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updated 1/26/2010 10:53:27 AM ET 2010-01-26T15:53:27

Guests: Hampton Pearson, Chuck Todd, Howard Fineman, Peter Beinart, Chris Cillizza, Eugene Robinson, Susan Page, Bill Pascrell

CHRIS MATTHEWS, HOST:  Fear factor.

Let‘s play HARDBALL.

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

Running for cover.  The Democrats woke up this morning to a one-two punch of bad news.  First, Arkansas Democrat Marion Berry decided not to run for reelection to his House seat.  Then Vice President Joe Biden‘s son, Beau Biden, announced he would not be running for his dad‘s old Senate seat in Delaware, making it another likely Republican pick-up.

Whether or not either of these decisions was prompted by last week‘s Massachusetts election for the Senate, the landscape is looking treacherous for Democrats on both sides of Capitol Hill.  One Democrat who‘s getting restless is U.S. Congressman Bill Pascrell of northern New Jersey.  He says when fellow Democrats say the public will get behind health care as soon as they understand it—he says that is not only arrogant to say, it‘s, in his words, “BS.”  He joins us later.  That should be interesting.

So how does the White House hit the reset button to avert disaster this November politically?  Does President Obama go left, does he go center, or offer little crowd-pleasing nibbles like school uniforms, like Bill Clinton did after losing the House back in ‘94?

Plus Democrats aren‘t the only ones in trouble.  A lot of Republicans face potential challenges from the tea party types.  John McCain is about to be challenged by former U.S. congressman and until today hard-right radio talker, J.D. Hayworth.  Could McCain get bitten by the same populist bug that‘s biting Democrats?

And get this.  South Carolina Republican senator Jim DeMint is most famous for saying President Obama could face his “Waterloo” when he loses health care.  Well, now he says that‘s not what he meant.  It is, however, what he said.  It‘s in the HARDBALL “Sideshow.”  Isn‘t videotape dangerous, you politicians out there?

We start with Democrats running for cover.  Chuck Todd is the political director and chief White House correspondent for NBC News, and “Newsweek‘s” Howard Fineman is an MSNBC political analyst.

Gentlemen, you are the pros.  I start with Chuck at the White House.  What do they make of the fact that Beau Biden, the attorney general of Delaware, just back from his duty in—I think in Afghanistan—Iraq, rather—back from serving his country over there—well, here‘s what Beau Biden had to say.  “I have a duty to fulfill as attorney general in Delaware and the immediate need to focus on a case of great consequence, and that is what I must do.  Therefore, I cannot and will not run for the United States Senate in 2010.  I will run for reelection as attorney general.”

He has a very tough case up there, those watching right now.  It‘s involving a charge of molestation of children by a pediatrician, Earl Bradley, which is going to be the major case up there.  He really does have business to do as attorney general.

That said, Chuck, was there a decision by the Biden household that beating Mike Castle, the congressman up there, was going to be too tough?

CHUCK TODD, NBC CORRESPONDENT/POLITICAL DIRECTOR:  Well, look, you know, they‘re going to—they‘re in denial about this.  They‘re saying, Look, Beau Biden did—respect the way Beau Biden is doing this.  Beau Biden did what was in the best interests of Beau Biden.  But let‘s not be naive about this.  The entire Senate seat and the Senate race was orchestrated to give Beau Biden a chance to run for this seat, putting in the caretaker, the Senator there, Ted Kaufman (ph), agreeing having the appointment be made by the previous governor before she left office, so that the new governor, a Democrat that came in, didn‘t have to make the appointment, either, since it was going to look to some to be some sort of way to protect the seat and leave it open for Beau Biden.

So look, all of these instances all have personal explanations.  Marion Berry‘s got a family health issue that they‘re dealing with.  But it‘s the fact is, if the landscape were better for Democrats nationally, then any of the personal situations would suddenly feel like—by these candidates, would be something they could all overcome because the landscape looked agreeable to them.  They knew that if they put in 100 percent, they had a better than 50/50 chance to win.

MATTHEWS:  Yes.

TODD:  They don‘t feel that way now.  And so all of a sudden, the personal sacrifices feel like—I think end up being—having a greater impact.  I think it‘s—these people are being—they‘re being true to themselves about these personal issues.

MATTHEWS:  Yes.

TODD:  But the fact is, you can‘t say this national environment is not having an impact.

MATTHEWS:  Well, someone asked me a while back, when I was thinking about things like this, he said to me, Would you rather be the guy throwing the shoe or dodging the shoe?

(LAUGHTER)

MATTHEWS:  I think it‘s fair to ask, guys—Chuck and Howard.  A lot of Democrats...

(CROSSTALK)

HOWARD FINEMAN, “NEWSWEEK,” MSNBC POLITICAL ANALYST:  ... we got out of the shoe business.

MATTHEWS:  Yes, lot of—a lot of—year, fair—fairly said.

(LAUGHTER)

MATTHEWS:  A lot of Democrats are saying now, I don‘t want to be the guy dodging the shoe, because you‘re almost, to use another metaphor, a human dartboard this year.  Anything somebody doesn‘t like—the TARP money, the stimulus money, the deficit, the debt, the unemployment rate—anything you don‘t like about the world—Afghanistan, Iraq, Yemen—anything you don‘t like, vote against the incumbent.

FINEMAN:  Well, that‘s the way we do it in this country.  We have elections for precisely that reason.  The people are angry.  They‘re angry about a lot of things.  They‘re angry about Wall Street.  They‘re angry about greed in corporate America.  They‘re angry about big spending in Washington.  They‘re angry about elites in the media and everything else.  They‘re going to go after anything the can find.

Now, in the case of Beau Biden—Biden is bred for politics, OK?  I hate to be conclusory about that.  That‘s what Bidens do, OK?  This case involving Dr. Bradley reached a critical point a month ago.  In other words, he knew he was going to have to deal with this case...

MATTHEWS:  This is the case of the molestation.

FINEMAN:  Yes, the molestation in Delaware.  He knew about it a month ago.  So it took him from a month ago, when the case was coming ripe, until December, whatever day today is—the 25th...

MATTHEWS:  Yes.

FINEMAN:  ... of January, to decide that he had to focus on that case.

