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updated 1/7/2010 11:18:52 AM ET 2010-01-07T16:18:52

Guests: Chuck Todd, Matt Nesto, Eugene Robinson, David Ignatius, Steve McMahon, Todd Harris, David Corn, Ron Christie

CHRIS MATTHEWS, HOST:  Dodd, Dorgan and Ritter—three men out.

Let‘s play HARDBALL.

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

No country for old men.  Politics has become one tough business these days, especially for those who have to defend the way things are in this country.  In just the past 24 hours, three top Democrats have decided to quit the business and not run for reelection, Senator Chris Dodd in Connecticut, Senator Byron Dorgan out in North Dakota and Governor Bill Ritter in Colorado.

And while Democrats can argue that Dodd‘s quitting improves their chances in Connecticut, no amount of spin can wash away the obvious conclusion.  These Democrats have looked at the electoral landscape and would prefer to retire than lose.  The implications are huge.  We‘ll get to them at the top of the show.

Plus, Republicans are shocked, shocked that President Obama has opted for a criminal trial in federal court for the Christmas Day bomber, even though that‘s exactly what the Bush administration did with the so-called shoe bomber, Richard Reid.  Where does the hypocrisy end?  We‘ll debate that one.

Also, what‘s going on with U.S. intelligence?  Twice in the last few weeks, intelligence lapses have led either to the disaster, the killing of seven CIA employees in Afghanistan, or near disaster, that Christmas plane bomber.  How could this happen?  We‘ll try to get some answers.

And back to politics.  The biggest story surrounding those Democratic retirements may be their effect on President Obama.  They create a perception, at least, of the Obama party being weak at a time party loyalty is a key to getting through the health care bill.

Remember this?  Elvis wasn‘t named a federal drug agent, as he had hoped, but this iconic photo has now attained a singular distinction.  Dick Nixon and Elvis—a keeper.  Check out the HARDBALL “Sideshow.”

We begin, however, with the three big Democrats who won‘t run for reelection, Dodd, Dorgan and Ritter.  Our strategists are here, Democrat Steve McMahon and Republican Todd Harris.

Todd, you‘re giggling like the Easter bunny.  What are you so happy about?  Do you think this is good—by the way, your teeth are so white, I‘m appalled.  What‘s going on?

(LAUGHTER)

MATTHEWS:  What is going on?

TODD HARRIS, REPUBLICAN STRATEGIST:  It must be the Florida sunshine on the teeth.

MATTHEWS:  OK.

HARRIS:  I‘ll tell you what‘s going on.  You know, here in Florida, where I am now, the quintessential swing state, Barack Obama has a 48 percent approval rating, 46 percent disapproval rating.  Nationally, he started his presidency with a 3-to-1 approval.  He‘s now almost even.  That is the fastest drop in terms of presidential approval of any president in recent memory.

You couple that with the 20 percent approval rating that Congress has, and that makes for a very, very difficult political environment for incumbents to run for reelection.  The public is—they‘re mad as hell and they don‘t want to take it anymore, and largely surrounding the issue of spending, whether it‘s a trillion-dollar deficit, trillion-dollar health care plan, bank bail-outs, auto bail-outs.  This is not a political environment that Democratic incumbents, especially in swing states and swing districts...

MATTHEWS:  Well, that shatters everything...

HARRIS:  ... want to put their name on the ballot.

MATTHEWS:  ... I believe about politics.  See, that completely shatters everything I now about politics.  The public—before you get in this, Steve—care about their own condition, the way things are, the symptoms of their lives, how hard it is to get a loan, how hard it is for them or their kids to get a job or to hold onto a job.  That‘s how people think.  They don‘t think about these big numbers up there on the board until things are bad for them.  And when they are bad for them, then they start pointing at these things.

Anyway, here‘s the president‘s press secretary reacting to the news you just destroyed (ph) by going after in a partisan way, which is fair enough—it‘s why you‘re here.  Here‘s Gibbs going the other way.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  It is hard to look into the crystal ball 11 months from election day.  There‘s retirements on both sides of the aisle in the Senate.  It‘ll be the same in the House.  We‘ll let the political season play out over the course of the next 11 months.  I don‘t want to make a lot of predictions for 11 months from now.

(END VIDEO CLIP)

MATTHEWS:  Well, Steve McMahon, before you get going, I‘ll interrupt you again.

(LAUGHTER)

MATTHEWS:  Let‘s take a look at those numbers he alluded to there.  In the House of Representatives, 15 Republicans are quitting this year, 12 Democrats.  You can see those numbers in red on the House side.  Then on the Senate side—you can see them in black now—six Republicans we knew were quitting, but now we know Dodd and Dorgan.

Why are Dodd and Dorgan quitting?  And how can you take that as anything more than a loss for the Democrats?  These guys were big shots.

STEVE MCCMAHON, DEMOCRATIC STRATEGIST:  It‘s a loss for the Democrats because these guys are big shots.  And what you said is basically right.  Voters make judgments based on what‘s happening in their lives, and right now, you can see Wall Street recovering, you can see economic indicators suggesting the economy is picking up again.  But in Main Street America, people feel like their lives aren‘t on the right track.  They don‘t feel optimistic about their future.  Their 401(k)s are still worth 30 or 40 percent less than they were, and they don‘t know what their kid‘s future‘s like.  The incumbents, they believe, are not getting it done.  So in that sense, Todd‘s right.  This isn‘t a Democratic problem, this is an incumbent problem and...

MATTHEWS:  Well, let‘s take a look at Dodd, though, because he is—he is the biggest of the big shots quitting today.  Here he is, Chris Dodd.  Surprised me when I read the paper this morning, the lead story in “The Post.”  Here‘s Chris Dodd explaining his departure from the big time.

(BEGIN VIDEO CLIP)

SEN. CHRIS DODD (D), CONNECTICUT:  Over the past 12 months, I‘ve managed four major pieces of legislation through the United States Congress, served as chair and acting chair of two major Senate committees, placing me at the center of the two most important issues of our time, health care and reform of financial services.  I lost a beloved sister in July, and in August, Ted Kennedy.  I battled cancer over the summer, and in the midst of all of this, found myself in the toughest political shape of my career.

