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updated 11/15/2010 9:59:29 AM ET 2010-11-15T14:59:29

Guests: Mark Penn, Sen. Kent Conrad, Jeanne Cummings, Todd Harris, Steve

McMahon, Dan Choi, Alex Nicholson

CHRIS MATTHEWS, HOST:  Travelin‘ man.

Let‘s play HARDBALL.

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

Where in the world is Barack Obama?  Last Friday, the same week the president lost control of Congress, he left the country for Asia.  First from India, then from Indonesia, we got pictures of him and the first lady dancing with the local people.  It was all in traditional costume, all very festive.

The question today, Is this any way to treat an American electorate, an angry electorate, to hold a press conference, announce no new changes, then leave town the same day that Speaker Pelosi says she‘s staying?  What‘s the message here, that the message of the voter lies in the inbox at the White House, We‘ll get to it when we get time, We‘ll get to it when we get back in the country?  OK, he had the G-20 meeting, but that was tomorrow.  Why did he leave last Friday, a full week ahead of that meeting?

And what‘s more, it looks like the White House may give in to Republican demands to extend all the Bush era tax cuts, including for the rich, at least temporarily.  How does the president deal with those crosswinds?

Plus, tempestuous Tea Partiers are piping hot to knock off the next crop of Republican senators up for reelection in 2012.  Here‘s the big question.  Can Olympia Snowe and Orrin Hatch avoid the fates of some of their Republican colleagues?  Can they outlive the right?

Also, the majority of those surveyed for the military say gay service members can serve openly without significant risk on the battlefield, and Defense Secretary Robert Gates said he‘d like to see the repeal of “Don‘t ask, don‘t tell” by year‘s end.  So there‘s just one big obstacle to ending “Don‘t ask, don‘t tell,” the Republican Party.

And let me finish with some thoughts about why the government needs to take control of its debt, just as it—well, as our country needs to take control properly of our borders.  Is that asking too much, that they do the basics?

Let‘s start with President Obama over there.  Mark Penn‘s a Democratic strategist and The HuffingtonPost‘s Howard Fineman is an MSNBC political analyst.  We talk a lot about optics, about what seems to be the way people convey.  They‘re tired of listening to the president‘s words, words, words, but how he acts to the voters last Tuesday is important, I think, to the voters.  My surmise—they don‘t like the fact he left town.  Your thoughts, Mark.

MARK PENN, DEMOCRATIC STRATEGIST:  Well, I think it‘s—it‘s perfectly typical after a mid-terms for the president to focus some on international travel and agenda because he‘s obviously had to push that off while he worked on the mid-terms.  So I think it‘s a good thing to take the trip.  The real question people have, and I think he needs some time to think about it, is how is he really going to answer what the voters said on election day?  He hasn‘t really given them a clear answer yet.  It took Bill Clinton months to really formulate that answer.  Don‘t expect things overnight.  Maybe today, with the tax cut discussion—maybe we‘ve begun to see a real answer.

MATTHEWS:  Howard, we‘ll get to that in a minute, but the whole—there was a great comment by one of those Republicans that were in office after the Civil War who said (INAUDIBLE) political boss, sort of like Mark Hanna (ph).  Isn‘t there something we should look like we‘re doing?

(LAUGHTER)

MATTHEWS:  I mean, aren‘t there things that presidents should appear to be doing—shaking up the cabinet, shaking up the White House, doing things that show, I got it.  I got the message.  You‘re upset about the economy.  I‘m going to try to upgrade my effort.  I‘m going to enhance the effort that I‘ve got here to fix the problems.

HOWARD FINEMAN, HUFFINGTONPOST.COM, MSNBC POLITICAL ANALYST:  Well, I spent a good bit of time over at the White House yesterday, and I got the sense that they‘re operating on their own schedule.  I think they‘ve always operated that way.  I think that‘s how they ran the presidential campaign.  They have a certain imperturbability about them.  They‘re going to stick with their schedule.  This was the only chance that the president would have to make a trip like this before things really heated up in the next Congress, and by golly, he was going to go do it.  Meanwhile, around the White House, they‘ve literally taken all the carpets out and they‘re redoing stuff.  But I don‘t...

MATTHEWS:  Oh, that‘ll make us feel better!

FINEMAN:  But I don‘t sense among the people there, who were left behind...

MATTHEWS:  See, you make my point.

FINEMAN:  ... including David Axelrod—

MATTHEWS:  Mark...

FINEMAN:  No, wait!  That they‘re thinking of changing things in any dramatic way.

MATTHEWS:  Well, that‘s my point.  We have elections...

FINEMAN:  They‘re in a defensive posture.

MATTHEWS:  Look, you‘re a political expert.  You‘re a political expert.  It seems to me that elections always accomplish two goals.  They decide who runs the country and they send a message.  The message of the voters this time was, We want change.  Is he going to give it to them, Mark Penn?

PENN:  I think that if he agrees to extend the tax cuts for everybody, that will be a real sign that, A, he‘s going to change, but B, don‘t be fooled by whatever people are thinking or doing in the White House today.  When President Clinton made changes, the White House didn‘t know about it until he was well along in those changes.