MATTHEWS:  But if he wins this case—in other words, this is a good, sound prosecution and the public is happy with the way the prosecution was handled, that will look good for him in four years, right?

FINEMAN:  Well, sure.  Yes.  He‘s only 40 years old...

MATTHEWS:  Right.

FINEMAN:  ... so he‘s got plenty of time, if he wants.  But I agree with Chuck.  If it looked like a really favorable wind behind the Democrats right now, everybody would be in there.

MATTHEWS:  OK.  It used to be that guys, and women, would run for Senate because it would be an astronomical opportunity you couldn‘t avoid.  In other words, these Senate seats don‘t open up very often, Chuck.

TODD:  Well...

MATTHEWS:  And when they do, you jump...

TODD:  ... particularly...

MATTHEWS:  But this time...

TODD:  Particularly in Delaware.

MATTHEWS:  ... it‘s really a partisan (ph) seat.

TODD:  That‘s right.  But particularly in Delaware, you know, where you had guys like Biden and Roth, who, for instance, were in those seats forever, and then, of course, Carper in there.  But you‘re right, in this case, the fact is, Tom Carper might not run for reelection when he‘s up again.  I think he‘s up again in ‘12.

MATTHEWS:  Right.

TODD:  There‘s been some rumors that he might not run again.  Castle himself is in his 70s.  He may only serve out the rest of this term and not run again.  So I think when you look at a Beau Biden...

MATTHEWS:  Yes.

TODD:  ... he looked at it and said, Hey, you know what?  It‘s not like I won‘t have another shot at this in, say, six or eight years max.

MATTHEWS:  Yes, I think he‘s just 70, and that‘s right, he may not run in four years, which would open it up again.  Here are the top five potential Senate takeovers, according to you and your team, Chuck Todd...

TODD:  Yes.

MATTHEWS:  ... all currently held by Democrats.

TODD:  Right.

MATTHEWS:  And we put some poetry to this.  In North Carolina (SIC),

it could be—well, it is already bye-bye Byron.  Byron Dorgan is

retiring.  In Delaware, as we said, it‘s a no-go for Beau.  The son of VP -

the son of the VP is not running.  No-go for Beau.  In Nevada—it‘s Nevada, by the way, not Nevahda—it‘s a hairy situation for the Senate leader, Harry Reid.  In Colorado, can the anointed, or actually appointed senator, Michael Bennet, win the seat to keep it?  Well, we‘ll see.  And in Arkansas, will it be the land of no Lincoln?  In other words, Blanche Lincoln loses.  Our production team is incredibly poetic...

FINEMAN:  Did you write these or did Chuck?

MATTHEWS:  I wish I could say I did.  Chuck, I think you had a lot to do with picking these five.  It looks to me like you think the best bet to lose would be—well, Byron‘s already quit, so that seat‘s probably going to the governor, right, the Republican governor.  They‘ve lost that seat.

TODD:  That‘s right.  That‘s right.  That seat‘s pretty much gone. 

They‘re struggling to find a Democrat to make it—to make it competitive.

MATTHEWS:  OK, looks like the Republicans have won North Dakota.  And the Biden seat looks like it‘s going to the former governor, the current congressman, Mike Castle, who‘s very popular.  I believe he‘s—based upon my memory, he‘s way in the 70s in terms of popularity, not just in age, as you put it.

TODD:  Well, he...

MATTHEWS:  Very kindly.  He‘s also in his 70s in terms of popularity.  So that‘s probably gone.  Harry Reid is a tough reelection battle, right, Chuck?

TODD:  He is.  The Republicans don‘t have an A-list recruit and they‘re going to have a messy primary.  I mean, Jerry Tarkanian‘s son, of all people, Danny Tarkanian—you remember the guy that used to bite the towel for the UNLV Running Rebels?  Well, his son is one of the, you know, two or three most likely Republican candidates.

And in that scenario, Democrats here think Harry Reid‘s got a boxer‘s chance—to borrow a metaphor, since Harry Reid is a former boxer—that with all the money, that he‘s got a shot.  And there‘s other people talking, actually, about Well, what if Reid decided not to run?  Some Democrats think they‘d have a better shot at it if Reid didn‘t run.

MATTHEWS:  So we have a couple more, Howard, where you have Bennet out there, appointed senator out in Colorado.  We‘ve got Blanche Lincoln, who‘s fighting like the devil to get reelected in Arkansas.

FINEMAN:  The Blanche Lincoln one is going to be—is going to be tough.

MATTHEWS:  Right.

FINEMAN:  It‘s going to be tough.  And you talked about the congressman from Arkansas who Chuck mentioned, Marion Berry, leaving out of Arkansas.  That‘s an indication of where the political winds are blowing in that state.

MATTHEWS:  Well, in the House, we‘ve got about 14 Republicans and 13 Democrats who‘ve announced their retirement.  So let‘s put it all together here.  Is there a sense, Howard, that if you‘re an incumbent congressman right now, or woman, and you‘re looking at the rest of your career—you‘re in your 50s, 60s, 70s in this case—do you say, Why do I want to be a dartboard for Barack Obama?

FINEMAN:  Yes...

MATTHEWS:  I don‘t want to take all the hits.  Is that what they‘re thinking, some of them?

FINEMAN:  Yes.  The equivalent in the corporate world is, if they‘re offering you a buyout, take it, OK?

MATTHEWS:  OK.

FINEMAN:  Yes, because right now, Barack Obama has gone around saying, you know, Don‘t worry, this is not like 1994, when Bill Clinton‘s Democrats got clobbered, because, he‘s saying, I‘m not Bill Clinton, I‘m Barack Obama.

MATTHEWS:  Yes, by the way, he said it to Congressman Berry...

(CROSSTALK)

MATTHEWS:  ... quote right now.  He said, according to Congressman Berry, who‘s quitting now, and he said this to “The Arkansas Gazette,” he said, Well, the big difference here than in ‘94 is that you‘ve got me.

FINEMAN:  Yes.

MATTHEWS:  That didn‘t sound...

FINEMAN:  That‘s the sell right now.

MATTHEWS:  That didn‘t seem to sell Berry too much.

FINEMAN:  And also...

MATTHEWS:  In other words, he quit after the confirmation, the condolence.  Don‘t worry, you can‘t lose because I‘m the president.