(END VIDEO CLIP)

MATTHEWS:  You know, Todd Harris, it‘s a weird, strange world out there when a guy like Chris Dodd has to leave politics because of poll numbers, and someone on your side of the aisle named David Vitter, who got caught with prostitutes, with, well, professional—what do they call them? -- sex workers both in Washington and in his home state of Louisiana, and he‘s headed towards reelection.

Explain the thinking of the voters.  Could it be they vote on symptoms and they‘re more angry about what‘s affecting them personally than they are about what politicians are up to, even in their hanky-panky world?

HARRIS:  Well, you know, I‘m not from Louisiana, but...

MATTHEWS:  Explain Vitter‘s survival.  Explain it.  It‘s really astounding.

MCMAHON:  Not survived yet.  He hasn‘t survived.

MATTHEWS:  Well, he‘s headed towards it.  What‘s going on?

HARRIS:  Look, he obviously has a better connection, despite anything that has happened in his past, to the people of Louisiana than Chris Dodd, after four or five terms, has with the people of Connecticut.  I mean, there is no other way to explain it.

(CROSSTALK)

MATTHEWS:  ... the connection with the people is, in his case, a professional sex worker!

(CROSSTALK)

MATTHEWS:  Is that how you connect with people these days?  Somebody love me, please!

(LAUGHTER)

MCMAHON:  The most reliable predictor—the most reliable predictor of outcomes in elections is voting performance in the state.  You can look at North Dakota and you can see a state that‘s a very, very red state...

MATTHEWS:  Yes.

MCMAHON:  ... and you can understand Byron Dorgan.  Connecticut is a very blue state.  And I think Senator Dodd—you have to take him at his word.  He‘s done everything he can for the people of Connecticut for 30 years.  He just lost his best friend in the Senate.

MATTHEWS:  Yes.

MCMAHON:  He lost his sister.  He‘s gone through cancer treatment himself.  And he‘s looking at this environment, and he knows it‘s going to be a tough campaign.  He knows it‘s an uphill campaign.  And he‘s wondering, Don‘t I have better things to do with my life?

And that‘s the real tragedy here, is that people like Chris Dodd are choosing to walk away because they don‘t think that serving or fighting a tough campaign is more important or more worthy...

MATTHEWS:  Yes.

MCMAHON:  ... than going off and living a nice retirement.  We are losing great people because this environment—because, frankly, Todd, the Bush administration left such a mess.

(CROSSTALK)

MATTHEWS:  Let me ask you this.  Suppose you‘re a Republican.  Suppose you‘re a Democrat.  You can do the Republican part, Todd.  You got to go out there and tell people as you go and visit them at home in your Senate seat or your House district, and you got to say, Look, you‘ve been paying me $180,000 a year for about 20 years now and I‘ve been serving you, and here‘s the results.  Ten percent unemployment, a stock market which is wobbly—we never know which way it‘s going to go—a national debt which has tripled.  What else?  Everything seems scary and zany.  We have a trade deficit which is horrendous.  Nothing seems to be working at the federal government level.  Katrina was a disaster.  We can‘t seem to stop the terrorists from at least getting on our planes.

What do you brag about when you go home if you‘re a politician now and say, Look what I did for you?  What do you brag about if you are a Republican?  What has the Republican Party done for anybody in the last 10 or 15 years?  What have they done, the Republican Party, for the people?

HARRIS:  Well, Chris, as you well know, voters don‘t decide elections...

MATTHEWS:  No, I‘m asking you a question.  What has the Republican Party done for the people in the last 10 or 20 years?  What have they done?

HARRIS:  Well, and I‘m—and I‘m answering your question about how you would win an election in 2010, and it‘s not about talking...

MATTHEWS:  No...

(CROSSTALK)

MATTHEWS:  ... question.  What do you tell people you‘ve done for them if you‘re a Republican?  You had a president who signed every single spending bill when the Republican Party was in power.  You had Katrina, which was a disaster, Iraq, which most people think was dishonest and we shouldn‘t be there, an Afghan war that won‘t end.  Well, we haven‘t been hit since 9/11, but of course, 9/11 does count.  What would you brag about if you were a politician right now?

HARRIS:  Well, first of all, the Bush administration kept the country safe.  But I want to say...

MATTHEWS:  Well, except for one big day.

(CROSSTALK)

HARRIS:  Hold on—hold on a minute.  Hold on a minute.  Part of the problem that Democrats have is that they are so obsessed with continuing to attack the Bush administration—you guys are so obsessed with trying to get your pound of flesh that you‘re ignoring the real concerns that voters have in 2010.  I hope to God that people on the left continue to try to go after President Bush and his record for the next 11 months because Republicans are going to be talking about being a real check and balance on the runaway spending that‘s going on in Washington right now.  Democrats can...

MATTHEWS:  When did that start?

HARRIS:  ... reprosecute...

MATTHEWS:  When did they start being a check and balance?

MCMAHON:  There‘s no—there‘s no balance, Todd.  There‘s no balance.  There‘s just a check—saying, No, no thanks, not right now, not so fast, not until...

HARRIS:  Yes, saying no to a trillion-dollar health care...

(CROSSTALK)

MCMAHON:  Todd, that‘s not—that‘s not a program for success.  And frankly, this isn‘t a Democratic problem, this, as you point out correctly, is an incumbent problem.  And the fact that you‘re sitting there in Florida today on Marco Rubio‘s campaign, which you‘re doing a great job on, demonstrates the point.  Charlie Crist was unbeatable in the Republican primary, unbeatable in the general election, and now he‘s got incumbent-itis.  He‘s a Republican.  He‘s not a Democrat.  The problem is not a Democratic problem, it‘s an incumbent problem.  Tell me that‘s not true, Todd, Marco Rubio‘s consultant.

HARRIS:  Well, no, you are partially true, but the reason why Charlie Crist is having problems in Florida...

