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updated 9/24/2010 5:45:50 PM ET 2010-09-24T21:45:50

Guests: Andrea Mitchell, Chuck Todd, Hampton Pearson, Loretta Sanchez, Wendell Potter, Joan Walsh, Sam Stein, Major Garrett

CHRIS MATTHEWS, HOST:  Why we fight.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews in Washington. 

Leading off tonight: Farewell to arms.  Why are we still in Afghanistan?  Why did President Obama decide to send 30,000 additional troops to Afghanistan?  And does he really believe in this war, or is he simply doing the minimum he thinks is politically necessary, the most that he can politically get away with?

Bob Woodward‘s exclusive and explosive new book, “Obama‘s Wars,” about the internal divisions over the president‘s Afghanistan strategy is sending shockwaves throughout Washington tonight and beginning to answer some of those questions I mentioned.

Here‘s what‘s new.  The president repeatedly pressed his military brass for an exit plan.  He secretly enlisted Joe Biden to push his strategy that would have greatly reduced our role in Afghanistan.  He signed off on an additional 30,000 troops, despite the fact that he, President Obama, was looking for a way out.  And he set a withdrawal deadline so he wouldn‘t lose Democratic Party people.  Woodward‘s book and the intense struggles over the president‘s war plan is our top story tonight.

Plus: How‘s this for outrage?  The top health insurance companies have already found a way to not cover children with pre-existing conditions.  They‘re simply dropping their policies designed exclusively for kids.  Is this a preview of 2014, when coverage is supposed to kick in for everyone under the health care plan?

And are the Democrats doing enough to keep the Tea Party from turning even big blue states red?  A new poll has Republican Carl Paladino, perhaps best known for his racist and pornographic e-mails, within striking distance of Democrat Andrew Cuomo in the race for New York governor.

Also, tired of Washington gridlock?  Then look out.  Nearly two thirds of Republicans don‘t want their political leaders to compromise.  How‘s anything going to get done if people aren‘t even willing to talk to each other?

And “Let Me Finish” tonight with some thoughts on a vital, good anniversary, the day Congress permanently established the U.S. Peace Corps.

Let‘s start with Bob Woodward‘s book.  Andrea Mitchell is NBC News chief foreign affairs correspondent and Chuck Todd is NBC‘s political director and chief White House correspondent.

Let me go to Andrea first.  Andrea, let me read to you quote from the book.  This is something Obama told his aides.  Quote, “I think I have two years with the public on this.  They‘ll stand by us for two years.  That‘s my window.”

That seems to be a statement that politics plays a role in his thinking about how long to keep us in Afghanistan.

ANDREA MITCHELL, NBC CHIEF FOREIGN AFFAIRS CORRESPONDENT:  Well, I think that politics does play a role, but that is a commander-in-chief and a president who is trying to understand what leeway he has.  I think it‘s defensible.  I‘ve talked to Michael Beschloss and others who say that this is someone trying to figure out what is tolerable by the American people.  I think that they can explain this and say that this is exactly what he should be doing.

MATTHEWS:  Well, he‘s saying how much he can get away with in terms of keeping our troops there because his base will depart from him otherwise.  Let me ask you about the positive question.  Are we in there for two years because he believes in what we can do in two years or because he believes that‘s what he has to do to keep the right from attacking him?  Because throughout this—these quotes we‘re getting from this book today, we‘re getting the sense that he really wants to get out.  He wants an exit strategy from Afghanistan.  My question is, why are we even there two years if he wants to get out now?

MITCHELL:  I think that they felt trapped.  From reading this book, they felt trapped with the war in Afghanistan, that they had no option.  And you‘re right that he felt that he had to keep the Lindsey Grahams, the Republican critics, on his side and the military.  This a new president who had no relationship with the military.  And what does come through loud and clear in this book is the distrust and the long knives that were out, the infighting  --

MATTHEWS:  Wow.  You‘re right.

MITCHELL:    -- between the civilian side, the White House aides, the political former campaign aides, and the military brass.

MATTHEWS:  Well, here‘s another quote.  When Senator Lindsey Graham asked the president if his July 2011 withdrawal deadline was firm, the president responded, “I have to say that.  I can‘t let this be a war without end, and I can‘t lose the whole Democratic Party”—again the president admitting  --

MITCHELL:  Right.

MATTHEWS:    -- he had an outside window he couldn‘t continue through.

Let me go back to Chuck Todd at the White House.  Chuck, I was just talking to Andrea about the fact that the president in these quotes in this new book by Bob Woodward, is admitting, basically, he had political concerns, that we couldn‘t stay in the war more than two years or his Democratic base, which was basically dovish  --

CHUCK TODD, NBC POLITICAL DIR./WHITE HOUSE CORRESPONDENT:  Right.

MATTHEWS:    -- would abandon him.  Fair enough.  Andrea points out that that‘s fair enough.  Here‘s the other question.  Was he staying in there at least two years to keep the military happy?  In other words, was this simply a calculation—I have to stay there at least two years to keep the military happy, I have to get out of there within two years to keep my base, my liberal base happy, a pure political decision?

TODD:  No.  Let‘s remember, this was—when these meetings first started, they were called Afpak meetings.  Let‘s not forget the “Pak” portion of this, which is Pakistan.  And I remember at the time—I remember when President Obama was candidate Obama and when he was starting to get intelligence briefings, everything about his focus even then had more to do with, How is this going to affect Pakistan?  So I think—I think the promises that they felt was necessary to make to Pakistan played a pretty big role in this, as well.

But let me go back to a political point on here, Chris, and that is what this means going forward and the fact that how well—how aware the White House is of their problem inside the Democratic Party.  If these mid-term elections are as bad for the Democrats as things look now, the Democrats that will be left in Congress will be the ones that are probably, you know, from the more liberal districts, the more dovish Democrats.  The ones that have been standing by him, giving him more leeway on this, are probably the first guys that lose if this mid-term election goes badly.  So he won‘t even have—he will have even fewer Democrats left in Congress backing him up on anything beyond July 2011.