FINEMAN:  The problem being than rather than bestow his outsiderhood and his populism on the Democrats inside the Beltway, Barack Obama took on the coloration of the insiders inside the Beltway.

MATTHEWS:  Yes.

FINEMAN:  So he can‘t offer them much lift as the outsider because he spent the last year playing the inside game on health care and other things.  That‘s the big part of his problem in terms of helping these people in an anti-incumbent period.  The way Obama has conducted his presidency doesn‘t help them make the outside argument, the populist argument, against corporate America, against Wall Street...

TODD:  Right.

FINEMAN:  ... or against government bureaucrats.

MATTHEWS:  It‘s so...

TODD:  And Chris...

MATTHEWS:  What‘s going on today—do you think if you had to measure the concerns of this country right now, without getting into left to right politics—a friend of mine, Pat Sullivan up in Rhode Island, said to me something brilliant this week.  And he worked in politics for years.  He said when people are afraid—and they‘ve got almost a 13 percent jobless rate in Rhode Island right now—when they‘re afraid—he was trying to explain the big victory of Scott Brown.  When people get afraid of anything, they get angry at the person who‘s making them afraid and they find that person and vote against them, think against them, root against them.

He explained to me that‘s why people are mad at Obama.  They have to be mad—they‘re scared, mainly scared.  That‘s the impulse people have today.  And when you get scared—I know this feeling—you get angry at the person you‘re scared of.  Your thoughts?  Is that the mood right now?

TODD:  Well, I think that is fair.  I think this anxiety—this isn‘t about people concerned about jobs, it‘s this anxiety that‘s both short-term and long-term, right?  It‘s short-term anxiety because they feel like they don‘t have job security if they‘re in their job or if they can‘t find one or they can‘t find a good job, particularly if they‘re on that—they‘re on that non-measured unemployment figure, right, where they‘re not an employee but they‘re struggling to find work and they‘re sort of past their benefit.

MATTHEWS:  Yes.

TODD:  But then there‘s the long-term anxiety, Chris.  It‘s a question we continue to ask in the NBC/”Wall Street Journal” poll.  When you find out—when you ask people, Are your children going to have a better life than you, and we have majorities saying no.

MATTHEWS:  Yes.

TODD:  So it‘s both short-term and long-term anxiety, and I think it (INAUDIBLE) report (ph).  But I want to make one more point on the Biden thing.  The problem that Democrats have right now politically in this White House is that they‘re getting a self-fulfilling prophecy here, right, which is Democrats are running scared, so a bunch of them are making decisions not to run, try to retire, or not to do a seat.  And so you‘ve got the president sitting there, going, Hey, you know what?  You don‘t know that this is what the environment‘s going to look like in November.  You‘ve got to be patient.  You got to give me a chance.

But now a Beau Biden says he‘s not going to run.  So when the president makes that call, what does Congressman X say back to him?  Well, hey, you couldn‘t get a Biden to run in Delaware.  How are you going to...

(CROSSTALK)

TODD:  That‘s what makes it so difficult.

FINEMAN:  I think whatever his reasoning was on the inside—it might be perfectly legitimate, about waiting for four years, about the big case, when the son of the vice president decides not to take what could easily be a fairly easily obtained seat...

MATTHEWS:  Yes.

FINEMAN:  ... we thought, in Delaware, that‘s sending a message to every other Democrat out there.

MATTHEWS:  Yes.  I don‘t think it‘s going to help or hurt either party for me to say right now I think he made the right call, OK?  I think he did.  Thank you, Chuck Todd.  Thank you, Howard Fineman—because I think he has a future.

On Wednesday night at 9:00 Eastern, watch President Obama‘s State of the Union address right here on MSNBC.  It‘s a great place to watch.  You get a lot of context when you watch on MSNBC you don‘t get elsewhere, a lot of excitement in our coverage.  And stay with us all night for reaction and analysis from everybody, from Keith, Rachel and the rest of us.

Coming up: Democratic congressman Bill Pascrell of New Jersey.  He says that when fellow Democrats say the public will get behind health care as soon as they understand it, quote—these are his words—“That is not only arrogant, it‘s BS.”  We‘ll hear—perhaps he‘ll say it that—very much that same way when he comes here in a minute.  That‘s Congressman Pascrell of New Jersey joining us next on HARDBALL.

You‘re watching it, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Here‘s what Democratic congressman Bill Pascrell of New Jersey said about the Democratic approach to selling health care reform.  Quote, “We are arrogant when we say, Well, as soon as the public understands what we‘re doing, they‘ll like it.  That is not only arrogant, it‘s BS.”

U.S. Congressman Pascrell joins us right now.  Sir, do you want to reiterate in perhaps more illustrative language, perhaps pretty prettier language?  But you make your point, but do it again.  What is it?

REP. BILL PASCRELL (D), NEW JERSEY:  Well, the point of the matter is that we made it too cumbersome.  We‘re talking many good ideas here, Chris.  There‘s no question about it.  We cannot continue to do what we‘re doing, whether we‘re talking about what goes on in our hospitals or what goes on in health care in general.  We can‘t afford it, first of all.  And second of all, it‘s not making us healthier.  And I think that‘s the main thing.

So we made too many things available in this particular piece of legislation, and it confused and created more anxiety.  The American people have enough anxiety right now, and we probably made it too large.  I still believe in health care reform, but this isn‘t the ticket.  And as my buddy from the New York, Tony Weiner, said, you‘re whistling past a cemetery if you think we‘re going to resurrect the same tool.

MATTHEWS:  Well, let me ask you about a simple question nobody ever asks on this show.  Let‘s talk average people.  I grew up in northeast Philly, north Philly for a while.  I know what average people mean.  You represent an average group of people up there in northern New Jersey.

PASCRELL:  Right.

MATTHEWS:  What do average people who have a job and are worried about losing it—what do average people want from health care right now they don‘t have?  Or would they rather they had nothing?

PASCRELL:  They want affordability.

MATTHEWS:  Would they rather the president just stayed away from it?

PASCRELL:  They want affordability, Chris, first of all, because those that have insurance see their premiums continue to rise.  We have not guaranteed that those premiums really would be—we‘d cut them off and stop the increase.  We haven‘t really guaranteed that we‘d minimize the increase in those premiums because we weren‘t able to take on the insurance companies.  They still maintain the exception, the exemption from the antitrust laws.  There‘s only, as you know, two groups that do...