MATTHEWS:  He‘s the governor of Florida...

HARRIS:  ... among Republican primary voters...

MATTHEWS:  ... and he‘s perceived as the worst thing you can be right now, a moderate, right?

(CROSSTALK)

HARRIS:  The reason he‘s having problems is because he‘s not able to say credibly to Republicans that he could go to Washington and be a check and a balance on the Obama administration.  Marco Rubio can make a very credible argument to Florida voters...

MCMAHON:  Based on?  Based on?

HARRIS:  Based on his core beliefs.  So when Charlie Crist stood next to Barack Obama and embraced, literally and figuratively, the stimulus package, that was a signal to Florida Republicans that he is not someone who‘s going to go and take on Nancy Pelosi, take on Harry Reid...

MCMAHON:  No, Todd...

HARRIS:  ... and take on Barack Obama in Washington.

MCMAHON:  That was a signal to moderate Republicans in Florida that he cared more about his state than he cares abut saying, No...

MATTHEWS:  OK...

MCMAHON:  ... saying, No thanks, not right now.  And that‘s the problem Republicans have right now.

(CROSSTALK)

MATTHEWS:  I just wanted to get the Republican bragging points straight here.  So the Republican Party has kept us safe, except for 9/11.  Is that the argument?  No, really, because you had the worst attack on the American homeland in history, but you‘re bragging about your ability to defend the country because you say—you defended America, except for 9/11.  That‘s your defense, right?

HARRIS:  Look, Chris...

MATTHEWS:  That‘s the bragging point of the Republican Party for the last—I asked you to name one thing they‘ve done for this country in 15 to 20 years.  I‘ll keep going back further.  And you‘re having a hard time giving me an answer.  What has the Republican Party...

HARRIS:  No, no.  I‘m...

MATTHEWS:  ... done for the country?

HARRIS:  I‘m not...

MATTHEWS:  I‘m just—it‘s a good question.

HARRIS:  Chris, I‘m not having...

MCMAHON:  Squandered the surplus.

HARRIS:  ... a hard time giving you an answer.

MCMAHON:  Don‘t forget, squandered the surplus.

HARRIS:  When I decide to write a book about the history of the last 20 years of the Republican Party, I‘ll be happy to talk to you about that.

MATTHEWS:  No, just give me one...

HARRIS:  My job is to win elections—my job is to...

MATTHEWS:  Just give me one.

HARRIS:  ... win elections in 2010.

MATTHEWS:  OK.

HARRIS:  And I‘m going to keep my eye on the ball.

MCMAHON:  He doesn‘t have one.  He doesn‘t have one!

MATTHEWS:  Steve McMahon—Steve McMahon, YouTube is watching.  You‘re the Republican consultant, one of the best in the country.  Tell me what the Republican Party has done for this country in the last 10 to 20 years?  Thank you, Steve McMahon.

(LAUGHTER)

MATTHEWS:  Thank you, Todd Harris.  You got plenty of time, ‘64 -- we‘ll have you back with the answer.

Coming up tonight at 6:00 Eastern, Ed Schultz has an exclusive

interview with Senator Byron Dorgan, by the way.  He‘s quitting the Senate

after all these years in the hometown, I believe, of Ed Schultz.  Up next -

he‘s from North Dakota.

Up next: Where do Dick Cheney and other critics get off attacking President Obama for wanting to try terror suspects up in New York in federal court, when that‘s exactly what Cheney and Bush did with the shoe bomber?  They tried him in New York, and now they‘re saying it‘s the worst thing you can do.  It‘s unpatriotic.  What, to do what they do?  When is the bark going to come off this tree?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Is Republican criticism of President Obama on fighting terrorism a little hypocritical?  Here‘s RNC chairman Michael Steele last night on HARDBALL.  Let‘s listen.

(BEGIN VIDEOTAPE)

Is the right side we have to have military tribunals for these kind of people, on the wrong side, we have criminal cases?  Is it as simple as that?

MICHAEL STEELE, RNC CHAIRMAN:  I think, to a large extent, it is, Chris, because at the end of the day, you got to call it what it is.  Who are you dealing with here?  Who are the—who are the jury of Khalid Mohammed‘s peers?  Who are his peers?  I mean, what American, what New York citizen is his peer that can sit in judgment of him?

MATTHEWS:  OK.  So that‘s the wrong side of this issue.

STEELE:  So it‘s the wrong side, and the reason it is...

MATTHEWS:  Then why did your president, our president at the time, George W. Bush, try the shoe bomber under criminal court in the United States?  You said it was the wrong way to go.  Well, then, why did your president and our president at the time do that?

STEELE:  You know, look, again, I wasn‘t in that meeting.

MATTHEWS:  Have I tricked you?

STEELE:  And it‘s not...

MATTHEWS:  I have tricked you.  I‘ve let you give a policy position here which I‘ve now explained to you ran contrary to what the Republican president did!

(LAUGHTER)

MATTHEWS:  You‘re laughing, but you just took a principled position...

STEELE:  Wait a minute.  Hold on.

MATTHEWS:  ... and said it‘s is wrong to have a criminal trial!

(END VIDEOTAPE)

Well, for more on the Republican hypocrisy and fire-breathing, let‘s bring in David Corn, who‘s the Washington bureau chief for “Mother Jones” and a columnist for Politicsdaily.com, and Ron Christie, who‘s a former adviser to Vice President Cheney.

I think I did catch him in a little contradiction there, the chairman of the Republican National Committee, because I asked him a principled question.  Is it better for this country to try these countries (SIC) as warriors or try them as criminals?  He said, as a matter of principle, we should try them as warriors.  And I said, Well, why did we try the shoe bomber as a criminal?  I‘ll ask...

RON CHRISTIE, FORMER DICK CHENEY AIDE:  He made a mistake.  He made a mistake.

MATTHEWS:  Well, what is the right answer?

CHRISTIE:  The right answer to that is the shoe bomber incident took place in December of 2001.  He was originally charged for obstructing a flight crew operation.  He was convicted.  He was put in jail.