MATTHEWS:  But he went around and pushed people like the brains that got him in there, Carville and Begala, to some extent, although (INAUDIBLE) Texas, George Stephanopoulos, and brought in the wonderful Dick Morris.  I mean, he was doing that pretty quickly, wasn‘t he?

PENN:  People didn‘t really know that until sort of...

MATTHEWS:  But wasn‘t he doing it?

PENN:  ... March...

MATTHEWS:  Didn‘t he hit the panic button before we knew about it?

PENN:  (INAUDIBLE) State of the Union.  Look, the real event here is going to be what‘s going to happen between now and the State of the Union?  What‘s going to happen to the tax cuts?  The president‘s going to spend, I think, the holidays thinking, how is he going to respond.  They looked at a truck that has been hitting them and aiming towards the Democrats since the Scott Brown election.  It hit, and now they have to swerve.  They know they have to swerve.  I can‘t believe they don‘t know that.

(CROSSTALK)

MATTHEWS:  ... have to respond in an active way, not just say, yes, we‘ll try (INAUDIBLE) It seems to me that every government that gets rocked like this does a change to show we‘re paying attention.  The voters—I don‘t know how many times I have to say this tonight—the voters are angry.  They want to see you get it.

FINEMAN:  Yes, I think that‘s right.  I can just report to you what the sense that I have is of them.  And they are—I agree with what Mark‘s saying.  They‘re going to take their time.  They‘re going to see what cards the Republicans are going to lay on the table.  And they‘re going to—they‘re in a defensive posture, where they‘re going to cede ground...

MATTHEWS:  OK...

FINEMAN:  ... on various points until they figure out what to do.  And frankly, they haven‘t figured out what the response is going to be yet.  They have not figured it out.  But I do not sense—and Mark may be right, things are going on on the plane in Asia that we don‘t know about—that they‘re going to make wholesale changes.

MATTHEWS:  No big executive...

(CROSSTALK)

MATTHEWS:  No big chief executive coming in like the...

(CROSSTALK)

MATTHEWS:  No chief of staff coming, no heavyweight.

PENN:  We don‘t know.

FINEMAN:  We don‘t know.  But they‘re already looking.  Some of the top people are going to leave in the early spring, go back to plan the reelect.  I get the sense that they‘re eager to get back to Chicago, some of these people, to begin thinking how to run a campaign again because they don‘t know what to do with the Congress yet.  They have...

MATTHEWS:  In other words, they‘d rather not be the incumbent.

FINEMAN:  Yes.  That‘s...

MATTHEWS:  They‘d rather start all over again.

FINEMAN:  Yes.  Exactly.

(CROSSTALK)

MATTHEWS:  Well, they don‘t get that deal.

FINEMAN:  I know.

MATTHEWS:  They‘re running...

(CROSSTALK)

MATTHEWS:  Let‘s take a look at the report today.  Quote, “We have to deal with the world as it is,” Axelrod said, “the world of what it takes to get this done.  There are concerns,” he added, “that Congress will continue to kick the can down the road in the future, like passing temporary extensions for the wealthy time and time again.  But I don‘t want to trade away security for the middle class in order to make that point.”

I read in that what I think you read in that new reporting that the White House is basically saying, If we‘ve got to give tax cuts to the rich to get them to the regular people, we‘ll do it.

FINEMAN:  Yes.  And I think that—I think that David Axelrod, with whom we had a 90-minute interview late yesterday afternoon, was clearly moving the thing a little farther down the road and conceding what most people—not most, but a lot of people in town think is obvious, that because of the political situation in the lame duck Congress and because of the procedural situation, the White House has no choice or doesn‘t want to take the risk of trying to veto a bill...

MATTHEWS:  OK...

FINEMAN:  ... that has the tax cuts for the rich in it.

MATTHEWS:  Let‘s look at David Letterman on the point I started with tonight, this sense that the president‘s not listening, not paying attention.  You say he is in the sense of substance.  He is looking at a tax cut for everybody, to respond, like you say, to show real change...

FINEMAN:  Well, there‘s no choice.

MATTHEWS:  OK.  Well...

FINEMAN:  That‘s not a plan.  That‘s a lack of choice.

MATTHEWS:  Well, it may have the impact of suggesting...

FINEMAN:  Right.

MATTHEWS:  ... moving to the middle.

FINEMAN:  Right.

MATTHEWS:  Here he is, David Letterman last night, taking a chop at the president in his monologue.  Let‘s listen.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST, “LATE SHOW WITH DAVID LETTERMAN”:  President Obama‘s in India right now.  He‘s over there visiting our jobs.

(LAUGHTER, APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  Mark Penn, I think about states like Pennsylvania, Ohio, Indiana, Illinois, Wisconsin that all bit back at the president last Tuesday.  I keep asking myself, Don‘t you think the working guy thinks that‘s not really a chuckle?  The fact is, they do think their jobs have gone overseas because of U.S. policy.

PENN:  That‘s the single toughest job for the president in the next two years.  The devastation politically of Democrats in the Midwest and the South is really where this election‘s going to be.  And that‘s going to be about jobs and how you use trade policy to open markets in the right way to create jobs.  And if he can‘t make that case and do that right, he cannot get reelected.