MATTHEWS:  Well, that seems to be, Andrea and Chuck, what he‘s talking about here in the book, in the Woodward book.  President Obama told both Gates—that‘s the secretary of defense, Robert Gates—and Secretary Clinton, secretary of state, quote, “I‘m not doing 10 years.  I‘m not doing long-term nation building.  I‘m not spending a trillion dollars.”

I guess, Andrea—you‘re the expert on foreign policy.  Why is he doing what he he‘s doing if he doesn‘t think it‘s working?  Because he says “I don‘t believe in nation building.”  Isn‘t that what we‘re trying to do in this short timeframe?

MITCHELL:  It is.  And I think that—I think he really—what you see in the book is that he felt trapped by being in Afghanistan.  He had campaigned against the war in Iraq.  Afghanistan and the commitment there was really the exit strategy from Iraq.  It was clear to the military you couldn‘t do both.  Afghanistan is where they felt, because of the importance of Pakistan, as Chuck correctly points out, and India, as well, the whole region, the war on terror—it made sense, but—strategically it made sense, but it still is not an easy thing to do militarily.  And it‘s very clear that he is aware going in that it‘s not something you can do in a year or two.

And so one would ask, if you have loved ones there, you know, why are we going to be any better off a year or two years or three years from now than we are right now?  And there is no good answer to that.

MATTHEWS:  Well, the president told the chairman of the Joint Chiefs,

Mike Mullen, quote—and General Petraeus and Secretary Gates, quote, “In

2010, we will not be having a conversation about how to do more.  I will

not want to hear, quote, ‘We‘re doing fine, Mr. President, but we‘d better

we‘d be better if we just do more.‘  We‘re not going to be having a conversation about how to change the mission.”

So he‘s basically said—unless, he went on, we‘re talking about how

to draw down faster than anticipated.  So he‘s saying, Chuck, Don‘t give me 

--

TODD:  Right.

MATTHEWS:    -- some trick.

MITCHELL:  Right.

MATTHEWS:  Like, I‘ve been studying the Kennedy administration.  These efforts by the military people to always hook the civilian leader into something that‘s going to drag them into a wider war—he seems to be a student of history, if not instinct here.  He doesn‘t want to be captured by the people who are supposedly taking his orders.

TODD:  That‘s right.  And I think now, you really see that the December review is very likely now to be the—be the first time that we get the—that we start hearing about what the framework of what July 2011 really means.  You know, right now, July 2011 and that deadline means a lot of things to a lot of people.  Everybody seems to take what they want to hear from it, right?  The military guys take from it, Well, it‘s conditions-based.  Some in the president‘s base and in the Democratic Party who don‘t want us to be there very long take it as, Well, at least there is an end date.

I think in December, we‘re now going to get a clearer picture of what July 2011 is.  And frankly, you can just tell from this book the president‘s instinct is that that July 2011 thing is a lot more real than maybe was hinted at  --

MATTHEWS:  Yes.

TODD:    -- when they first rolled it out.

MITCHELL:  But then again  --

MATTHEWS:  Well, Joe Biden—Joe Biden—I want to get to a couple points.  I‘m sorry, Andrea.

MITCHELL:  Sure.

MATTHEWS:  Joe Biden has made that point, this deadline is real.  Here‘s a quote from Joe Biden by in the book.  Now, everybody talks out of school.  I work here.  I know how it works.  You get mad at (INAUDIBLE) There‘s a lot of kibitzing that goes on in any place you work.  You don‘t want to be held to it.  But if Woodward‘s around—Bob Woodward, the author of this book—somebody will quote you and you‘re nailed for life because as long as that other person lives, that book is on their shelf with your quote in it.

Here‘s Joe Biden talking about Richard Holbrooke, the special Afpak envoy.  Quote, “He‘s the most egotistical bastard I‘ve ever met.”  These kinds of quotes, Petraeus referring to David Axelrod, the president‘s spin doctor.  Well, he called him a “complete spin doctor.”  I guess that‘s what you‘re supposed to call a spin doctor!

But a lot of these quotes, are they going to cause trouble politically and in terms of policy, or are they just the usual, as I said, kibitzing, Andrea?

MITCHELL:  Well, I think inside the White House—and we should point

out that what the vice president said about Richard Holbrooke is he‘s the

most egotistical bastard I‘ve ever met, but he‘s probably the right guy for

the job.  So there are extensions and contexts there, when you see the book 

--

MATTHEWS:  Yes.

MITCHELL:    -- that some of the newspaper headlines did not pick up.  But I think it does cause problems and I think it does sort of precede an exit strategy by some people like the national security adviser, Jim Jones.  It‘s very clear that he feels ostracized, that he didn‘t have access to the president.  On the president‘s first European trip  --

MATTHEWS:  Yes.

MITCHELL:    -- the White House aides, he had to go to the president and complain  --

MATTHEWS:  Well, is it true they don‘t like each other?

MITCHELL:    -- that kind of thing  --

MATTHEWS:  Just bottom line here.  I want to ask both of you.  It true that the military guys don‘t trust the White House political people and the other way around?  Your thoughts first, Andrea, on that one.

MITCHELL:  I think that is true.  And I think, in particular, that Jim Jones, a Marine, you know, general, retired Marine general, feels very much at odds with some of the civilians on the national security team and is about to leave.  I think that‘s the next big announcement we‘re going to have from the White House is the shake-up on the foreign policy, national security team  --

MATTHEWS:  Right.

MITCHELL:    -- that mirrors what‘s happened so far on the economic team.

MATTHEWS:  Chuck, are you surprised by the bad blood here inside?

TODD:  You know, the one that really surprised me—you know,

frankly, all the Jim Jones stuff, you‘d been hearing chatter about that for

a long time.  The most surprising thing was the apparent distrust between

the secretary of defense, Gates, and Jim Jones‘s deputy, Tom Donilon, the

fact that there is not a lot of trust there because Tom Donilon is seen as

somebody that is very trusted by the president, could be a replacement for 

--

(CROSSTALK)

MATTHEWS:  I was shocked by that one.  That one surprised me.