Congress and the Bush administration recognized that we needed to take more steps, more concrete steps to protect the country.  In the aftermath of a Supreme Court decision, the Congress enacted the Military Commission Act of 2006, which specifically called for one being an enemy...

MATTHEWS:  OK...

CHRISTIE:  ... an unlawful military combatant—let me finish this, Chris—as one who was a member of al Qaeda, who received material support from al Qaeda.

The difference between the shoe bomber and the incident that we have right now are apples and oranges.  The individual who came and tried to blow up a plane on Christmas could be tried as an enemy combatant because the Bush administration and the Congress, in a bipartisan manner, 65 votes in the Senate...

MATTHEWS:  So what are...

(CROSSTALK)

CHRISTIE:  ... in the House of Representatives...

DAVID CORN, “MOTHER JONES”:  You know...

CHRISTIE:  ... specifically allowed for trying people as unlawful military combatants because they tried...

MATTHEWS:  Why is—so why is the shoe bomber in for life now?

CHRISTIE:  The shoe bomber was, again...

MATTHEWS:  Why is he in for life now?

CHRISTIE:  He was tried, Chris.  He was tried for obstructing a flight crew...

MATTHEWS:  Right.

CHRISTIE:  ... and he was convicted.  We did not have the statutes on the book...

MATTHEWS:  So why is he in for life now?

CHRISTIE:  Because that was the sentence he was given in 2001.  My distinction is the law was not on the book in 2001, as it was in 2006...

MATTHEWS:  OK, so...

(CROSSTALK)

CHRISTIE:  ... because the circumstances have changed because the Congress worked in a bipartisan fashion to change the law.

CORN:  This is a political attack.  It has nothing to do with policy. 

It has nothing to do with—with—with legality. 

It wasn‘t just the shoe bomber.  Zacarias Moussaoui, the blind sheik, the tried to blow up the World Trade towers in 1993, they have all gone through criminal courts.  They have all produced intelligence that has been actionable in both the—in the Bush and Clinton and Obama administrations.

And, so, what they are doing now is, they see an opening.  Your boss, your former boss, Dick Cheney, his daughter Liz Cheney is out with a statement now saying that President Obama doesn‘t care about national security. 

This is a guy who spent months trying to figure out what to do in Afghanistan, which is really all about confronting Islamic extremism.  And he has had more Predator drone strikes in Afghanistan that has taken out more Taliban leaders and more al Qaeda operatives that Bush did in the last year of his presidency. 

Now, you can argue whether those are the right policies, but for them to come out and say Obama doesn‘t care about national security, he is distracted, and that he would rather give rights to terrorists than to protect Americans is just absolutely bunk.  And it just—it cheapens the debate, Ron.

(CROSSTALK)

CORN:  It cheapens the debate, Ron.

(CROSSTALK)

MATTHEWS:  Let‘s give them the full quote.  The former vice president‘s daughter put out this statement.  They must have a house, by the way, with a huge printing operation, because they‘re issuing statements in every direction.

(LAUGHTER)

CHRISTIE:  Actually, she works at a particular foundation. 

(CROSSTALK)

CHRISTIE:  So, it is not at a house. 

MATTHEWS:  I‘m sorry.  One of these senior fellowships. 

(CROSSTALK)

CHRISTIE:  If you want to take a cheap shot and say somebody is working...

(CROSSTALK)

MATTHEWS:  No, it‘s not a cheap shot.

CHRISTIE:  No, you said that they have a printing press in their house.  If you want to take that shot, she actually works for a living.

MATTHEWS:  Well, let me just tell you something.  Dick Cheney issues statements now on a regular basis.  His family is issuing statements on a regular basis.  I find it interesting that these statements are e-mailed out of somewhere and they somehow become journalistic... 

(CROSSTALK)

CHRISTIE:  But your original—your original comment was, the Cheneys must have a printing press at their house. 

MATTHEWS:  Yes, they do.

CHRISTIE:  She actually works for a living.  That‘s the distinction.

MATTHEWS:  What is this organization that she works for?

CHRISTIE:  Well, she actually is very involved, Chris, in trying to get the word out of making the distinction of, how can we take steps to keep America safer?  What are we doing on national security? 

(CROSSTALK)

CORN:  She has a foundation.

(CROSSTALK)

CHRISTIE:  Oh.  So, now it‘s OK—it‘s OK for...

(CROSSTALK)

CHRISTIE:  If the Republicans have a foundation, there‘s something wrong with it.

(CROSSTALK)

CHRISTIE:  The hypocrisy that you guys display...

MATTHEWS:  These enterprises that issue statements...

(CROSSTALK)

MATTHEWS:  “President Obama has weakened American security by treating terror as a law enforcement matter, refusing to use every tool at his disposal to prevent attacks and take his eye off the ball.”

So, what does that mean, refusing to use every tool at his disposal? 

CHRISTIE:  Well, I think, again, I‘m speaking for myself.  I‘m not speaking for Liz Cheney. 

MATTHEWS:  No, no.

(CROSSTALK)

MATTHEWS:  ... this printing operation.

CHRISTIE:  Well, I can‘t speak for Liz Cheney.  She can speak for herself. 

I think it is very important that the president of the United States takes every step necessary to protect the American people.

(CROSSTALK)

MATTHEWS:  We have got 30,000 more troops going to Afghanistan.  What is he supposed to do?

(CROSSTALK)

CHRISTIE:  Excuse me.  Let‘s take one specific example.

Let‘s take bringing the people, the mastermind between the 9/11 attack to New York City.  You have the New York City police commissioner saying, I don‘t know that I have the resources and I don‘t know that I have the money to adequately protect the American people. 

(CROSSTALK)

MATTHEWS:  How is that not using every means at his disposal? 

(CROSSTALK)

CHRISTIE:  No, let me answer the question.

(CROSSTALK)

MATTHEWS:  How is that not using every means...

(CROSSTALK)

CHRISTIE:  It is answering the question by saying if the police commissioner in the city of New York says that he doesn‘t know if he has the police officers or the money to adequately protect the city of New York during the trial, that makes America—that makes America more safe. 