MATTHEWS:  Yes.

PASCRELL:  ... those and the baseball players.

MATTHEWS:  Baseball.

PASCRELL:  And I think that that‘s not acceptable to the American people.  And it only falls into what you‘ve talked about many, many times, of how we perceive the big guys get away with things and the average guy doesn‘t.

MATTHEWS:  Yes.

PASCRELL:  And the average guy simply doesn‘t want to get away with things, but he wants at least to not make it more difficult for him to live day to day.

MATTHEWS:  Well, nobody wants to be a chump.

PASCRELL:  Right.

MATTHEWS:  And nobody wants to be working every day, coming home tired, barely able to watch television at night and wondering why they‘re working so hard, when it seems like somebody‘s got some scam going, and some of them are politicians.  So here‘s the question.  Are we better off with nothing than what‘s on the table right now?

PASCRELL:  No, I don‘t believe—well, whether...

MATTHEWS:  That‘s a tough call, isn‘t it.

PASCRELL:  ... we‘re talking about the Senate bill—we‘re not going to pass the Senate bill. 

That‘s—that‘s not going to go anyplace in the House. 

MATTHEWS:  So, we‘re better off without nothing than the—so, we‘re better off without that?

PASCRELL:  And the Senate—and the Senate bill—what I think we need to do is what the president suggested.  Step back.  Take a breather.  I would have done this back before Thanksgiving, though, Chris.  I think that‘s when it was inevitable that we were heading for a collision course, before Massachusetts, you know, just after New Jersey. 

MATTHEWS:  Yes.  Well, that‘s looking backwards. 

PASCRELL:  The handwriting was—was on the wall. 

MATTHEWS:  OK. 

PASCRELL:  And to be arrogant and not accept the dictates of those couple of elections, it‘s not the end of the world, by any stretch.  There are more Republicans retiring than Democrats. 

But, again, if you indicate that you‘re not affected by these elections, there‘s something wrong in the process, and we‘re not responding to what the people‘s feelings are. 

MATTHEWS:  OK. 

(CROSSTALK)

MATTHEWS:  How come there‘s no deal-making?  I like deal-making.  Most people don‘t like the smell of it, but I love it.  It‘s construction, to be the smell of construction, when you‘re having deals made. 

Why can‘t you find 20 or 30 Republicans, like Reagan was able to find 30 or 40 Democrats, and cut a deal on health care?  Aren‘t there enough Republicans out there that want to do something about preexisting conditions...

PASCRELL:  Well...

MATTHEWS:  ... about allowing people to take their insurance with them when they change jobs, the things that most middle-class people want?  Why don‘t Republicans want those middle-class things, and why can‘t you do them together? 

PASCRELL:  Well, there are some things that I think both sides would agree on.  Of course, you know, preconditions, I mean, or...

MATTHEWS:  Well, why don‘t you do it? 

PASCRELL:  ... getting—or getting—well, I have suggested that we divide this into segments. 

MATTHEWS:  Oh.

PASCRELL:  We deal with the reforms first.  We deal with the antitrust second.  And then we even deal with liabilities, Chris.  There‘s no way to get around that problem.  We have got to address it.  We have got to come up with...

MATTHEWS:  I am with you.  I am with you.  I—that is a great idea.  Do the preexisting, the reform stuff.  Then do the antitrust stuff, so you have more competition.

PASCRELL:  Right. 

MATTHEWS:  And then go deal with the trial lawyers later. 

PASCRELL:  That‘s what I would recommend. 

MATTHEWS:  But, first of all, the administration ain‘t going to trust the trial lawyers, because they‘re in bed with them.  These Democrats—most Democrats, maybe not you, are in bed with the trial lawyers, the trial bench.  They will not challenge them.  They will not go after these—these deals, this amount of money you can make against doctors, and the fact we don‘t even specialists in a lot of areas like Pennsylvania. 

Do you think they will actually do something you‘re proposing? 

PASCRELL:  Yes.  And I think that liabilities issues are blown out of proportion by both sides of the argument.  There is no question in my mind we need to deal with it if we‘re going to deal with health care reform. 

And, second of all, the trial lawyers aren‘t all wrong, because, in many of the states where they have had caps on these settlements, you know as well as I, there‘s been no freezing of the premium increase.  Now, if you were to guarantee me that we are going to freeze premiums...

MATTHEWS:  That‘s a good deal.

PASCRELL:  ... I would absolutely go for...

MATTHEWS:  Well, let‘s make that deal.

PASCRELL:  ... liability reform right now, tomorrow morning. 

MATTHEWS:  There‘s a great deal.  Get the insurance companies to cut premiums if you agree to put caps on these deals, these findings by juries. 

(CROSSTALK)

PASCRELL:  Yes.  Yes.  And it‘s been tried.  In part of the Texas reform, it has worked, but no other state have they really frozen premiums...

MATTHEWS:  OK. 

PASCRELL:  ... in doing what you and I are talking about right now. 

MATTHEWS:  OK.  Give us some hope.

Is there going to be some kind of reform this year that‘s agreeable to both sides?  Will they do this piecemeal and do something on portability, on preexisting conditions?  Let‘s start with that first chunk. 

PASCRELL:  Yes. 

MATTHEWS:  Is it going to happen? 

PASCRELL:  I really believe that it can happen.  And I believe that the president should try again to reach out to the other side. 

I know what he tried to do in the beginning.  And Mr. Boehner, who is the leader of the Republicans in the House, he chose the path of saying, nah, our party is not going to support any of this. 

And it really puts the pressure on anybody on the other side who wants to think of some good ideas.  Republicans had great ideas. 

MATTHEWS:  I would love to see them.

PASCRELL:  We had some bipartisan meetings.  And I liked some of their ideas.  And I liked some of our ideas.

MATTHEWS:  I think it would be a great...

(CROSSTALK)

MATTHEWS:  Make the Republicans vote against a reform like preexisting conditions. 

PASCRELL:  That‘s correct.  I would like to see that.  Expose...

(CROSSTALK)

MATTHEWS:  That would be great.  Number two, how about going with them on getting rid of the antitrust, getting—letting—letting states, let insurance companies compete across state lines, so you have real competition across...