TODD:  Yes, it could be  --

MATTHEWS:  Tom Donilon is a great guy, a great  --

(CROSSTALK)

MATTHEWS:  I‘m stunned by this.

TODD:  You know, old Washington hand—old Washington hand.  You know, very quickly, Chris  --

MATTHEWS:  Yes.

TODD:    -- I do think that this book—you see the Steve Ratner book, people leaving the administration—boy, I think you‘re going to start seeing—the next six months, you‘re going to hear a lot of anonymous quotes, a lot more reporting about hand-wringing inside the West Wing because the distrust between staffers now—they see what somebody else said to Woodward, and they‘re going to feel like, Hey, you know what?  I‘ll talk to reporters now.

MATTHEWS:  God, this is like the Cherokee (ph) strip, isn‘t it?  Racing to get the first—the first homestead out there.  Anyway, thank you, Andrea Mitchell.

MITCHELL:  You bet.

MATTHEWS:  Thank you, Chuck Todd.

TODD:  You bet.

MATTHEWS:  Coming up, the outrage story of the day, big health insurance companies say they‘re going to stop selling policies that cover children rather than comply with the new federal health care bill of Barack Obama that bars them from rejecting kids with pre-existing conditions.  How‘s that for a way around good will?  That could leave hundreds of thousands of kids without insurance, and they‘re the ones that need it, the ones with problems.  And the White House and Democratic lawmakers are up in arms.  The question is, can they do anything about it?  We‘re going to find out.  We‘ll get to that next.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Wow.  Great question.  Can Michelle Obama be the closer the Democrats need this year?  The first lady has announced her October campaign schedule.  It‘s nine events over two weeks.  She‘ll campaign for Democratic Senate candidates in Illinois, Colorado, Washington state, Wisconsin and California, plus headline two big DNC fund-raisers, an event for House Speaker Nancy Pelosi, and campaign for three Democratic House members from her home state of Illinois.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  With just six weeks until election day, President Obama spoke from a suburban backyard in Virginia today about some important parts of health care reform that kick in tomorrow.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Number one Paul (ph) already mentioned, the issue of lifetime limits.  That is not going to be the rule anymore after tomorrow.  Number two, pre-existing conditions for children.  Number three, we‘re going to make sure that if young people don‘t have health insurance through their employer that they can stay on their parents‘ health insurance up to the age of 26.  Number four, you‘re going to be able to choose your doctor and not have to go through some network in an emergency situation.

(END VIDEO CLIP)

MATTHEWS:  Well, apparently, that‘s not all true.  Item two, health care coverage for children with pre-existing conditions, has now hit a snag.  Some major health insurance companies have chosen to stop selling children-only policies in states like California, Illinois, Florida and Connecticut.  Is there anything lawmakers can do to fix that snag?

Congresswoman Loretta Sanchez, Democrat of California, joins us from Capitol Hill.  Congresswoman, you know, the biggest selling point to the middle class,  I think it‘s fair to say, not just the working people, working class, if you will, was that pre-existing conditions would still be covered.  Now we find out that children who have them, chronic illnesses, cannot get covered because the insurance companies in your state, for example, have shut down these policies.  What can be done?

REP. LORETTA SANCHEZ (D), CALIFORNIA:  Yes.  What a shame.  It‘s unbelievable that they would actually do that.  It‘s, for example, what they did when they were trying to raise the rates artificially before these laws came in on individual policies.  So once again, we see people trying to get through the loopholes, or really not go to the intent of our law.

Unfortunately, a lot of this is done on a state-by-state basis.  I know that in California, there has been a bill passed up in the legislature that would say if you will not do children-only policies henceforth, then for five years, you would be barred from writing insurance in the state.  And so I don‘t know whether Schwarzenegger, Governor Schwarzenegger, will sign that, but that‘s certainly something that Californians have out there.

And I think the bigger thing is, you know, the address (ph) of yes, we could come back to the Congress and we could try to fix or mend this law in that way.  But you all know that we‘re in the middle of elections, so that‘s not going to get done.  So then what—what—what is the redress?  What is it that we can do?

So obviously, one of those things is, when we do set up these exchanges in three years, we‘re going to get to choose.  We‘re going to have a commission that‘s going to get to choose what policies are put in there.  Certainly, I would call a company that is not writing children‘s insurance a bad faith company, and I would suggest they wouldn‘t be found in that new 30 to 40 million-person market that we will create.

MATTHEWS:  So you could blackball companies, basically, that don‘t provide insurance for children with pre-existing conditions.  You‘re saying you could fix it that way.  Let‘s take a look at some of the facts  --

SANCHEZ:  I think the  --

MATTHEWS:  Let‘s look at the—Congresswoman, let‘s—an estimated 80,000 California children currently without insurance and as many as 500,000 nationwide would be affected by this.  So there‘s a lot of kids out there who have, you know, obviously, serious problems like leukemia and things like that, horrible diseases, won‘t get coverage.

SANCHEZ:  Absolutely.  And the sad thing is that, who ends up paying for that?  Again, it comes back on the taxpayer because that means that these kids then go into Medicaid or some of these programs at the state level, and we end up paying for it.  The taxpayers end up paying for it.  And it‘s unfortunate because we have seen the profit margins of these companies be higher this year than at any other point.

MATTHEWS:  Well, thank you very much, Congresswoman Loretta Sanchez, as always, from California.  Thanks for that update.

SANCHEZ:  Thank you, Chris.

MATTHEWS:  Wendell Potter is an insurance company—insurance industry whistle-blower and former executive at Citgo (sic).  He‘s now a senior fellow on health care at the Center for Media and Democracy. 

OK, Wendell, you are the expert.  You are very well respected on this, so let‘s nail this baby.  Why did Congress, when they passed this bill, not see this coming?  It is a market.  People try to avoid costs they don‘t like.  I can understand why an insurance company doesn‘t want to get nailed with having to insure people who are already sick, knowing that if they can‘t get to insure other people who are not already sick, so they can share the costs.