(CROSSTALK)

CORN:  Mayor Bloomberg says, fine, bring him here.  I want to see him tried here. 

So, you can come up with one statement from a police commissioner. 

(CROSSTALK)

CHRISTIE:  Oh, the police commissioner of New York City. 

CORN:  The mayor of New York City.  I will give you—I will trump your commissioner with the guy he works for. 

CHRISTIE:  The hypocrisy that you both illustrate here when you say how... 

(CROSSTALK)

CHRISTIE:  ... country less safe.

CORN:  There is no hypocrisy.

(CROSSTALK)

MATTHEWS:  This statement is not coming from the Cheney household, OK?

Let‘s go to another statement.  It‘s not coming out of the printing press that issues forth statement by statement every hour on the day from the Cheney household. 

Here is one from North Carolina Congresswoman Virginia Foxx, who is along the same line.  This was on a conservative radio show yesterday.  We only have the audio, because it was radio.  Let‘s listen. 

(BEGIN AUDIO CLIP)

REP. VIRGINIA FOXX ®, NORTH CAROLINA:  How can you believe anything the man says anyway?  Has not kept a single promise to the American people.  He‘s kept promises to his union base, to his trial lawyers.  You know, he is—he signed an executive order to close Guantanamo.  All the promises he kept are the ones that endanger our lives. 

(END AUDIO CLIP)

MATTHEWS:  So, he‘s endangering our lives, the president?

CHRISTIE:  I wouldn‘t agree with her statement in that particular instance.  I agree with a lot of the substance of what she said. 

But I think it is a little bit far—and politicians on both sides of the aisle do this—Alan Grayson from Florida, a Democrat, comes out with some pretty wild statements.  You can‘t take one member of Congress and say that they speak for either the Democrat or the Republican Party. 

I will say, however, which I said at the outset, President Obama is not using all the tools at his disposal to protect the American people. 

CORN:  Well, let‘s go—let‘s go—let‘s go back to Liz Cheney, because, in the sometimes you quoted, she also said, “It is time for the president to making defending this nation a top priority,” as if he is not making—he has the daily briefings.  He figures out what to do in Afghanistan.

(CROSSTALK)

MATTHEWS:  What is our arsenal?  What do we spend every year on national defense?

(CROSSTALK)

CORN:  He‘s attacking Pakistan with Predator drones. 

(CROSSTALK)

CORN:  Do you seriously believe that he comes to work each day not thinking about defending the country as a top priority?  Do you seriously believe that?

CHRISTIE:  Oh, No.  I absolutely think he wants to protect the country. 

CORN:  OK.  So, then, you differ with Liz Cheney.

CHRISTIE:  Excuse me. 

(CROSSTALK)

CHRISTIE:  My point is, the Democrats, I do not believe, view this as a war on terrorism.  They look at this as a legalistic matter.  The interpretations we have heard from the president of saying, the alleged act, or he said the suspect, that is a legalistic terminology.

(CROSSTALK)

CHRISTIE:  The Republicans, the Bush administration recognized this.

(CROSSTALK)

MATTHEWS:  You are making a formidable effort here to defend the indefensible. 

But here is some more of this stuff, this argument that everything that the Republican Party does makes the country stronger and everything the Democratic Party does, no matter what it does, makes us weaker, so that maybe someday, when we get hit again, because every country is going to get hit eventually, then they will be able to jump up and say, we were right, you were wrong. 

I know how this game is played.  Here is a Republican Senate candidate, Jane Norton, at a town hall in Colorado this week.  Let‘s listen, because it is the same anthem. 

(BEGIN VIDEO CLIP)

JANE NORTON ®, FORMER COLORADO LIEUTENANT GOVERNOR:  And what I

believe is happening, Steve, is the fact that the rights of terrorists are

are—are more important in this administration than the lives of American citizens. 

And we are seeing it in the criminal field.  We are seeing it in the health care field.  We are seeing it in almost every—every area that we are looking at. 

(END VIDEO CLIP)

MATTHEWS:  What do you make of that?  What is it—what do you mean the lives of Americans aren‘t as important?  That is why there is a health care bill, because the Democrats don‘t care about the lives of Americans?

(CROSSTALK)

CORN:  She is saying that the rights of terrorists...

MATTHEWS:  What does that mean?

(CROSSTALK)

CORN:  ... are more important than the health care bill.

(CROSSTALK)

MATTHEWS:  What does this jabberwocky mean?

CHRISTIE:  But, again, you are trying to pin one...

(CROSSTALK)

MATTHEWS:  I‘m asking.

(CROSSTALK)

CHRISTIE:  I‘m trying to answer your question. 

(CROSSTALK)

MATTHEWS:  There‘s a whole pattern of lines coming out of the Cheney household and elsewhere of the same stuff. 

(CROSSTALK)

CHRISTIE:  Let me talk to you about the pattern that is coming out from Republicans at the federal level, at the state level. 

MATTHEWS:  Right. 

CHRISTIE:  Republicans are very concerned about the leadership of this president, his administration. 

From the outset, the president said he...

MATTHEWS:  Because he got elected. 

CHRISTIE:  The president said he wanted to close—Chris, again, you are trying to make light of something that is very serious that you two should actually take more serious consideration to talk about. 

MATTHEWS:  What is that? 

CHRISTIE:  This president from day one has said, I want to close Guantanamo, without actually thinking through the ramifications of doing so.  I‘m going to bring people, enemy combatants to the United States, conferring constitutional rights on them that they didn‘t have before.

These are very serious issues.  And you can laugh about it and you can talk about it, but it does make this country less safe. 

(CROSSTALK)

CORN:  They are serious issues.

(CROSSTALK)

MATTHEWS:  The idea that because you are on the right wing of a political argument that somehow makes you more patriotic is insane. 

CHRISTIE:  Oh, no.  And I didn‘t say that. 

(CROSSTALK)

CHRISTIE:  This has nothing to do with being partisan, Chris. 