FINEMAN:  Well, it is true, Chris, that going abroad in this way at this time isn‘t helping him reverse the image that a lot of people have about him that voted against him this time, which is that he just doesn‘t really understand the urgency of the situation of people who‘ve lost their jobs, whose houses...

MATTHEWS:  Yes, he‘s out there getting another Nobel Prize somewhere.

FINEMAN:  And he‘s giving a speech about how we have to understand the rest of the world and all that.  And it plays into that perception that really influenced a lot of independent voters in this election because the polls show that a lot of people thought that he didn‘t have the sense of urgency that they wanted him to have.

MATTHEWS:  And basic economic nationalism.  You know, we watched Pat Buchanan all those years, and we think he‘s a bit of a zealot when he comes out against trade and against any kind of trade.  Where are the voters on that right now?

PENN:  Well, look, right now...

MATTHEWS:  Are they with Pat now?

PENN:  ... the voters are in both directions.  They want to make sure that America‘s is not taken advantage of in the global economy, but they realize America has to be a piece of it.  You see, it‘s a fine line.  Notice the president took trade policy and he pushed it until after the mid-terms.  He thought that would be a more hospitable time to talk trade.  He didn‘t realize it would be maybe a less hospitable time.  So he needs a comprehensive economic strategy, and that means opening markets the right way.  If he can‘t win that, he can‘t...

(CROSSTALK)

FINEMAN:  They sort of pasted the jobs label on this trip...

MATTHEWS:  Yes.

FINEMAN:  ... once they realized the poor timing of it.  I mean, they

suddenly, it became a trip all about jobs, which if they had a ton of jobs to bring back and to crow about, a long, long list of them...

MATTHEWS:  OK...

FINEMAN:  ... that would be different from what (INAUDIBLE)

MATTHEWS:  So what we‘ve got today is it looks like they‘re changing policy on taxes.  It looks like they‘re going to go along with a big tax cut for everybody, or maintaining the lower taxes of Bush.  That‘ll look like a move to the center.  You say that‘s a positive sign of change.

PENN:  Absolutely.

MATTHEWS:  Still open to question whether they‘re going to change the administration itself.  They‘re going to bring new people in or they‘re going to really show the kind of shake-up that Bill Clinton did.  And you said it took how many months for them to show that shake-up?

PENN:  It‘s going to take a few months.

MATTHEWS:  A few months anyway.  I think—State of the Union?

PENN:  Yes.

MATTHEWS:  Thanks.  We‘ve learned a lot today.  Mark Penn, thank you for joining us.  Howard Fineman, we‘re with you on this story.

Coming up: Reining in the national debt.  We‘ve got preliminary recommendations from the two chairmen of the president‘s bipartisan deficit commission, and the pressure groups on both sides are trying to puncture it.  But doesn‘t a tough problem mean tough solutions?  We‘re going to talk to the Senate Budget chairman, Kent Conrad.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Well, here‘s the latest from Alaska, where they‘re into the second day of counting write-in ballots in that Senate race up there.  So far, more than 97 percent of the write-in ballots went to Lisa Murkowski.  Nearly 90 percent of those write-in ballots went unchallenged by Joe Miller‘s campaign.  And only 276 ballots challenged by the Miller campaign were tossed out.  That‘s bad news for the Miller campaign, which trails in the write-in ballots by about 11,000 votes.  The count‘s expected to last three more days.  We‘ll be right back.  Looks like Murkowski is getting reelected up there.  Be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Former Republican senator Alan Simpson and former Clinton White House chief of staff Erskine Bowles, the two chairmen of President Obama‘s bipartisan deficit commission, gave pressure groups on all sides a chance to complain yesterday when they released a draft of recommendations to fix the country‘s fiscal mess.  They made recommendations in big five areas—cut discretionary spending, overhaul the tax code, cut health care costs, cut entitlement spending, including an overhaul of Social Security.  Those are big ideas that will run into big opposition—have already.

Democratic senator Kent Conrad of North Dakota is a member of the commission and chairman of the Senate Budget Committee.  You know, Senator, years and years ago, I worked on the Senate Budget Committee, and all this sounds familiar.  The minute you try to cut the debt, or the deficit in this case, and you have a wide-ranging, balanced program—at least the way I look at it—that hurts everybody, everybody complains.  They don‘t say, Hey, you hit the other guy harder than you did me.  All they complain about their issue.  What‘s going to happen?

SEN. KENT CONRAD (D-ND), DEFICIT COMMISSION MEMBER:  You know, these groups once again have revealed what they care about is themselves.  They don‘t apparently care about the country because we are spending much more than we can afford.  We are borrowing 40 cents of every dollar that we spend.  Clearly, that can‘t continue much longer, and yet their answer is do nothing.  That cannot be the answer.

And what the two chairmen have come forward and have said is, Look, we‘ve got the get the debt and deficits under control.  We got to reduce the projected shortfall by $4 trillion over the next 10 years.  And they have proposed a comprehensive program to do it.  Well, they deserve our support.  You know, we can argue about the specifics.  Hopefully, we‘ll have a chance to improve the package.  But at the end of the day, we need something of this magnitude to get the country back on track.