Didn‘t they see this coming, this need to have shared costs and shared profits, if you will? 

WENDELL POTTER, FORMER VICE PRESIDENT OF CORPORATE COMMUNICATIONS,

CIGNA:  You know, I think some members of Congress probably did, but the law that finally was passed has a lot of loopholes.

And, frankly, this points out why it was so important for us to have had a public option.  The rules of the road in health insurance are really set by big for-profit insurance companies who answer to Wall Street. 

Without the benefit of a public option, these guys will continue to be able to game the system between now and when this bill is fully implemented and even probably beyond that. 

MATTHEWS:  Well, explain that.  I know the case among progressives for a public option is probably a good one.  So, make the case here.  How would the fact if you had an option out there, a public option, that did provide for insurance for individual children with preexisting conditions going into coverage, how would that force a private sector company to match it, or would it? 

POTTER:  Well, it could force it, because what is happening  --

MATTHEWS:  How? 

POTTER:  Well, what is happening here is that some of these companies are getting out of this business, which means that all the companies will ultimately have to do that, because none of them will be able to absorb the risk. 

A public option, if it were in place and it were robust enough and was operating in enough states and had enough members, could make sure that it was setting the rules of the road, making sure that this was the standard.

MATTHEWS:  How does that work?  I guess I‘m getting back to—I know you are the expert, so tell me.  How does having a public option force the ones that are offered—in the private sector do the right thing here? 

POTTER:  Because this is where—again, if it is robust enough, you have to have a—for example, in California, if you had some of the very biggest companies out there who were staying with this, with the children being able to stay in these plans, then the others would stay in there as well.

If there is also some enforcement—and the congresswoman is right—this also needs to be something that is dealt with at the state level as well.  Lawmakers need to make sure that, as they are developing these exchanges, that they can exclude these companies. 

(CROSSTALK)

MATTHEWS:  Well, I would see a problem right down the road there.  If the government put together a public sector option, which could be a very good idea, all the private sector companies would say, great, you guys take care of the sick kids.  We are going to have a pool of kids, a lot of whom are healthy.  So, we‘re going to make some money out there off kids who are not sick, while the government insures all the kids who are. 

Wouldn‘t that happen? 

POTTER:  You would have to make sure that it is set up in such a way that that does not happen. 

(CROSSTALK)

MATTHEWS:  How would you stop that? 

POTTER:  Well, you are talking about adverse selection. 

MATTHEWS:  Yes. 

POTTER:  And it would just have to be set up.  I don‘t think—we didn‘t get that far to see exactly how it would be set up, but I think you actually can do that. 

MATTHEWS:  I think Moynihan figured this out years ago.  The public sector ends up doing stuff that doesn‘t make money, in other words, insuring kids who are sick already, whereas the private sector ends up making money off things that do make money, in other words, insuring healthy people. 

POTTER:  You will actually start—you will continue to see that, because, again, you are being—this industry is led by Wall Street and that is the way it will continue to be. 

They have an obligation to meet the expectations of shareholders, so you are going to see this going forward, unfortunately. 

MATTHEWS:  Let me tell you, we had a big problem.  And you tell me right now how they could have gotten a public option through with a Congress which was recalcitrant even to do what the president pushed them to do. 

POTTER:  You couldn‘t have done it, because the influence of the insurance industry and its allies was so intense, so effective, that it wasn‘t going to happen. 

And, of course, the industry knew that, without a public option, with some of the other things that got in this legislation, that they would be able to find these loopholes and to game the system, as we are seeing they‘re doing. 

(CROSSTALK)

MATTHEWS:  Well, we better put on our seat belts, because it is going to get more right-wing, and more private-sector, and more anti-government, and more anti-public option, and more anti-social policy down the road if this Democratic Congress goes down. 

POTTER:  You‘re absolutely right.

MATTHEWS:  Thank you very much, Wendell Potter.  You are much respected.  Thanks for coming on the show. 

POTTER:  Thank you, Chris. 

MATTHEWS:  Up next:  President Obama and Sarah Palin join forces—well, in fiction at least.  You won‘t believe what a throwback this is when you see the “Sideshow.”  Check out the “Sideshow” coming up next.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

(LAUGHTER)

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

First up: FOX and friends.  Remember when Sharron Angle said she would be sticking to conservative media outlets because she wants the press to—quote—“ask the questions we want to answer”?  Well, it appears the strategy of getting only the news about her that fits her point is paying off. 

“The Las Vegas Sun” posted audio of Angle at a house party earlier this month.  Take a listen. 

(BEGIN AUDIO CLIP)

SHARRON ANGLE ®, NEVADA SENATORIAL CANDIDATE:  I have been criticized for saying that I like to be friends with the press, but here‘s the deal.  When I get a friendly press outlet—not so much the guy that‘s interviewing me—it‘s their audience that I‘m trying to reach. 

So, if I can get on “Rush Limbaugh,” and I can say, “Harry Reid needs $25 million.  I need a million people to send $25 to SharronAngle.com,” the day I was able to say that even—he made $236,000. 

(END AUDIO CLIP)

MATTHEWS:  Pathetic. 

Anyway, more confirmation that Angle‘s interviews are seen by her campaign as advertisements, pure and simple. 

Next:  New Jersey Governor Chris Christie has gotten a lot of attention from conservatives for his big budget cuts this year.  Natural question, will he make the big run for president?  Well, that is what CNBC‘s Carl Quintanilla asked Christie yesterday. 

(BEGIN VIDEO CLIP)

CARL QUINTANILLA, CNBC ANCHOR:  I have to believe you feel that, if you ran for president, you could probably do some good.

GOV. CHRIS CHRISTIE ®, NEW JERSEY:  I just said this to Joe off the air.  I‘m not ready.  I‘m not.

Listen, I think there‘s two things that you have to have to run for president of the United States.  First, you have to have—in your heart, you got want it more than anything else, more than anything else.  I don‘t want it that badly. 

Secondly, you got to believe in your heart that you are ready to walk into the Oval Office and to lead the nation.  And I don‘t feel like I‘m ready.  So, it makes it very easy for me.  I‘m zero for two. 