(CROSSTALK)

MATTHEWS:  There is a good argument out there that Gitmo and all that it represents worldwide has caused more people to sign up for organizations like al Qaeda to give up their lives in suicide attacks on Americans because they are so hateful of America, because they see us as the evil one.

(CROSSTALK)

CHRISTIE:  And they see us as the evil one because they have already issued fatwas that say that they do not like the United States.

(CROSSTALK)

CHRISTIE:  But that is not why they are...

(CROSSTALK)

MATTHEWS:  It is a legitimate argument on both sides.

(CROSSTALK)

MATTHEWS:  David Corn, Ron Christie, the idea of the moral superiority on security of the right wing in this country is an absurdity, after what happened in the last administration. 

Up next: the backstory behind this iconic image of President Richard Nixon and Elvis Presley, one of my favorite postal stamps anyway, and the historic distinction it has achieved.  By the way, it is the most sought-after archival picture. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Time for the “Sideshow.” 

Take it from me.  This morning, the ranking Republican on Homeland Security, New York Congressman Peter King, offered up some advice for the president over that thwarted Christmas Day attack.  Here he is. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Name one other specific recommendation the president could implement right now to fix this. 

REP. PETER KING (R-NY), HOMELAND SECURITY COMMITTEE RANKING MEMBER:  I

think one main thing would be to use—just himself, to use the word terrorism more often. 

(END VIDEO CLIP)

MATTHEWS:  Oh, that will do it.  Look, there is an enemy plotting hour by hour, I think it is fair to say, to kill us, to drag the world into a horror where every one of the billion Islamic people out there in the world has to choose sides, where whole parts of the world have to choose between modernity and extremism. 

Constantly braying against terrorism is not going to reduce that danger by an iota.  It could well be playing into the hands of those who want that horror tomorrow.  Just keep saying the word terrorism, as many people, like Ron Christie, argue, is not the solution. 

Next, picture this, the year, 1970, President Nixon and Elvis Presley in the Oval Office.  There‘s the picture.  The king of rock ‘n‘ roll set up this iconic meeting hoping to be appointed a federal agent for the Bureau of Narcotics.  Didn‘t happen. 

Anyway, in honor of what have been Elvis‘ 75th birthday this coming Friday, the National Archives is putting together an event tonight commemorating the bizarre meeting of minds.  The Nixon-Elvis photo opportunity regularly beats out the Declaration of Independence and the U.S. Constitution as the most requested image from the National Archives. 

Up next:  There‘s new information about that al Qaeda double agent over in Afghanistan and the seven CIA employees he killed—what it means for our intelligence efforts against al Qaeda coming up here next on HARDBALL.

(COMMERCIAL BREAK)

MATT NESTO, CNBC CORRESPONDENT:  I‘m Matt Nesto with your CNBC “Market Wrap.”

Stocks ended the day mixed with a blockbuster sales report from Ford helping lift the S&P 500.  The Dow industrials were off—or up, rather, just slightly here today, the S&P 500 also positive.  The Nasdaq was down seven points. 

Also worth noting, the—the—the private employment report soft showing recovery under way in December.  The pace of job losses continues to slow, while the number of planned layoffs fell to its lowest mark in two years, investors anxiously awaiting that Friday jobs report coming out in just two days. 

Meanwhile, the service sector showing marginal improvement.  A small uptick in the ISM gauge was slightly below expectations, but still indicates growth in the sector.  Shares at Alcoa rose 5 percent today on hopes that it will post strong fourth-quarter earnings on Monday. 

And Boeing was up 3 percent after signing a deal to sell six military transport planes to the UAE. 

That‘s it from CNBC.  We‘re first in business worldwide—now back to

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Well, is our intelligence system failing?  A Nigerian whose own father warned the CIA and U.S. Embassy folk about him was able to purchase a plane ticket with cash, check no bags, board a flight with explosives and a syringe sewn into his underwear and then detonate himself on board.  He was able to do all that.

And an al Qaeda double agent over in Afghanistan who was recruited by Jordanian intelligence to supply us with information was able to lure seven experienced CIA officers and contractors to their deaths in Afghanistan.  Jordan‘s use of this informant mirrors the storyline in the spy thriller “Body of Lies” starring Leonardo DiCaprio.

Here‘s a scene where the head of Jordanian intelligence flips a low-level al Qaeda operative to spy for him and the CIA officer played by DiCaprio.  Check it out.

(BEGIN VIDEO CLIP, “BODY OF LIES”)

UNIDENTIFIED ACTOR:  Continue your life with your brothers in al Qaeda.  We will devise a way to talk. 

No, no, no.  Come, come, come.  Up, up, up.  Go. 

And, so, we throw him back into the sea to swim where he naturally swims, to learn what he naturally learns.  See long he remembers my benevolence. 

(END VIDEO CLIP)

MATTHEWS:  Body of lies was based on the book by same name written by “Washington Post”‘s David Ignatius.  He‘s here tonight.

David, let‘s talk about a couple of these horror stories.  One is the one you‘re most familiar with.  CIA officials meet with what they think to be someone who is working for them.  That person blows himself up and them.  They are all killed at the front lines. 

DAVID IGNATIUS, COLUMNIST, “THE WASHINGTON POST”:  Following—

following on this clip that we just watched from “Body of Lies,” the—the

the agent that they were meeting in Khost, which is in Eastern Afghanistan, was a Jordanian agent.

It was somebody who was a radical Muslim doctor, part of this jihadi underground.  And the Jordanians thought they had turned him, so that he was a double agent.  And they sent him into the tribal areas of Pakistan, thinking that he might be able to find the location of Ayman al-Zawahri, the number-two man in al Qaeda, a big, big target for the U.S. We were so excited about this, almost panting at excitement that this target could be delivered to us. 

It turns out that this double agent we thought we were running was, in fact, a triple agent, something you rarely see in the intelligence world, who had been at some point flipped back by al Qaeda.  So when he entered that space in Khost, came into that camp, he was wearing a suicide vest. 