PASCRELL:  Well, why don‘t we make a deal between that and the liability situation?  You can‘t have it all one way. 

MATTHEWS:  Yes. 

PASCRELL:  Let‘s come up with language that we can both accept.  I don‘t think that‘s so ridiculous. 

(CROSSTALK)

MATTHEWS:  Well, why are we having this conversation here, and they don‘t have it between—between John Boehner and Nancy Pelosi? 

PASCRELL:  You will have to ask them. 

MATTHEWS:  Are you parties still locked—are they both locked into their interest groups, where they can‘t cut deals anymore, which is what politicians are supposed to do? 

PASCRELL:  That‘s part of the—and that‘s part of the problem, because when the president started off talking to some of the entities that are involved here, I think he sent a message, because we were trying to get away from that kind of thing. 

You like the deal-making.  I don‘t know if that‘s deal-making or simply casting a die on what‘s going to happen in the future.  There‘s a good side of it and there‘s a bad side of it. 

MATTHEWS:  Well...

PASCRELL:  I don‘t think good came out of that, by the way.    

MATTHEWS:  Well, if everybody likes the idea of compromise across the aisles, where you actually get something done, instead of more talk about it, on programs like this...

PASCRELL:  I‘m going to fight for it, Chris. 

MATTHEWS:  ... write U.S. Congressman Bill Pascrell—P-A-S-C-R-E-L-

L, P-A-S-C-R-E-L-L. 

PASCRELL:  Thank you. 

MATTHEWS:  That‘s United States House of Representatives, Washington, D.C., 20515.  You can‘t miss it -- 20515.  Actually writing a letter would be kind of old-school, but it would work.  How about writing a letter to this congressman saying, let‘s get a compromise?

Thank you, sir. 

PASCRELL:  God bless.

MATTHEWS:  And I appreciate you coming on HARDBALL tonight.

PASCRELL:  Honor to be with you.

MATTHEWS:  Up next:  Senator Jim DeMint famously said Republicans could make health care reform President Obama‘s Waterloo, like, you know, Napoleon loses finally?  Now he says he didn‘t mean it.  Well, you be the judge.  Thank God there‘s such a thing as videotape.  That‘s in the “Sideshow.”

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Wow.  It‘s time for the “Sideshow.”  Let‘s go.

First up: amending the record. 

This summer, Republican Senator Jim DeMint famously led the charge against President Obama‘s health care push with this. 

(BEGIN AUDIO CLIP)

SEN. JIM DEMINT ®, SOUTH CAROLINA:  If we‘re able to stop Obama on this, it will be his Waterloo.  It will break him. 

(END AUDIO CLIP)

MATTHEWS:  Well, you heard it, “Waterloo.”

Now, catch Senator DeMint yesterday on ABC‘s “This Week” singing an entirely different tune. 

(BEGIN VIDEO CLIP, “THIS WEEK WITH GEORGE STEPHANOPOULOS”)        

TERRY MORAN, HOST:  Did you break him?  And is that really how Americans want you to behave here in Washington?  Break the president? 

DEMINT:  I didn‘t want this—this to be the president‘s Waterloo.  But pushing through a massive government takeover of our health care system was certainly not a good idea. 

(END VIDEO CLIP)

MATTHEWS:  Well, he chuckles when he says it because he did want it to be his Waterloo.  If this Congress and this president fail to address the health care problems, millions uncovered, many millions more denied health care security because of preexisting conditions or job insecurity, I personally blame those in the center who refuse to demand a centrist solution, if the politicians between the 40-yard lines—and that‘s where most Americans are, between the 40-yard lines, politically—refuse to govern, and they leave it to the polar opposites to fight and fail, and then blame each other, as they always do.  They always blame the other side. 

Along those lines, Democratic Congresswoman Carol Shea-Porter vented her frustration at a town hall this weekend.  Let‘s listen. 

(BEGIN VIDEO CLIP)

REP. CAROL SHEA-PORTER (D), NEW HAMPSHIRE:  We go to the ladies room, the Republican women and the Democratic women, and we just roll our eyes at what‘s being said out there.  And the Republican women said when we were fighting over the health care bill, if we sent the men home, we could get this done this weekend. 

(LAUGHTER)

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

MATTHEWS:  Well, maybe it was testosterone.  Anyway, it sort of makes my point. 

So, why don‘t the Democratic and Republican women speak out for a deal.?  Why do they let the left and the right say there‘s something dirty about compromise?  Our Constitution, ladies and gentlemen, is built on compromise. 

Finally, on Friday, which is always a wild day around here, we brought you a mischievous exchange between Senator Arlen Specter of Pennsylvania and Minnesota Congresswoman Michele Bachmann, in which he told her to—quote—“act like a lady,” after she kept jumping on his words.

Well, yesterday, the senator called the congresswoman from Minnesota to apologize. 

I‘m on Arlen‘s side on this one in terms of who was interrupting whom.  But the “act like a lady line” was so outdated, it was outdated as Senator Reid‘s comment was about Barack Obama.  Remember that, a few days ago?  Well, let‘s keep our political dictionaries up to date, guys. 

Now for the “Number.”  How is President Obama doing?  Well, what you see depends on where you stand.  According to the Gallup poll, the president‘s average approval rating—that‘s job approval—among Democrats is 88 percent, sky-high.  Eighty-eight percent of Democrats like the job he‘s doing. 

Among Republicans, it‘s just 23 percent, which makes for a difference of 65 percentage points, the biggest gap in history for a first-year president, beating out the previous record held by Bill Clinton.  He had a 52-point gap between Democratic support and Republican support.

There‘s a lot of ideas out there about what this is about.  And we‘re going to keep arguing about what they are.  Why is there such a gap between the appreciation of President Obama by Democrats and the unappreciation of him by Republicans?  A 65-point difference between the parties over President Obama‘s performance so far—tonight‘s huge number. 

Up next:  How should the White House regroup after its worst week?  Should the president, Obama, should the president move left or tack to the center?  We will look at what it will take to get things back on track at the White House.  It should be a great half-hour coming up. 

You‘re watching it, HARDBALL, on MSNBC.  

(COMMERCIAL BREAK)

HAMPTON PEARSON, CNBC CORRESPONDENT:  I‘m Hampton Pearson with your CNBC “Market Wrap.”