MATTHEWS:  You know, I hear there are 90-year-old people out there complaining about this requirement that you don‘t get Social Security until 69 in 2050!  In 2050!  This is not an extreme proposal.  And the fact is, if liberals complain, I would point to the fact that this extends the coverage of the payroll tax all the way up to $190,000 a year.  Well, you‘re not going to get benefits up to that level.  You‘re going a lot pay more taxes if you make more money.  It seems—getting rid of the capital gains preference for income taxation—boy, that‘s going to drive business crazy.  It just seems balanced to me.  Does it help that it‘s balanced, or will the liberals complain about liberal programs, the conservatives about business programs?

CONRAD:  You know, I always think it helps if it‘s balanced.  Look, here‘s the situation.  Spending is the highest it has been in 60 years as share of our economy.  Revenue is the lowest it‘s been in 60 years as a share of our economy.  So obviously, you‘ve got to work both sides of the equation.  What the two chairmen came out with was a proposal to do away—one option.  They had three options on revenue.  One was do away with all the tax expenditures.  That will raise over a trillion dollars over the next 10 years.

MATTHEWS:  Those are what we call loopholes.

CONRAD:  Yes.  They dedicate 90 percent of that to lowering income tax rates, a dramatic reduction in income tax rates in exchange for doing away with all the tax preferences, all the tax loopholes, all the tax favoritism that‘s in the system.  Now, you know, I would prefer not to go that far.  I would prefer to retain some of the mortgage deductions, some of the child care credit.  But do need thoroughgoing tax reform to put this country on a more competitive basis going forward and to reduce our deficit.

And they have combined it with major spending cuts.  Seventy-five percent of this plan is spending cuts.  Twenty-five percent is revenue.  And yet we see some of these groups howling.  Well, you can‘t raise any new revenue.

MATTHEWS:  Yes, that‘s Grover Norquist.

CONRAD:  If you can‘t raise any—yes, Grover Norquist, the same old song from him.  Look, he‘s just a special pleader.  All he cares about is a narrow group who finances his efforts.  Apparently, he doesn‘t care about the country, he just cares about a narrow group that finances his efforts.  And look, the left has got the same problem.  They are so focused just on themselves that they forget about our country.  And our country requires us to be bold and brave and to get something done.

MATTHEWS:  Well, H.L. Mencken once said, Never argue with someone whose job depends on not being convinced.  They‘re paid by their people, so they‘re not going to (INAUDIBLE) Let me ask you this, just so the people who are watching right now understand.  Is this going to be like the base closing commission report, where it comes out with a big—if they get the 14 votes of you commission members out of 18 -- if that goes to the president‘s desk, has he committed to backing this deficit reduction effort?  Is he committed?

CONRAD:  No, he‘s not.  And you know, I—that‘s understandable.  He‘s got to see the product first.  This is just the beginning.  This is the proposal of the two chairmen, bipartisan.  But the commission itself has now got to render a judgment.  If we can get 14 of 18 members to agree on a proposal, then it advances.  If we can‘t, it dies.

MATTHEWS:  Do you think it‘ll happen in the next Congress or this Congress?

CONRAD:  It‘s very hard for me to see how it would happen in this Congress, although that was the plan that Senator Gregg and I proposed...

MATTHEWS:  Yes.

CONRAD:  ... when we proposed this commission some three years ago.  But we had, as you recall, one that was enforced by law.  We didn‘t get a supermajority vote in the Senate for that proposal.

MATTHEWS:  Yes. 

CONRAD:  So, the president did the next best thing.  He put it in place by executive order, which means that we don‘t have an assurance of a vote. 

MATTHEWS:  Yes. 

CONRAD:  We have the prospect of getting one, but not the assurance. 

MATTHEWS:  Yes. 

OK.  I wish the guys who were defeated could vote for it as their last good act for the country and leave, but, anyway, just a thought.

Thank you, Senator Kent Conrad of North Dakota, chairman of the Budget Committee.  Thanks for joining us.

We‘re joined now by Politico‘s assistant managing editor, Jeanne Cummings. 

Your thoughts about it.  You have been covering this, like I have, for a while, involved in it.  Do you think there‘s any chance this country can get serious about reducing its debt?  We talk about it.  It‘s up to $14 trillion.  It‘s really going to be all we do is raise money from the taxpayer to pay interest payments.  It‘s almost reached that point, just a transfer payment now from hardworking people to T-bond holders in China. 

Your thoughts. 

JEANNE CUMMINGS, LOBBYING AND MONEY CORRESPONDENT, POLITICO.COM: 

Well, I tell you, Chris, this might be—it‘s possible that there is an opportunity here. 

And—and hear me out, because I know these things usually collapse, and, frankly, the odds still are that this will collapse.  But one of the key messages out of this election is a great deal of concern about the size of government spending and deficit.

And so you have these Tea Party candidates or these very conservative candidates coming to Washington who embrace those concerns and who are under a whole lot of pressure to demonstrate...

MATTHEWS:  Yes. 

CUMMINGS:  ... that they‘re going to do something about it. 

On the other hand, you have a group of—a large group of Democrats in the Senate who are going to be up for reelection in two years who have just seen what happened to their colleagues, especially on this issue. 

And, so, I think there‘s an incentive for Democrats and the president to put some deficit reduction credentials on their resumes as well.  So, it‘s possible we could see some deals smaller than this big package that are worked out, so that both sides can say that they did do something. 