We had too many people there.  We should have never met with him inside the perimeter of the base.  And he killed seven of our CIA officers and one Jordanian that was his handler. 

It is as big of a screw up as I can remember in the intelligence world with some really important lessons.  But the starting point, Chris, is we are so hungry for information about this adversary that, in a sense, we are easy targets for very clever operators.  And al Qaeda, they are very clever operators. 

MATTHEWS:  You are an expert on this spy effort to try to catch the bad guys.  In your mind‘s eye, how big is al Qaeda?  Where is it?

IGNATIUS:  People talk—

MATTHEWS:  Are there hundreds of al Qaeda people on the other side? 

Thousands? 

IGNATIUS:  No, there are certainly not thousands.  People talk about a hundred to two hundred people who are in the tribal areas of Pakistan, being part of what we call al Qaeda Central.  That is the old al Qaeda that was trained in Afghanistan, in the safe havens, until we came in after September 11. 

So they‘re hiding out, running from place to place.  Our Predator attacks have made life very difficult for them. 

But what this attack on our CIA officers in Khost shows is, as difficult as life may be for these people, they are still capable of planning really smart attacks, taking people and turning them back against us.  This was a very sophisticated operation, not the sort of thing that you think people on the run can pull off.  So that is a warning sign. 

MATTHEWS:  How sophisticated was the effort with the Nigerian?  How tough was that for them to pull off and get as far as they did?  He got over Detroit. 

IGNATIUS:  He was trained.  He was—there are a series of processes at work here.  First is the radicalization.  He becomes much more militant and outspoken in his Islamic belief. 

He goes to Yemen.  He meets other people.  And then he moves into a new phase where he is getting actual training as a terrorist.  That is the point at which his father really gets upset.  His father has seen text messages. 

It is so amazing, Chris, to think about it, his father, a distinguished gentleman in Nigeria, goes to the CIA station in Nigeria and tells a CIA officer, I‘m worried that my son is a dangerous radical.  He gave them that explicit a warning. 

Meanwhile this young man is getting his ticket with cash, traveling

with no baggage, with explosives sewn into his underwear and we are unable

--

MATTHEWS:  Why would the station chief, who is obviously a courageous public servant, not act on that?  Why would a Spy sitting over there in Nigeria, in Lagos, not say, wow, this is great, I know something that could save my country hell. 

IGNATIUS:  He did act. 

MATTHEWS:  Huh? 

IGNATIUS:  He did act on it. 

MATTHEWS:  What did he do? 

IGNATIUS:  It is important that people—that your viewers understand what the problem is.  He did act on it.  He sent a message to the Counter-Terrorism Center in Washington that the CIA has.  That was also sent to the National Center for Counter-Terrorism, which is a separate unit.  So he did the right thing bureaucratically. 

What we have to realize is—we talk about connecting the dots. 

There are just too many dots for anybody to see them all. 

MATTHEWS:  How many people have top father banker saying, my son has been radicalized; look out; he is headed to Yemen; he is trouble.  How many cases are there like that that can‘t be checked out? 

IGNATIUS:  The estimates that my sources gave me is that there is an average of one of these visa viper warnings from every embassy around the world every day.  That‘s 180 embassies, 180 requests for special scrutiny every day coming in.  We don‘t have enough people.  We don‘t have the systems.  We have created a system where everybody is going to send in everything that could possibly be a problem.  So you don‘t see this. 

MATTHEWS:  Your guess, how many people are there like this like this guy from Nigeria coming at us right now?  Somewhere trying to get on an airplane somewhere?

IGNATIUS:  I couldn‘t give you a guess about numbers, except to say it is more than zero.  There are some people like this—

MATTHEWS:  As we speak, they are out there trying to get to us? 

IGNATIUS:  This is a really smart, determined adversary.  People have to understand that. 

MATTHEWS:  Al Qaeda in Afghanistan.  What about al Qaeda—in Yemen, you‘re talking about.  How many al Qaeda organizations are there like this coming at us right now? 

IGNATIUS:  There are a half dozen major ones.  It is a very diffuse organization.  Their command and control, Chris, is the Internet.  They are as spread out and diffuse as the Internet is.  It‘s almost you don‘t --  

MATTHEWS:  Are our spy agencies as smart as they are? 

IGNATIUS:  Our spy agencies are smart.  Our problem is we have too much bureaucracy.  We have too many people, too many leads, too many dots.  We need a more elite approach to this.  We need smarter people, better targeting.  That is my own feeling.  Less bureaucracy, more—

MATTHEWS:  Last question, should we bring the Ivy League types back to run the CIA?  I‘m serious, the elites.

IGNATIUS:  We should bring really smart people from all over.  We have smart New York Cops.  We need the very best people we have in our country. 

MATTHEWS:  We need hunch.  Thank you, David Ignatius, author of the book “Body of Lies.”  He makes movies, too, this guy.

Up next, with three big names deciding not to run for re-election, Dodd, Dorgan and Ritter, how bad a year will it be for the Democrats?  What does it say about President Obama‘s standing these days that the Democrats are on the run, literally?  Not running, running away.  The politics fix coming up next.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now for the politics fix.  Chuck Todd is NBC News chief White House correspondent and also NBC News political director.  Eugene Robinson, of course, a Pulitzer Prize winning columnist for the “Washington Post,” and an MSNBC political analyst. 

Chuck Todd, was the White House shaken to its boots by the departure now, the jumping of ship of both Dorgan and Dodd?  I was amazed that Dodd, after all these months of fighting for that seat and holding on to it, has decided to jump? 

CHUCK TODD, NBC NEWS CHIEF WHITE HOUSE CORRESPONDENT:  I tell you this, it is funny.  They are very defensive about this and they are really upset that somehow it‘s getting—this whole sort of day of—Black Tuesday is sort of what we referred to it in “First Read”—that all of these Democratic retirements in one day are bringing the spotlight on this idea that hey, it‘s Obama‘s Democratic party and these are a bunch of guys that are not running—that don‘t want to run this year under his banner.