Stocks advancing today, as investors scooped up bargains created by last week‘s big decline, the Dow Jones industrials adding nearly 24 points, the S&P 500 up five points, and the Nasdaq climbing 5 ½.

The indexes dipping around midday on a surprise drop in existing home sales.  The 16.7 percent decline is the fastest on record.  Analysts blame it on a fading boost from the popular first-time homebuyer‘s tax credit.  Investors are feeling better about Fed Chairman Ben Bernanke‘s prospects for a second term.  A vote is expected later this week. 

Two big-name techs posting earnings just after the closing bell, Apple reporting its most profitable quarter ever.  Over the holidays, revenue also hitting an all-time high, up 32 percent, Apple shares bouncing around after-hours, after finishing the regular session more than 2 percent higher. 

But Texas Instruments shares moving lower after the bell, despite reporting a big jump from sales and profits. 

That‘s it from CNBC, first in business worldwide—now back to

HARDBALL. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  And that‘s how Joe and I measure progress, not by how the markets are doing, but by how the American people are doing.  It‘s about whether they see some progress in their own lives.  So, we‘re going to keep fighting to rebuild our economy, so that hard work is once again rewarded, wages and incomes are once again rising, and the middle class is once again growing. 

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

The White House is clearly hitting the reset button this week, but which way now? 

Peter Beinart writes for The Daily Beast, and Chris Cillizza writes for “The Washington Post.”

I want Chris to handle this thing right at the bat.

You first, then Peter. 

How does the president regain control of public thinking, maybe not to agree with him, but to grab on to public—so he‘s not the other guy anymore; he‘s with the people?  How does he reconnect, before he does anything else this Wednesday night? 

CHRIS CILLIZZA, “THE WASHINGTON POST”:  Well, you know, I—you know, Chris, I think the White House is trying to point to the State of the Union as the big moment. 

Look, the reality is, on a day-to-day basis, most average Americans are not tuned in to what the president is saying.  They will pay attention at State of the Union.  He‘s previewed it.  He‘s going to talk like a populist.  You heard him say fight and middle-class families.  You‘re going to hear a lot more of that. 

The question is, can he sell it? Remember, Barack Obama, I think, one of his great strengths, frankly, in the 2008 campaign was, he didn‘t pretend as though he was a populist.  You had John Edwards running as a populist...

MATTHEWS:  Yes. 

CILLIZZA:  ... Hillary Clinton towards the end of the race running as a populist.

He didn‘t run like that.  It‘s not a natural fit for him.  It‘s clearly the direction they‘re moving in.  But, again, I don‘t know if he can sell it.  And that‘s critically important to convincing the American people.  The American people get when someone‘s being inauthentic.  It‘s, frankly, why they elected Barack Obama in the first place, because they thought he was who he said he was.

MATTHEWS:  That‘s the question to you, Peter.

Can he sell himself as the guy who doesn‘t like the way things are done in this country?  Because that‘s what a populist is.  You have to challenge the whole way things are done.  You got to go against institutions, banks, government, politicians.  You have to have this whole, I‘m an outsider, you‘re no good, you‘re the insider. 

Is he authentic in that regard? 

PETER BEINART, THEDAILYBEAST.COM:  He can try.  But I think, ultimately—look, ultimately, if unemployment is 10 percent, the guys who are running everything—and the Democrats are running everything—are going to be unpopular. 

MATTHEWS:  Yes. 

BEINART:  People are angry.  There‘s nobody else to take it out against. 

They don‘t like the Republicans, but the Democrats are running everything.  The thing that‘s going to save Barack Obama, ultimately, is the recovery of this economy on Main Street. 

MATTHEWS:  It‘s three years.

BEINART:  By 2012 -- just like Ronald Reagan...

(CROSSTALK)

MATTHEWS:  So, he‘s just going to weather it? 

BEINART:  Look, you can do things at the margins to staunch the losses.  But what saved Ronald Reagan, who got shellacked in 1982?  The recovery of the economy in 1984. 

MATTHEWS:  Yes, I had something—I had a small in part.  And I have to tell you, 26 seats was nothing compared to what I think...

BEINART:  Well...

MATTHEWS:  I think they‘re facing bigger losses than Reagan lost in ‘82, right, Chris? 

CILLIZZA:  You know, Chris, I don‘t disagree with what Peter said. 

The problem is, is that timetable might well work in terms of the economy recovering for—for President Obama‘s reelection.  But it‘s not likely to work in a drastic way before November.  Even the most sort of rosy economists don‘t predict unemployment dropping significantly before then. 

And I think that‘s—you‘re starting to see some unrest, Senate and congressional Democrats, some who are retiring, some who are thinking about it, unhappy.  They believe President that Obama created this political environment that they then have to run in.  Meanwhile, he‘s focused on 2012 and positioning himself for there. 

It‘s an uncomfortable feeling for many of these people.  I will give you an example.  Marion Berry in Arkansas retired today.  He—he offered a very candid interview to “The Arkansas Democrat-Gazette,” in which he said that Obama compared this to 1994, but said it‘s not the same because you‘ve got me.  Well, that‘s not going to sit well with too many House Democrats.  I think it shows the level of unrest and anxiety that exists. 

They‘re looking for someone to blame.  And guess what, the White House is the most obvious. 

MATTHEWS:  I don‘t think the president and the American people are Sonny and Cher this year, do you?  “I got you, babe,” I‘m not sure that‘s the key here.  Let me ask you about this whole problem of blame game.  It seems to me that coming out of Massachusetts, everybody‘s going to blame Obama for everything.  Debt, deficit, unemployment, the works, right?  Is he guilty of any of that? 

In other words, if he had come in as anything more than a pragmatic politician, dealing with unemployment by spending more money and accepting a higher deficit—if he hadn‘t tried to deal with the financial situation and continued the work of Bush, if he hadn‘t tried to save the big auto companies, if he hadn‘t tried to do what he‘s done in terms of stimulus, would anything be better off? I mean, has he had anything to do with the economy, the way it is now?

BEINART:  No, I think the economy would be worse had they not done all of these things.  The problem is, it‘s a theoretical war.  It‘s not a real war.  It‘s not like Franklin Roosevelt coming in, unemployment 25 percent and by 1936 it‘s 13 percent.  He‘s saying, a lot of economists believe it would have gotten worse.  But unemployment is higher. 