(LAUGHTER)

CHRISTIE:  So you don‘t do it. 

(END VIDEO CLIP)

MATTHEWS:  Wow.  That‘s smart words from a real New Jersey accent, by the way, as honest as answer as I have heard. 

Anyway, finally:  President Obama and Sarah Palin join forces?  It is a scenario that might only be possible in fiction.  In this case, the “Archie” comic book series, where the two pols get involved in a Riverdale High School election. 

The captions here are priceless.  Obama on the left, Palin on the right, Archie in the middle of the two, says, “Everybody gets along in Riverdale,” and then a panel of them sharing a milkshake.  I love it.  Archie watches Obama and Palin from the background and says: “Wow.  I guess anything‘s possible.”

What a reminder of the good old days, Archie Andrews. 

Time for tonight‘s “Big Number.” 

Overall, Democratic candidates have outraised Republicans this year, so how are conservatives making up the difference?  Well, spending by outside groups.  Consider this.  Liberal groups have spent $3.5 million in key Senate races over the past two months, $3.5 million.  How much have conservatives spent?  Twenty-two million, six times as much.  Conservative groups hold the power of the purse, $22 million and counting from outside forces—tonight‘s could-make-a-difference “Big Number.” 

Up next, we have got the latest polls in some very hot races around the country.  Stay tuned in a minute.  In some cases, Republicans are doing well in states where no one gave them much of a chance.  And in one state, it looks like the Tea Party may have blown it.

The new HARDBALL scoreboard coming up next.  You got to watch in just a minute.  You are watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

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

A modest sell-off breaking a five-day winning streak for the Dow.  It is down 21 points.  The S&P 500 slipping five-and-a-half and the Nasdaq skidding 14 points.  Investors still scratching their heads over Tuesday‘s comes from the Federal Reserve.  Depending on who you ask, the Central Bank said too much or too little.  Either way, economists are looking for a little more clarity from the Fed. 

In stocks, it was the tech sector dragging on the markets today.  Adobe shares plunging 19 percent on a disappointing fourth-quarter forecast, Microsoft moving lower as well.  A 23 percent dividend bump was not as much as shareholders were hoping for.  Newspaper publishers taking a big hit on the slowdown in digital advertising. 

And this Bud‘s for you and it‘s free.  Anheuser-Busch announcing a new marketing campaign.  They will be handing out free Budweisers at bars across America in hopes of turning around a 9 percent drop in sales. 

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

HARDBALL. 

MATTHEWS:  My favorite time, time for the HARDBALL scoreboard, where we check out the hot races around the country to see where we stand tonight.  And we have new numbers on some key Senate races just in time from CNN, “TIME” and Opinion Research. 

We begin in Wisconsin, where Republican Ron Johnson is now over 50 percent.  He leads incumbent Senator Russ Feingold, the Democrat, by six points now 51-45, very few undecided there.

Next to Pennsylvania, where Republican Pat Toomey is holding onto his lead over Joe Sestak, 49-44, only five points now. 

Checking on Colorado, the poll shows Republican Ken Buck, a Tea Partier, leading Senator Michael Bennet 49-44, again, close, five points. 

And in Delaware, Democrat Chris Coons had a not-close-at-all 16-point lead over Republican Christine O‘Donnell, the sorcerer‘s apprentice, Coons up by 55-39. 

And, finally, let‘s go to New York, a shocker.  In a new Quinnipiac poll, Republican Carl Paladino trails Democrat Andrew Cuomo in the New York governor‘s race by only single digits.  Cuomo is up by just six points, 49-43.  Cuomo had led by wide margins, but, in an anti-establishment year, being a Democrat named Cuomo might actually spell trouble, although I‘m not sure.  One caveat:  The poll didn‘t include Republican Rick Lazio, who is also on the ballot as a conservative. 

And, yesterday, we got this number in on West Virginia‘s Senate race, another shocker, where Democratic pollster PPP finds Democratic Governor Joe Manchin trailing—nobody be can beat Manchin—trailing Republican John Raese. 

Wow.  Hot news.  It‘s surprising every night now. 

So, how are two brand-name Democrats like Andrew Cuomo and Joe Manchin in trouble?  Is the Tea Party‘s primary holding strong with just 41 days in the general election in this midterm? 

Joan Walsh is editor in chief of Salon.com.  And Sam Stein covers politics for TheHuffingtonPost.com. 

Joan, it‘s great to have you on, because maybe it is time for a little cheerleading for some good Democrats here.  I don‘t know.  But Andrew Cuomo is clean as a whistle.  He‘s been a spectacular attorney general.  He was great at HUD.  His father was very popular, though he stayed in office too long. 

I don‘t understand why he‘s—how can he be this close to somebody who was a nothing, Paladino? 

JOAN WALSH, EDITOR IN CHIEF, SALON.COM:  I‘m not worried about this one, Chris.  I don‘t think anybody needs to worry about this. 

MATTHEWS:  A negative nothing, I think it‘s fair to say. 

WALSH:  A negative nothing. 

There is a couple of things.  Obviously, the poll left out Lazio.  It may have oversampled Republican voters slightly, not that much.  And I think there is—there is a newness factor.  Look, Lazio was a tired candidate.  Nobody was excited about him.  Paladino seemed, I don‘t know, fresh maybe. 

MATTHEWS:  No, I don‘t think that is the right word. 

WALSH:  The pornographic and racist e-mails are kind of exciting.  I don‘t know.

(CROSSTALK)

MATTHEWS:  Fresh doesn‘t work for me with Paladino.

Your thoughts, though.  It‘s nice to hear you use fresh new words about a guy who doesn‘t meet—I say new rather—in other words, he requires more probing and investigation between now and Election Day is what you mean. 

WALSH:  And he will get it.  And he will get it. 

MATTHEWS:  OK.

Your thoughts, Steve (sic). 

SAM STEIN, THEHUFFINGTONPOST.COM:  Sam.