MATTHEWS:  Let‘s take a look at the tax issue, which affects a lot of people directly.  Here it is.  People want their tax cuts.  Here‘s the president last week, the day after the midterms, last Wednesday, eight days ago, talking about what he might do on the tax cut.  Let‘s listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  my goal is to make sure that we don‘t have a huge spike in taxes for middle-class families. 

My goal is to sit down with speaker-elect Boehner and Mitch McConnell, Harry and Nancy some time in the next few weeks and see where we can move forward in a way that, first of all, does no harm, that extends those tax cuts that are very important for middle-class families.

And how that negotiation works itself out, I think it‘s too early to say.

QUESTION:  So you‘re willing to negotiate?

OBAMA:  Absolutely. 

(END VIDEO CLIP)

MATTHEWS:  It seemed to be a key point he was making there, do no

harm.  In other words, his primary goal, it seems to me, Jeanne, is to cut

make sure the middle class don‘t get hit with a higher tax rate come January, even at the expense of letting the rich have the same deal.

               

That‘s the way I read it. 

Then, Howard Fineman has been reporting today that they‘re going forward with Axelrod‘s comments that clearly suggests that they‘re willing to talk about a continuation for everybody‘s tax cuts. 

CUMMINGS:  Well, that‘s definitely the signal that both the president and Axelrod delivered over the last few days.  I think Axelrod was a little more explicit than the president.  His was a subtle signal, and Axelrod‘s wasn‘t. 

And I think what this is, Chris, you and I both know, this is reality politics. 

MATTHEWS:  Yes. 

CUMMINGS:  I mean, what can they really get through in the Senate, when you have moderate to conservative Democrats who are saying that they are not prepared to increase taxes on the wealthy during this economy?  The votes aren‘t there.  And I think that‘s...

MATTHEWS:  And the worst thing that could happen—it seems to be, just try—I want to try this by as the last question.  It seems to me the worst thing that could happen is the Democratic-led Congress this year, this fall, doesn‘t pass the tax cut, that people face higher taxes next January. 

In come the Republican-dominated House and more Republicans in the Senate, like the cavalry coming to save the taxpayer.  They do go ahead and cut taxes for everybody, and the president is forced to sign it.  The Republicans are the big heroes.  The Democrats really look like the bad guys.  That‘s my thought about what they must be afraid of.

Your thoughts. 

CUMMINGS:  I agree with you completely. 

And, in that scenario, President Obama breaks one of his biggest campaign pledges, and that‘s not to increase taxes on anybody who makes $250,000 -- any families making $250,000 or under. 

MATTHEWS:  Ah.  Powerful point.

Thank you so much, Jeanne Cummings, for joining us.

Up next:  What does Christine O‘Donnell think of Bill Maher, after Maher released all those wacky old clips of her?  You will be surprised.  The “Sideshow” always has surprises.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

First up: life after politics.  Christine O‘Donnell turned on the charm with Jay Leno last night.  She even had nice things to say about Bill Maher, who was, of course, the guy who put up those infamous clips of O‘Donnell talking about evolution, Hare Krishnas, and, lest we all forget,  witchcraft.

(BEGIN VIDEO CLIP, “THE TONIGHT SHOW WITH JAY LENO”)

CHRISTINE O‘DONNELL ®, FORMER DELAWARE SENATORIAL CANDIDATE:  My sister and I were watching the show when—when Bill, you know, made his threat.  And I just thought, you know, whether it‘s comedians...

JAY LENO, HOST, “THE TONIGHT SHOW WITH JAY LENO”:  And what was the threat?

O‘DONNELL:  Well, that he was going to keep airing the clips until I went on the show.  And whether it‘s a comedian or a terrorist, you shouldn‘t respond to threats.

LENO:  OK.

O‘DONNELL:  So, it‘s a shame.  But I do—I do like Bill Maher, and I was grateful for the time that he gave me on his show, but... 

LENO:  You are single, right? 

O‘DONNELL:  Yes. 

LENO:  Could you date a Democrat?  Like, I see Carville and Matalin there.

O‘DONNELL:  If that Democrat doesn‘t mind being wrong a lot, then sure. 

(LAUGHTER)

LENO:  oh.

(LAUGHTER)

O‘DONNELL:  Sure I could.

(END VIDEO CLIP)

MATTHEWS:  O‘Donnell‘s talking about a book deal.  Who actually writes these things, anyway?  A reality show, I could see that.  And you guessed it, another run for political office. 

Speaking of, outgoing Minnesota Governor Tim Pawlenty‘s gearing up to start his book tour and campaign for president.  The problem, this year‘s Minnesota governor‘s race isn‘t resolved yet.  In fact, an automatic recount is set to start later this month.  Remember that state‘s 2008 recount in the Al Franken Senate race took eight months to get done. 

Pawlenty is currently scheduled to leave office January 3.  His book “Courage to Stand” comes out January 11.  Aides say to “The New York Times” -- told “The New York Times” that the book tour will happen, one way or the other. 

I thought his book should be called “Good and Pawlenty.”