MATTHEWS:  Let me go to Chris.  Chris, how do you sell the fact it would be 25 or worse, if I‘m not running the show?  It‘s 10, but it could have been a lot worse.  He‘s never really pushed that button and said, if it weren‘t for me, the leak in the dike would have been a break in the dike. 

CILLIZZA:  You know, Chris, the word they have used to broadly capture that—he always uses the word necessary, necessity, that we did this out of necessity.  I didn‘t want to take over the auto industry.  I didn‘t want to do what I had to do in the financial services industry.  We had to do those things. 

The sale isn‘t working at this point.  That‘s why I think with health care, you see a lot of Democrats jumping off the ship, because they say, well, these assurances, all we have to do is pass something and we‘ll sell it to the American people, well, what was the previous nine months is what they say?  It‘s not selling. 

For whatever reason, he‘s having trouble selling his messaging.  I think that‘s part of the reason they brought David Plouffe back in, campaign manger, someone to do long-term strategic messaging that this White House has struggled with. 

MATTHEWS:  Are they going to fire anybody, Peter Beinart? 

BEINART:  It looks like the Plouffe thing, it seems to me, an answer to not doing that, a way of giving the media—a way of saying, we‘re turning the page without throwing anyone overboard? 

MATTHEWS:  Chris, do you here anything like that?  Is anybody getting sacked?  Usually, that‘s what happens when things go badly.

CILLIZZA:  I think that the president and his inner circle are uniquely resistant to bowing to what they view as the Washington media establishment‘s desire for someone to be thrown overboard.  That said, look, David Plouffe has to take responsibilities from somebody.  He doesn‘t just come in and run all these things without somebody losing some of the responsibility.  Who that is yet I don‘t think we know. 

You don‘t just add someone who didn‘t exist, give them a bunch of responsibilities and say everything‘s exactly the same. 

MATTHEWS:  Doesn‘t Washington want a human sacrifice, Peter? 

BEINART:  Absolutely. 

MATTHEWS:  I think the country wants it.  We like human sacrifices.  Take somebody over Niagara Falls alive.  People like that, because then they feel better because they feel somebody‘s paid the price.  If the president doesn‘t fire somebody, then he‘s blamed.  Right?  It‘s cruel, but it‘s true. 

BEINART:  It also makes you look weak. 

MATTHEWS:  Firing somebody? 

BEINART:  Firing somebody if you don‘t believe they‘re really responsible.  I think the Obama administration is much like the Bush administration than the Clinton administration.  The Clinton administration would let people hang out to dry over almost anything.  The Bush administration said we‘re going to batten down the hatches.  Culturally, I think the Obama administration, particularly the Chicago folks, are more like that. 

MATTHEWS:  OK.  I think he made a big mistake coming out on health care.  He never got the country to agree who‘s going to pay for somebody else.  We did that with Social Security.  The young will pay for the old.  We did it with Medicare.  The young will pay for the old‘s health insurance.  There‘s no sense on the part of the American people right now, nor has it been sold to them, that one group should pay for somebody else‘s health care.  Because that hasn‘t happened, every time you hear the word subsidy or mandate, we go crazy.  That‘s why this thing hasn‘t sold. 

Anyway, Peter Beinart, thank you.  Thank you, Chris Cillizza.  

Up next, former Republican Congressman J.D. Hayworth, who is big with the Tea Party—there he is—he‘s quit his job.  He‘s going to run apparently.  He‘s going to primary John McCain out in Arizona.  What a battle royale that‘s going to be right in far right.  Can McCain defend his right flank against J.D. Hayworth with the help of Sarah Palin?  What a fight on the right that‘s going to b in hot weather this summer. 

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back.  Fifteen months after losing the presidential election, John McCain has a new problem on his hands.  Former US congressman and current hard right radio host J.D. Hayworth announced Friday—by the way, he‘s coming on HARDBALL tomorrow—J.D. Hayworth ending his radio show and will soon formally announce a primary campaign against McCain.  He made it official.  Well, he‘s almost made it official.  He quit his job.  That‘s a good way to do it.

Could Tea Party favorite Hayworth beat McCain out in Arizona?  Eugene Robinson is a Pulitzer Prize winning columnist for the “Washington Post,” and of course he‘s also an MSNBC political analyst.  And Susan Page is the Washington bureau chief for “USA Today.”

Gene, it looks to me like we‘re going to have a battle between the far right and the right, between McCain and Hayworth.  McCain is already battening down the hatches, shoring up his position as an enemy of wasteful spending, of earmarks and all that.  Where‘s his weakness? 

EUGENE ROBINSON, “THE WASHINGTON POST”:  Well, he‘s got several weaknesses.  Immigration is a weakness for McCain.  That remains a huge and hot issue in Arizona.  I was out there not long ago and people were still talking about it.  They‘re not talking about it here, but they‘re talking about it out there. 

But you‘re right, he has avoided being bipartisan with Barack Obama, even on issues that you would have thought John McCain might have been willing to talk with the president.  He‘s been circumspect in not doing that.  He‘s been truculent.  He‘s been orthodox. 

MATTHEWS:  He‘s been ticked off. 

ROBINSON:  And he‘s been ticked off. 

MATTHEWS:  He‘s been very curmudgeonly lately?  Don‘t you think, a little bit far to the curmudgeonly side of Any Rooney?  He‘s not happy.  He makes clear he‘s not happy with Barack Obama.  In no way is he the favorite of the media anymore.  We‘re not his base anymore.  He doesn‘t want us to be his base.  Maybe he will again someday.

SUSAN PAGE, “THE USA TODAY”:  You‘ve seen him turn kind of right. 

You saw it with the answer he gave on Bernanke yesterday.  I don‘t know.  If he weren‘t running for re-election, would he have taken quite that stance against Ben Bernanke?  Maybe. 

ROBINSON:  It‘s a funny stance in terms of left-right. 

MATTHEWS:  Blaming the establishment is an easy way to shore up your weakness. 

ROBINSON:  It‘s kind of Tea Party, non-Tea Party. 

MATTHEWS:  OK.  Let‘s talk about the Tea Party people.  Are they going to get out there and have big parties and do what they did for Scott Brown?  I hear Scott Brown is now helping McCain.  