Well, I think Joan is right on those fronts.  I think there‘s another element to it, sort of a macro-element, which is voters don‘t really like a coronation.  They don‘t like to be told that the election is over before it starts. 

MATTHEWS:  So, they vote for the other guy in the primary? 

STEIN:  Well, no.  They consider other guy.  They dabble with the other guy.

MATTHEWS:  Yes. 

STEIN:  And both these cases, Andrew Cuomo and Joe Manchin, we basically were told that these guys were obvious wins for Democrats. 

MATTHEWS:  OK.  Let‘s go to Manchin.

Manchin is a very popular governor in West Virginia, a coal state, a culturally conservative state, pro-gun, right, culturally conservative in many ways. 

STEIN:  Yes. 

MATTHEWS:  Now, let‘s go to this.  Could it be that a lot of states have historically elected Democrats to run their governments  --

STEIN:  Yes. 

MATTHEWS:    -- but don‘t trust them in Washington? 

(CROSSTALK)

STEIN:  Yes. 

(CROSSTALK)

MATTHEWS:  Could that be Manchin‘s problem? 

STEIN:  And I think that might be the problem.

You look at these polls, and you dig deeper into it, he has a 59 percent approval rating in the state.  That‘s a remarkably high  --

MATTHEWS:  As governor. 

STEIN:  As governor.

MATTHEWS:  So, why not senator? 

STEIN:  So, the question is why—the question that you raise rightly is why does he not translate that into a federal office? 

I don‘t know.  Perhaps you are right that the trend is that people trust you to handle local politics when you are a Democrat, but when they send to you to Washington, they are worried that the spending is out of control and they think you‘re fiscally responsible. 

MATTHEWS:  I understand.

Let‘s go to—there‘s also a lot of hot issues for West Virginia, coal especially.

STEIN:  Oh, exactly.

MATTHEWS:  Here is Christine O‘Donnell on FOX News with Sean Hannity last night.  What—Well, that‘s bringing coal to Newcastle.  Let‘s listen. 

(LAUGHTER)

(BEGIN VIDEO CLIP, “HANNITY”)

CHRISTINE O‘DONNELL ®, DELAWARE SENATORIAL CANDIDATE:  I‘m not going to do any more national media, because this is my focus.  Delaware is my focus.  And the local media is my focus.

And it is frustrating, because I have let the local media know they are my priority, but our phones are ringing off the hook, that they can‘t get to me.  So, this—it has actually become an interference with the campaign. 

(END VIDEO CLIP)

STEIN:  Interference.

MATTHEWS:  Well, there‘s some confusion there, Joan. 

(LAUGHTER)

MATTHEWS:  I‘m stuttering with confusion.  She says she doesn‘t like the national media, and she‘s telling it to Sean Hannity. 

WALSH:  Right. 

MATTHEWS:  What is he? 

WALSH:  I mean  --

MATTHEWS:  Is he Mr. Local Yokel now, all of a sudden? 

WALSH:  Listen, you know, it is insulting to Delaware reporters. 

She‘s not going to like Delaware media any better. 

Sharron Angle tried the strategy.  She doesn‘t really like local Nevada media better.  People are going to ask questions, she‘s an embarrassment.  I don‘t think anybody has to worry about that.

I think, you know, watching our friend Bill Maher say he‘s going to be releasing more of this great stuff from the ‘80s.  And, you know, Chris, I don‘t regret the ‘80s.  She regrets the ‘80s.  She says everybody regrets the ‘80s.  I mean—

MATTHEWS:  What was wrong—I think the ‘80s were about making money and Ronald Reagan and gold rush times.

WALSH:  Right.  The Republicans.

MATTHEWS:  And what was so wild about—young guy, but I say—

(CROSSTALK)

STEIN:  I was born in the ‘80s.

(CROSSTALK)

MATTHEWS:  -- and loopy.  But I think, my hunch, it‘s that she‘s too conservative, the country is getting conservative in many ways this cycle, is the witchcraft stuff.  I think they are a deal breaker.

STEIN:  Sure, I mean, the irony she made her career what was before

now

MATTHEWS:  Talking about witchcraft.

STEIN:  -- talking on national TV.

And, look, Sharron Angle perfected this.  She doesn‘t take any national questions.  And as you pointed out, she raised a ton of money by going on conservative outlets and talking about her Web site.  She raised $236,000 just from going on Rush Limbaugh.

MATTHEWS:  You mean, if O‘Reilly asked her on tomorrow night, she wouldn‘t go?

STEIN:  Of course, she‘ll go.

MATTHEWS:  Now, let‘s take a look at Murkowski.  This is a fascinating race.  Alaska is a small state but it‘s big enough for three candidates.

WALSH:  Right.

MATTHEWS:  Lisa Murkowski running as a write-in candidate which is doable.  It‘s a small state.  Let‘s listen to her strategy on “The Daily Show,” on “THE DAILY RUNDOWN,” actually.

(BEGIN VIDEO CLIP)

SEN. LISA MURKOWSKI ®, ALASKA:  Well, I would just remind by colleagues back there in Washington that what I‘m doing is really all about Alaska.  Eighty-five percent of the people, the electorate, did not participate in selecting the two nominees going forward.  The Democrat, Scott McAdams, a nice guy, but really unelectable; Joe Miller represents some views that here in Alaska most people feel are outside of the mainstream.  I have been asked by thousands of Alaskans to step up, to stay in, to stand up for Alaska and that‘s where I am.

(END VIDEO CLIP)

MATTHEWS:  Joan, am I missing something?  But this strategy didn‘t work for Crist down in Florida, it didn‘t earlier for Arlen Specter.  This escape route that if you can‘t pass muster with the far right—admittedly, a small group of people.

WALSH:  Right.

MATTHEWS:  But if you lose to them, can you go hide in the general and hope to win with Democrats?

WALSH:  I don‘t know.

MATTHEWS:  That‘s what she‘s talking about there.  She‘s trying to poach some votes from McAdams there, it seems like.

WALSH:  It seems like it.  And I don‘t think that‘s going to work.  It‘s just a question of whether Republicans didn‘t know what they were getting.