Next: tempest in a teapot.  Earlier this week, Florida congressman-elect Allen West, a Tea Partier, tapped conservative radio host Joyce Kaufman to be his new chief of staff.  Among Ms. Kaufman‘s greatest hits, well, she called Speaker Pelosi garbage.  She said illegal immigrants who commit crimes in this country should be hanged and their bodies shipped out of the country.  Oh, yes, and this:  If ballots don‘t work, bullets will. 

God, sounds like Sharron Angle.  Congressman-elect West announced today, with deep regret, that Kaufman declined his offer to be his new chief of staff.  West added, however, that he will always seek Joyce‘s counsel, so he can be what he calls a good representative of his congressional district. 

Time now for tonight‘s “Big Number.” 

President George W. Bush made his comeback this week.  How did it go?  Well, on its first day, the book sold 220,000 copies.  It was Random House‘s highest nonfiction opening day sale since President Clinton‘s autobiography, which sold twice that many, 400,000 books.  Altogether, the Bush book gets a strong start -- 220,000 sold, tonight‘s “Big Number.”

Up next:  The Tea Party‘s looking for a few more scalps in 2012, and it has its eyes on Senators Orrin Hatch of Utah and Olympia Snowe up in Maine.  How worried should they be?  I would say a lot.  Our strategists join us next.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

Disappointing blue-chip earnings and a stronger dollar dragging stocks lower today, the Dow Jones industrials slipping 74 points, the S&P off five, the Nasdaq falling 23 points.

Networking giant Cisco Systems enduring its biggest declines ever after an earnings release, plunging more than 16 percent on a disappointing revenue outlook, despite topping expectations on profits.  And Disney also moving lower, after missing expectations on the top and bottom lines.  Shares had been trading near 52-week highs ahead of those results. 

Viacom enjoying a bump on strong earnings, boosted by solid results at its MTV unit.  Bellwether Boeing still on the ropes after suspending tests of its new 787 Dreamliner.  And European banks took a hit, as the cost of debt in Ireland soared, pushing the euro to record lows. 

But material stocks one of the few bright spots today on a report showing stronger demand for metals in overseas markets. 

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

HARDBALL. 

MATTHEWS:  Welcome back to behind.

The Republicans may have just fought successfully in the 2010 midterms, but there are already possibly fights coming up in the next election.  Long time senators like Utah‘s Orrin Hatch and Maine‘s Olympia Snowe may be at risk of a Tea Party challenge and being defeated. 

Joining me now is our strategists, Republican Todd Harris, who‘s in the middle of all this, and Democrat Steve McMahon.

You can enjoy this fight for a second, Steve.

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  I‘m going to love it.  I‘m going to love it. 

MATTHEWS:  I‘m talking to you, brother. 

It seems to me that Orrin Hatch voted against health care.  One reason he pulled himself off that, even during the Finance Committee coverage, is he saw what was happening to his partner, Robert Bennett.  Bennett had like a 90 percent or 88 percent conservative voting record.  Wasn‘t good enough for the Tea Party.  They blew him out in a convention.

Does Olympia Snowe face defeat at the hands of a far right up in Maine, Orrin Hatch of a far right in Utah? 

TODD HARRIS, REPUBLICAN STRATEGIST:  I think both of them are going to

the one thing that benefits both of them is that they have the benefit now of hindsight, because they watched what happened to Bennett. 

And the fact is that...

(CROSSTALK)

MATTHEWS:  Yes, but the Democrats saw this crap coming for a year and couldn‘t do anything about it. 

HARRIS:  But wasn‘t just that Bennett wasn‘t...

MATTHEWS:  Yes. 

HARRIS:  ... that they didn‘t view him as being conservative enough.  It was also he wasn‘t working his base.  And that‘s what happens when you‘re in Washington for too long. 

Let me be totally clear about something.  If I lived in Delaware, I would have voted for Mike Castle in the Republican primary.  But, having said that, the fact that a guy who‘s been in Washington for this long couldn‘t get 30,000 people to vote for him in a Republican—that‘s all you need in Delaware to win a Republican primary.  And he couldn‘t do it. 

He ran on being...

MATTHEWS:  Yes. 

HARRIS:  He ran as being part of the establishment, as having experience.  And he was a little tone-deaf. 

MATTHEWS:  Let‘s take a look at these.

Steve, I want you to look at these Republicans who are going to face the heat of the right if conditions continue with the bad economy and the anger against anything that looks like centrism from the right -- 10 Senate seats are up in 2012.  That‘s coming rather quickly, if you‘re one of those guys or women. 

Here‘s one.  Here the people are whose terms are coming to an end, Wyoming‘s John Barrasso, Massachusetts‘ Scott Brown, of course.  He just had a two-year term.  Tennessee‘s Bob Corker, who beat Harold Brown—

Howard—Ford, and Nevada‘s John Ensign, Utah‘s Orrin Hatch, Kay Bailey Hutchison of Texas, Arizona‘s Jon Kyl, Indiana‘s Dick Lugar, Maine‘s Olympia Snowe, and Mississippi‘s Roger Wicker, who took Trent Lott‘s place.

You know, a lot of those guys are fairly new members of Congress, like Scott Brown.  Your thoughts.  Are you happy to see them being knocked off by crazies on the right, to put it bluntly? 

MCMAHON:  Well, to put it bluntly and to put it honestly, yes, I am, actually, because they‘re going to get knocked off by crazies on the right. 