But take them individually.  The Dodd thing is something privately that, in their hearts, they didn‘t want to have to be the ones to tell him, you really shouldn‘t run again.  But in their heads over here in the White House, they all had their fingers crossed that he would come to the conclusion that maybe he shouldn‘t try to get another term, because He was politically in a very tough spot. 

Now they‘ve got a candidate in there that, as long as he runs a B campaign, in Blumenthal, he‘s going to hold that Senate seat.

Dorgan is a stomach punch, Chris, because Dorgan is the only—he‘s sitting there in that upper Midwest Plains, one of those red states, but not a ruby red state, that is probably the only Democrat that can hold He was probably on the fence.

Does he send a message?  The fear, I think, these guys have, and others on Capital Hill, does he send a message to other wavering incumbents that, hey, Dorgan‘s a guy who has survived tough elections before; he‘s decided he doesn‘t have the stomach for it; maybe I don‘t either.

MATTHEWS:  Gene, these guys have hunches.  They have friends back home and they can tell which way the wind is blowing.

EUGENE ROBINSON, “THE WASHINGTON POST”:  Well, they can tell which way the wind is blowing.  I think Chuck is right.  You have to look at each decision individually.  Objectively, you have to say that Connecticut looks better for the Democratic party with Blumenthal than—

MATTHEWS:  The attorney general is the most popular guy in the state. 

He‘s clean.

ROBINSON:  He‘s very popular.  And Dodd was in a whole world of trouble up there, as he acknowledged in his speech.  But Chuck is right.  Dorgan is a stomach punch and is a problem.  I don‘t know how the Democrats hold that seat. 

MATTHEWS:  Look at these numbers, guys.  Know nothing about politics but these numbers right now; right track/wrong track right now: 33 percent, according to our poll, NBC/”Wall Street Journal” poll, think this country is headed in the right direction.  Attitudes towards the two political parties; Democrats, 35 percent, just over a third, like the Democrats, almost half don‘t like them; Republicans worse off, 28 percent like the brand name Republican; 43 percent don‘t like them. 

So it seems to me, Chuck, this is a tough time.  I opened the show by saying it‘s a brutal country for—no country for old men.  If you‘re thinking about retirement, this ain‘t a bad time to do it.  Hit the sheets,  enjoy life, go get a lobbying job, make ten times as much money, and don‘t put up with the hell you‘re facing this November. 

TODD:  You hit the nail on the head in a guy like Dorgan.  I talked to a guy who has known him for years who says, look, he‘s in that last stage of life; if he ran and run, by the end of his next term, he would be in his mid-70s.  If he retires now, he feels like he‘s got one more act in him.  Whatever it is he wants to do, could be to make money, could be to go find a job in the Obama administration.  You don‘t know. 

You‘re right.  All of a sudden you throw in the political environment.  I‘m sorry; I know Dorgan wants to say this was 90 percent a personal decision and maybe only 10 percent about politics.  But if he thought he could win another term rather easily, you do would wonder.  The same with Ritter and the same with some of these guys.

But I want you—you quickly point out, this conundrum of this cycle is—the reason why nobody is ready to say that is another ‘94, as unpopular as the Democrats look right now to some, so are the Republicans.  What is that going to mean to this electorate come November? 

MATTHEWS:  Don‘t be an incumbent.  We‘ll be right back with Chuck Todd and Eugene Robinson for more of this question.  What are these retirements going to look like to everybody who is still there?  That‘s my big question.  Are people going to get freaked out?  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Chuck Todd and Eugene Robinson for more of the politics fix.  The impact on President Barack Obama—you‘re at the White House, Chuck, covering it.  You talked about the concussion they felt today from Dorgan and from Dodd quitting.  Do they sense more is coming, first of all? 

TODD:  Well, that‘s what they‘re working—it‘s not just these folks, it‘s the folks at Capitol Hill.  Chris, the next four to six weeks are pivotal now in this retirement phase, because, frankly, I think they have not had the number of retirements that sort of Republicans need to turn this into ‘94, particularly on the House side. 

But I think the next four to six weeks are going to tell us a lot.  In ‘94, a lot of retirements actually happened in ‘94, not in ‘93.  And so that‘s what these guys need to do now, work the phones, find out who those wavering guys are and say, hey, don‘t do this. 

Dorgan caught them off guard.  They didn‘t really know that was coming.  They don‘t want to be caught of guard by somebody else. 

MATTHEWS:  How do you encourage a man or woman who thinks they‘ve reached the end of their string—I‘ll ask Gene this.  How do you tell somebody who knows they‘ve reached the end of their string, they‘ve talked to their buddies back home, talked to their family—they say, it doesn‘t look good; people are mad at you.  How do you say they‘re wrong?  The people are wrong.  Your family is wrong.  Your friends are wrong. 

ROBINSON:  You come up with some money to throw into their district to help them.  You promise them all sorts of help.  Maybe you promise them some goodies that are going to make the folks at home happy.  And you tell them that the president needs you. 

MATTHEWS:  You mean, take the bullet?

ROBINSON:  Well, you try.  What else are you going to say?

MATTHEWS:  Let me ask you about ‘94, because we always remember the big tsunami years.  Do you have a sense—as a reporter, do you think—can you report that they are afraid of a tsunami this year, meaning the loss of say 40 to 50 seats in the House of Representatives, the possible loss of the US Senate, a real blowout for the Republicans? 

TODD:  No, because they believe that they‘ve hit—this is the floor right now, that the health care fight took a lot out of them.  They used up a lot of political capital.  They are not going to have more fights like this.  They did a lot of the ugly, unpopular work in ‘09.  They‘re not going to have to do that in 2010.  At least that‘s their belief. 

And it would take, Chris, the floor dropping again, another Wall Street bailout out of nowhere, or something like that that they would be forced to do for that floor to go down.  So they think they won‘t have that issue.

MATTHEWS:  As long as the people generally like Barack Obama, I agree with you.  Chuck Todd, thank you.  Eugene Robinson, Thank you.  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, and Ed‘s exclusive interview with the retiring senator from North Dakota, Byron Dorgan. 

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

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