I mean, come on, this one is so much fun because it‘s a grudge match between Murkowski and Palin.  You know, Palin‘s old campaign manager went to run Murkowski‘s campaign, Palin jumped in for Miller.  You know, let‘s just get the popcorn.

MATTHEWS:  OK.

WALSH:  This is a great one.

MATTHEWS:  Speaking of popcorn, here‘s the part that you don‘t want.  This is the dirty part of life.  This is what we‘re going to do to show to Democratic and middle-of-the-road voters and reasonable Republican voters what your choices are in this election.

Here‘s a Republican candidate running in North Carolina.  It‘s a new ad.  Let‘s listen.  I hate it.  But this is what people are doing.  Let‘s listen.

(BEGIN VIDEO CLIP, POLITICAL AD)

NARRATOR:  After the Muslims conquered Jerusalem and Cordoba and Constantinople, they built victory mosques.  And now, they want to build a mosque by Ground Zero.  Where does Bob Etheridge stand?  He won‘t say, won‘t speak out, won‘t take a stand.

RENEE ELLMERS ®, NORTH CAROLINA CONGRESSIONAL CANDIDATE:  The terrorists haven‘t won.  And we should tell them in plain English—no.  There will never be a mosque at Ground Zero.

I‘m Renee Ellmers and I approve this ad.

(END VIDEO CLIP)

MATTHEWS:  How can you get that low?

STEIN:  It is pretty much the—

MATTHEWS:  It is ethnic politics.  There is no—

STEIN:  Shallow.

MATTHEWS:  It‘s going back to the seventh century of when Mohammed was around and acting like they are coming this way in hoards with flashing scimitars, whirling dervishes, to come and get us now and you got to stop them at the gates in North Carolina.

STEIN:  In that ad, the word terrorist and Muslim are interchangeable.

WALSH:  Absolutely.

STEIN:  That ad is shallow.  It is pathetic.  It is awful.  And, you know, this is what—my theory is that this is what replacing the sort of traditional, cultural, social—

MATTHEWS:  This was used against the Irish, against the Jews, against the blacks.  This is ethnic prejudice.

WALSH:  Right.

MATTHEWS:  It‘s nothing more.  It‘s terrible.  It‘s un-American.

STEIN:  Not to mention that Congress has nothing to do with this issue.

MATTHEWS:  It‘s terrible.  It‘s terrible.  And you must be an idiot who show this stuff to you, a fool.

Thank you, Joan Walsh and thank you, Sam—I‘m serious.  You can be either Republican or Democrat, but voting for that kind of crap—

WALSH:   Right.

MATTHEWS:  Anyway, up next—

WALSH:  Thanks, Chris.

MATTHEWS:  -- is bipartisanship dead?  My very point.  We got that new poll yesterday that said Americans want their leaders to stick to their guns and not compromise.  Well, catch this—Republicans overwhelmingly don‘t want their leaders to compromise.  What am I saying?  What does it mean for the next two years of the Obama presidency?

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  NBC‘s Chuck Todd and Savannah Guthrie are reporting right now that White House Chief of Staff Rahm Emanuel is considering stepping down and could leave his post as early as October.  The most logical time for Emanuel to leave would be right after Congress recess but before the November midterms.  Emanuel has expressed interest, of course, in running for mayor of Chicago next year and have to file nomination papers by November 22nd of this year.

HARDBALL, back after this.

(COMMERCIAL BREAK)

MATTHEWS:  We are back.

Do you want to fight or make a deal?  A new poll finds that more people say fight than deal.  “The National Journal” found that 49 percent of people say they more admire political leaders who stick to their positions without compromise.  Forty-two percent said they admire political figures more who compromise with someone they disagree with.

Among Republicans—no surprise here—it‘s almost two to one in favor of the fighter, 62 to 33 percent, they don‘t want dealers.

We‘re joined now by “National Journal‘s” new congressional correspondent, the much respected Major Garrett.

Major, it‘s great to have you on the show.

MAJOR GARRETT, NATIONAL JOURNAL:  Chris, great to be here.

MATTHEWS:  Are you—are you—well, first of all, the dumb question: are you surprised the country is in a combative, belligerent, bellicose mood and done with compromise?

GARRETT:  No, I‘m not.  And the most surprising number in our poll was 53 percent of independents don‘t want to compromise.

MATTHEWS:  What do you think they mean by compromise?  I mean, every time the Congress says should the tax rate be 16 percent or 14 percent, the logic is, well, how about 15 percent?

GARRETT:  Right.  How about something in between?

MATTHEWS:  You know, we‘re going to fight the war for five years or three years, well, how about four?  I mean, numbers open themselves to negotiation but they don‘t want that negotiation.

GARRETT:  Right.  Look, I‘m a parent.  My children are not of young age, but many parents, when they feel their children are unruly or the situation is out of control—

MATTHEWS:  I‘ve seen you in church and your kids are perfect, I must say.

GARRETT:  They call for a timeout, a timeout.

MATTHEWS:  A timeout.

GARRETT:  And I think one of the things you can find for independents is timeout.  We‘re not sure exactly whether we‘re—whether Obama‘s 100 percent wrong or 100 percent right, but we want to take a breath and we want to take a pause of what‘s going on here.  Obviously, Republicans—

MATTHEWS:  Is the pause button, a bum deal?

GARRETT:  Republicans still like it.  They want—they want to be confrontational.  Independents I think want a timeout.  The other interesting, of course—

MATTHEWS:  What do you mean by—why would an independent vote for combative politicians if they want a time-out?

GARRETT:  Well, what they‘re saying is, in this climate, they know the choice is: if you elect a Republican House—I don‘t think there‘s going to be a Republican Senate—but if you elect a Republican House, you can stop where we are.  Everyone understands if there‘s a Republican House, we‘ve called effectively a time-out on the latter two years of the first time term of the Obama presidency.  And it seems to me that‘s what independents are saying.

MATTHEWS:  So, they want to lock the box and traffic, stop the traffic.