PAGE:  Maybe Sarah Palin will do him some good.  She gives him some credentials. 

(CROSS TALK)

MATTHEWS:  Why is J.D. Hayworth running against him?  We‘re going to ask him here tomorrow on HARDBALL when he comes in.  He‘s pretty good on his feet.

PAGE:  Today he attacked McCain as a moderate and a maverick. 

MATTHEWS:  Moderate?  That‘s cruel.  Is that libelous?

PAGE:  In Arizona, possibly.  You want to be a conservative.

MATTHEWS:  Here‘s what J.D. Hayworth told the “Arizona Daily Star,” quote, “Arizonans have a clear choice, a clear common-sense consistent conservative”—that would be him—“or they can remain with a moderate who calls himself a maverick.” 

This is so interesting.  Now, let‘s face it, it‘s not Arizona that‘s voting on this.  It‘s the Arizona Republican Party, and those people who actually vote in it.  Do we believe, Susan, that that party is so far to the right that they would dump this war hero, John McCain, almost like the heir to Barry Goldwater, and dump him because they want J.D. Hayworth? 

PAGE:  Well, they had a—Rasmussen had a poll last week that had him at 53 percent.  That‘s OK for an incumbent.

MATTHEWS:  What‘s the number?

PAGE:  Fifty three, 53-31.  On the other hand, it‘s not an unsurmountable disadvantage. 

MATTHEWS:  Sort of Specter/Sestak.

PAGE:  Especially if Hayworth can raise some money.  McCain does have a war chest, about five million dollars.  If Hayworth can raise two or three million dollars, he could make, I think, a race of it. 

MATTHEWS:  My latest test of John McCain, his condition, is that he didn‘t raise hell about the Supreme Court decision last week. 

(CROSS TALK)

ROBINSON:  He said, oh well.

PAGE:  There‘s nothing we can do. 

ROBINSON:  There‘s nothing we can do.

MATTHEWS:  But he launched his life on that for years.  He was going to get rid of the abusive campaign spending, campaign financing. 

ROBINSON:  Exactly.  But maybe that stance is not proper in these Tea Party times. 

MATTHEWS:  Is anybody with big money actually going to bet on J.D.

Hayworth knocking out McCain?

PAGE:  There were people.  I think it‘s a little early to know.  I think you want to see how he campaigns.  Hayworth is pretty well known in Arizona from his talk show.  But I don‘t think this is a race that is cooked yet. 

ROBINSON:  The possibility is that a lot of the sentiment is anti-incumbent and it‘s those bums in Washington and that‘s a hook for him. 

MATTHEWS:  It‘s going to be a battle not of likability, I think, but of meanness.  Who is going to look meaner? 

MATTHEWS:  We‘ll be right back with Eugene Robinson and Susan Page to talk about these Democrats that seem to be jumping ship right now.  Beaux Biden is not running.  I think it‘s the smart move this year not to run.  Why do I think it‘s the smart move?  For the same reason he probably thinks it‘s the smart move.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Gene Robinson and Susan Page for more of the politics fix.  There seems to be—let‘s argue about this.  Is there a running from the ship by the Democrats this year, which can be a—can feed on themselves, when people like Beaux Biden, people not running for reelection, Byron Dorgan jumping ship, a lot of these guys saying I‘m not running again, this environment?  Gene? 

ROBINSON:  I think you‘d have to—I don‘t know if it‘s a full scale abandoned ship, but you‘d have to say that the trend—if you‘re a Democrat, you‘re looking at potentially a tough race.  You might think that, well, I‘ll give this year a pass.  Clearly, they think the atmosphere is not good. 

MATTHEWS:  Susan? 

PAGE:  Look at Beaux Biden, for instance, in Delaware.  It would be a tough race this fall against Mike Castle, popular moderate Republican.  He waits four years.  Castle is about 70.  Maybe he figures Castle—in four years, the climate will be better.  Castle will be older.  Maybe he won‘t run for a full term. 

MATTHEWS:  There‘s the march of a driving dream, let‘s sit around and wait for the Republican to retire.  I want to be a Democrat, that‘s a great thing.  Let‘s wait for the other guys to die and then we‘ll have their jobs.  Wow, I really want to work for you.  It‘s kind of desultory to say, we‘re waiting our turn.  Then again, I think it‘s the smart move. 

ROBINSON:  It‘s a good year to be the antis.

MATTHEWS:  Let me fill you guys in.  I‘m going to force you guys to really make a decision here.  No more softie.  This is HARDBALL.  Can the Democrats claim the right to reelection in any office this November if they don‘t get a health care bill through?  If they blow it on health care, if they can‘t pass a bill with 59 senators and a big majority in the House—do they need a bill to face the public?  Gene?  

ROBINSON:  I think they‘re in real trouble if they don‘t get a bill. 

I think they need to get a bill.

MATTHEWS:  In other words, you would go to extreme measures, like reconciliation, whatever it took.

ROBINSON:  Absolutely.

PAGE:  You can‘t pass a bill with these majorities on your signature issue?

MATTHEWS:  You would go to extreme measures, even take the heat?

PAGE:  I think they are the worst of all worlds if they don‘t pass a bill. 

ROBINSON:  I agree. 

PAGE:  They get slammed for having—

(CROSS TALK)

MATTHEWS:  You‘re a straight journalist and can‘t take a position.  But would you say, quoting smart sources, that close observers would say that it makes sense for them to really do something dramatic? 

PAGE:  History tells you that you don‘t want to be in the position of not passing something very—

MATTHEWS:  Even if you have to go to extreme—

PAGE:  You‘re better off passing something politically.  Yes.

MATTHEWS:  So here we have it.  Two smart middle of the road—well, liberal—columnists, insightful national bureau chiefs, think that it‘s smart for the Democrats to go whole hog and break it.

PAGE:  I think Democrats are politically better off if they deliver something.

MATTHEWS:  That‘s what I‘m hearing from inside the Democratic caucus.  There‘s a sense of near hysteria that they‘re going to get down and not have a health care—

ROBINSON:  They‘ve taken the political hit already.

MATTHEWS:  Anyway, Eugene Robinson, thank you.  Susan Page.  Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now, it‘s time for “THE ED SHOW” with Ed Schultz.

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

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