And if you look at the Tea Party‘s record with their crazies on the right, starting with Christine O‘Donnell, then going to Alaska with Joe Miller, in Nevada with Sharron Angle, even Colorado with Ken Buck...

MATTHEWS:  He looks like he‘s got a short 15 minutes.  He‘s looks like his Andy Warhol 15 minutes are about up, that guy. 

MCMAHON:  But, for the most part, they have done one of two things.  They have either produced nominees who couldn‘t win or they have produced nominees who made it possible for Democratic candidates who were severely vulnerable to win, or they have put Democrats in play where they shouldn‘t be in play.

If Olympia Snowe gets primaried by a Tea Party candidate, and that Tea Party candidate wins, that seat is going to a Democratic candidate.  Any place where it‘s a purple or a blue state represented by a Republican, if the Tea Party nominee comes out, I would be willing to bet that the Tea Party candidate loses. 

And I think in red states where—you know, like Orrin Hatch, if he stepped out and did what Lisa Murkowski did right now, he probably would win.  So, I think you‘re probably going to see some temptations on some of these senators‘ parts to not participate in the Tea Party process and to step out and do it on their own. 

(CROSSTALK)

MATTHEWS:  Just to be my inconveniently honest self, if you were right, then Orrin Hatch would—I mean, Joe Sestak would have been better off running up against Orrin Hatch—I mean Arlen Specter in Pennsylvania.

The fact is that Arlen Specter was probably not as strong a candidate as the Tea Party-backed Pat Toomey.  So, you‘re wrong, Steve. 

MCMAHON:  Well, no, I mean, it depends on the state.  So, Pennsylvania is a blue state.

MATTHEWS:  Well, of course.  Everything depends on the state. 

(CROSSTALK)

MATTHEWS:  Here‘s a blue state with a winger.  The winger did better than Arlen would have done.

MCMAHON:  Chris, each one of these states is going to have its own unique circumstances. 

MATTHEWS:  Yes. 

MCMAHON:  In a Republican red state, a Tea Party candidate who gets nominated could actually win.  But in a Republican red state like Lisa Murkowski‘s, the Republican senator can step out, run as an independent, where there‘s not a very competitive Democrat, and can be elected away. 

(CROSSTALK)

MCMAHON:  So, in Maine, for instance, that wouldn‘t work, but, in Utah, it might.

(CROSSTALK)

MATTHEWS:  Look at what‘s happening in Utah.  You make the point, a good point there. According to a recent Mason-Dixon poll, among registered voters, that‘s always a tricky number, but it is a presidential year.  So, registered voters polls make sense.  A lot of people vote.

If Orrin Hatch‘s re-election were held now, 40 percent said they‘d vote to reelect him.  Forty-eight percent said they‘d him for somebody else and 12 said they don‘t know.  That‘s not a great re-elect number, 40.

TODD HARRIS, REPUBLICAN STRATEGIST:  I mean, it‘s not a great number.  But it‘s also an irrelevant number.  A poll of registers voters two years out from the election doesn‘t mean a whole lot.  You‘ve already seen signs—

MATTHEWS:  It means something.

HARRIS:  It means nothing.

MATTHEWS:  Oh, yes?

HARRIS:  It‘s not worth the paper it‘s written on.

MATTHEWS:  Oh, OK.  You don‘t think he‘s a little scared.

(CROSSTALK)

HARRIS:  Listen.  Hold on.

MATTHEWS:  Probably the mentality Robert Bennett had, don‘t worry about polls, you‘re out.

HARRIS:  But, no, my point is that I think that Hatch, Snowe and some of these other members have learned from watching what happened to Bennett.  You already see Hatch taking steps in Utah, to solidify of his base of support.

MATTHEWS:  Let‘s talk about a guy who I once voted for, that‘s Michael Steele—and I will continue for any African-American candidate so we have at least in the United States Senate.  That will be a principle of mine.  It is an absolute embarrassment in this country that a country like ours has no African-American senators starting now because Burris is now out and, you know, Kirk is in.

Does it bother you, no black senators in the United States?  Just a principle.

HARRIS:  Yes, we just elected two new African-American Republicans to Congress.

MATTHEWS:  The House.

Does it bother you, Steve, we have no black senators?

MCMAHON:  Yes, it does.  And, listen, I think Michael Steele would be glad to know that you support him.  And I think he probably wishes that you are an RNC member right now because he needs you vote—

MATTHEWS:  OK.  Tell me about, not that you‘ve stepped on my shoulders to make a brilliant point, go for it.

(LAUGHTER)

MCMAHON:  Well, listen, for Michael Steele, I mean, the first African-American chairman of the Republican Party is now being run out by the usual crowd that doesn‘t think he did a sufficiently good job whatever it was he was supposed to do.  I don‘t know if Michael Steele was supposed to win 80 seats or 90 seats or 100 seats, what it would have taken to make them happy, but, obviously, they‘re unhappy with Michael Steele.  They want to run him out.  They‘ve got all kinds of candidates.

