that I saw, I‘ve seen one so far of New Yorkers and basically an even split on this so whether it‘s a good idea or whether it‘s a bad idea.

So obviously in the short term when you look at like a guy like Rudy Giuliani, the former mayor up here, coming out there with so much heat, so much intensity, so much really fear mongering on this, this is—this is very smart politics in the short term for the Republicans.  You know, to be pointing out the 46,000 things that could go wrong and the 46,000 reasons why this is a bad idea.

But I think they‘re playing with fire here because we have had terrorism trials in New York City before.  You know, we‘ve convicted terrorists before.  The rate is over 90 percent.  And the administration is basically cherry picking cases here.  They‘re only going with the cases they‘re pretty sure they can win.

MATTHEWS:  So you think the Republicans are risking looking like cheap shot artists because it‘s going to go off as planned?  These guys will get convictions, they‘ll be ultimately executed probably and it‘ll look like a good example of American law at work you‘re saying?

KORNACKI:  Think about the quote we have and everybody‘s heard it in the last few days from Rudy Giuliani from just three years ago after Musawi‘s (ph) conviction.  That‘s what the White House, that‘s what the White House‘s supporters are going to be in position to hold up.

You know, a year and a year and a half from now, whenever it is and they‘re going to say Republicans were that scared of our own system.  And the Republican bet here at a certain point, maybe it‘s and it‘s probably not conscious, I certainly hope not.  But it really boils down to something has to go wrong in this trial for the Republicans to win long term.

MATTHEWS:  Gene, is that right?

ROBINSON:  Well, it‘s interesting that the New Yorkers are so split on this.  Because there‘s a part of every New Yorker I think that says, bring them on.  Bring them on.  We‘re New York, we can handle it, we can handle this.

MATTHEWS:  And also, the justice in the town where they did it.

ROBINSON:  Exactly.  Just to bring them back to the scene of the crime and give them a fair trial and then hang them.  You know?

MATTHEWS:  Yes.

ROBINSON:  But, you know, September 11th was such a trauma for that city that obviously there are a lot of people are going to be nervous.

My question is, can he get a jury in New York?  If it‘s going to be, you know, of regular criminal trial under our system, I think if I were a defense lawyer for KSM, the first thing I would do is to ask for a change of venue and say, my client can‘t get a fair trial three blocks away from Ground Zero.

MATTHEWS:  I look at the other possibilities not being a lawyer, if an Islamic person, a Muslim, is on the jury pool and they are just challenged immediately, right, Steve?  If you‘re a defense attorney, you say, wait a minute, you just knocked that guy off or that woman off because she‘s a Muslim.  This is not a fair trial by their peers.

KORNACKI:  Yes, I guess that‘s the Sarah Palin strategy, right? 

Profile, profile, profile.

MATTHEWS:  Yes.

KORNACKI:  But New York City has hosted these before.  The blind Sheikh was convicted what 15 years ago.  I think that‘s another one that Rudy Giuliani looked at, at the time and said this is a great triumph for our system.  Some way or another it‘s possible to get through these, it‘s possible to get convictions.  As I said the rate is 90 percent conviction rate for federal terrorist trials.

And you look at this the Obama administration is not taking every accused terrorist and giving them a federal trial.  They‘re cherry picking.  They‘re taking the cases they think are...

(CROSSTALK)

MATTHEWS:  Ok, they‘re also betting on a grand slam here, right, Steve?  They‘re betting on a grand slam with all five of these guys.

KORNACKI:  But they‘re not bringing everybody up.

MATTHEWS:  Right.

ROBINSON:  We should point out that Eric Holder said he believes he has a better chance of getting a conviction in the civil trial than in the military court or something.

MATTHEWS:  Wow, we‘ve got to talk about that later.

Thank you, Gene Robinson.  That runs against intuition.  Anyway, Steve with “New York Observer.”

Join us again tomorrow 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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