GARRETT:  They want to say, at least now.  Now, of course, the interesting thing is, I talked to a lot of Democrats about these polling data, they don‘t disagree with it entirely.  They‘re a little skeptical of the Social Security numbers which show Republicans and Democrats tied on that issue.  For the first time—

MATTHEWS:  Are they afraid that the Republicans might attempt a radical program?

GARRETT:  Well, Democrats—first of all, what Republicans may do is a secondary importance, because they know they have two months to fight this out.  And so, Democrats are of the opinion—look, that‘s where the numbers are now, this election is not over, though the conventional wisdom in this town is completely lopsidedly, in my opinion, on the side of the Republicans are going to take the House.

These fight—these races have to still be fought out and Democrats are going to fight that fight.  They‘ve got plenty of money, as you‘ve just indicated earlier in the show.  They‘re raising plenty of money.  Elections are conversations.  Elections are choices and Democrats still want to—

MATTHEWS:  OK.

GARRETT:  -- put the argument before the American people and—

MATTHEWS:  Do you think ads matter?  Do you think ads matter?

GARRETT:  I think that some ads matter.

MATTHEWS:  Let‘s take a look at this one.

(CROSSTALK)

GARRETT:  There‘s ad that we‘re going to talk about.

MATTHEWS:  Everyone says this is a good ad.  Here‘s part of a new Republican ad, that‘s a takeoff—of course, remember that one “Morning in America” that Ronald Reagan made everyone feel good about ‘84?  Let‘s listen to this one because it has an opposite purpose.

(BEGIN VIDEO CLIP, POLITICAL AD)

NARRATOR:  There‘s mourning in America.  Today, 15 million men and women won‘t have the opportunity to go to work.  Business is shuttered.  Twenty-nine hundred families will have their homes foreclosed by nightfall.  This afternoon, 6,000 men and women will be married, each of their children to be born with a $30,000 share of the runaway national debt.

(END VIDEO CLIP)

MATTHEWS:  Well, there‘s an upbeat.  But that message is vote “no.”

GARRETT:  That message is vote “no.”  And “Morning in America” for Reagan was for a person and an agenda that had been tested.  It was tested in the ‘82 midterm elections when many Republicans wanted then-President Reagan to back off.  He refused.  So, ‘84 was an answer, not just to his agenda in the ‘80, but to the cat calls he got from his own party to back off.

MATTHEWS:  Yes, he didn‘t, of course, in ‘82.

GARRETT:  So, you—“Morning in America” in ‘84 was part of a continuum.

MATTHEWS:  Were you to see more ads in the next few weeks like that—

(CROSSTALK)

GARRETT:  A White House message that was part of a continuum.  I don‘t think national ads like this that try to captain a mood work necessarily in a midterm congressional election because every candidate has a different message, a different orientation, a different identity in their own district.

(CROSSTALK)

MATTHEWS:  Is it harder to be an incumbent—or harder to become an incumbent Republican?

GARRETT:  Well, it‘s much harder to become an incumbent Democrat, no question about that.  And if this is a close election, let‘s say for example, Democrats hold onto the House narrowly, there will be some of those in the Democratic majority who will have campaigned either agnostic or opposed to a Speaker Pelosi speakership.

(CROSSTALK)

MATTHEWS:  Will people around will vote for a nut case—let me say an accused nut case?

GARRETT:  Your words.

MATTHEWS:  An accused nut case—someone who‘s been very controversial on the ditsy end of things over an incumbent that they just don‘t like—you know which states I‘m talking about.  I won‘t name them so you can give me an honest answer.  If you have to choice between ditsy, probably ditsy because everybody says that she is, and I don‘t like this incumbent—how do you vote?

GARRETT:  Well, if the primaries are an indication, you vote, new and untested and untried.

MATTHEWS:  That‘s right.

GARRETT:  That‘s what the primaries are.

But general elections are a different atmosphere and a different place, and what you vote in a primary, what wins in a primary may only get you 47 or 48 in the general.  That‘s going to be the key test.  And that‘s why Republicans, I believe, must be cautious about the wins they believe are prevailing at their back now because we have a long way to go between now and November 2nd.

MATTHEWS:  I think Meg Whitman is now reaching a point of diminishing returns.

Anyway, thank you, Major Garrett.  It‘s great to have you here. 

Please come back.

When we return, let me finish with some thoughts about the Peace Corps which was permanently authorized by Congress in this day in 1961.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Let me finish tonight with the fact that today, September 22nd, is the anniversary of Congress approving the U.S. Peace corps.

Ask anyone who‘s volunteered and they‘ll tell you, it was the opportunity of their life, the moment they broke out of their world into a larger one, when they came face to face, probably on the other side of the globe, with a very different human experience.

I went to Swaziland as part of the first Peace Corps group in that southern African kingdom.  There were 50 of us and we went into a country with very little experience with Americans.  The relationship was fresh and crisp, hopeful on both sides and grateful, too.

I‘ve kept up with a half dozen guys who went over there with—friends for life.  We shared something out in the African sun, without electricity and television and telephones, out where you lived life with real people, taught what you could, learned much more, found yourself in the close company with people‘s—well, surprisingly, very much like you.  It was when you could experiences I did the afterglow of empire, when you could live in a world bursting with hope, youth and belief, and what is possible when people rule their own lands.

I have one person to thank for the Peace Corps, most of all.  His name is Sergeant Shriver, who put the outfit together, a dreamer, a can-do American, who knew the spirit of our country, our common faith with those young countries in Africa, in Asia and Latin American who came to life in the 1960s.  Sarge Shriver did two things that made the Peace Corps great.  He made it clear that it would be run by volunteers, that they, not the staff back in Washington, would be the front-line troops.  And rule number two: that no one could stay in the Peace Corps for over five years.  It would never become a tired, old organization dominated by the way things used to be.

It was Sarge Shiver, yes, who knew how to build something—and, boy, did he do it.

That‘s HARDBALL for now.  Thanks for being with us.

Right now, it‘s time for “THE ED SHOW” with Ed Schultz.

           

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