MATTHEWS:  Why?  That‘s what I got to ask the question to the Republican.  I‘m sorry, you were good on that, but I want to talk to Republican.  Why knock a guy who‘s got a winning record like Babe Ruth?  I mean, this guy, from the time he got in there, you won New Jersey, you on Virginia, you won Scott Brown in Massachusetts, and then you took the House of Representatives with a 60-some vote victory.  You almost took the Senate.  What do want?  And the governor‘s chairs, six of them.

HARRIS:  Well, here‘s the bottom line for the chairman‘s race.  You can‘t beat somebody with nobody.

MATTHEWS:  Why should you?

HARRIS:  Every king‘s court got barons and dukes who think they do a better job, and they love to talk about it, but until somebody steps forward and says I‘m going to challenge Michael Steele, it‘s all—

MATTHEWS:  I love the way Republicans talk.  They say, barons and duke.

(LAUGHTER)

MATTHEWS:  Anyway, we talk, you know, Democratic politics here, Republican politics, I mean, lower R.

Anyway, thank you, Todd Harris and Steve McMahon.  I love those medieval references.

Up next: today is Veterans Day, of course, and the Pentagon has concluded there would be little rest to getting—well, at least among majority voter, the people over there, in the report that‘s gotten leaked.  They don‘t think there‘d be a big problem with letting gays serve openly in the military.  That‘s a big development and that‘s ahead.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  President Obama commemorated Veterans Day in South Korea.  There he is today.  The president laid a wreath at the War Memorial at the Yongsan Garrison alongside U.S. troops and veterans, of course, of the Korean War.  The Yongsan Garrison is home to 25,000 American military personnel who make United States forces there. They‘re still based over there guarding the DMZ.

HARDBALL will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I‘ve been a strong believer in the notion that if somebody is willing to serve in our military, in uniform, putting their lives on the line for our security, that they should not be prevented from doing so because of their sexual orientation.  I think it‘s worth noting that the overwhelming majority of Americans feel the same way.  It‘s the right thing to do.

(END VIDEO CLIP)

MATTHEWS:  We‘re back.  That was President Obama in last week‘s news conference.

According to “Washington Post,” a Pentagon study group on the “don‘t ask, don‘t tell” policy has concluded that lifting the ban on gays in the military would not seriously harm the war effort.  And the military survey shows that a majority of active duty and reserve forces do not care if gays are allowed to serve openly now.  But the findings still may not be enough for Republicans to support a repeal of the policy.

Dan Choi is an Iraq war veteran—thank you for your service—who was discharged from the Army National Guard this year after coming out.

And Alex Nicholson was also discharged under the “don‘t ask, don‘t tell” policy.  He‘s executive director of Service Members United, an advocacy organization for gay and lesbian military members and veterans.

So, let‘s try to try about the unusual situation.  Politicians tend to try to be ahead of the curve usually.  They try to be smarter than people because they want to get reelected and reelected and reelected.  They like their jobs.

Here we have a case where about 70 percent of the American people believe in open service.  No more “don‘t ask, don‘t tell.”  If you‘re gay, you say.  You serve, no problem.

They‘re for that.  And that‘s really moved up over the last several years, right?  How come the politicians haven‘t kept up with the people?  Why do we still have a problem getting this passed to the Senate?

LT. DAN CHOI (RET.), IRAQ WAR VETERAN:  I think it‘s a political issue.  It‘s that simple.

MATTHEWS:  Why is it a problem?  If the majority want it, why do—why do majority or at least half the Senate not want it?

CHOI:  Well, I think when I talk about what my military service was and when I talk about wanting to serve, there are certainly many benefits of serving.  Many fringe things on the other side of the idea of service.

I think politicians think in very different ways from the people at times.  They think the gay issues sometimes are difficult political issue.  And I think for anybody to make promises like President Obama did and not take action—

MATTHEWS:  Look, you‘re going in your direction.  Go in my direction.  Why is it a problem getting it through the Congress?  Because I just read the Constitution.  On this point, the Congress has the right to raise and support armies.  Congress has the fundamental power of the Army, according to the Constitution.

CHOI:  OK.  So, the direction you want—

MATTHEWS:  No, I‘m asking you is why can‘t the Congress go with the American people on this issue politically?  What‘s holding them up?  Why are no Republicans aboard this thing?  Getting rid of the “don‘t ask, don‘t tell”?  Why don‘t they wave their hands and say, of course, I‘m for open service.  The American people are for it overwhelming.  Why don‘t the Republicans join the Democrats on this?

CHOI:  Well, I don‘t speak for any political party.  I think you know that.

MATTHEWS:  But I‘m asking you as an ally.

CHOI:  But on my analysis I don‘t need to exactly understand why a certain politician votes a certain way, I just need to know that currently under the law, I‘m not allowed to tell the truth.

MATTHEWS:  Right.

CHOI:  And I‘m not an equal citizen.  I come back from war in Iraq and I‘m treated as a second-class citizen.  People take polls about whether I‘m popular or not.

MATTHEWS:  I know—

CHOI:  And I think that‘s an insult and what I‘m focused on.  That might not be your direction, but I think that it‘s very clear.

MATTHEWS:  My question is to try to understand why—

CHOI:  Whether it‘s Congress or it‘s the president, these people are leaders who are elected.

MATTHEWS:  Right.

CHOI:  And we all know that politics is war with no blood.  War is politics with the blood.

MATTHEWS:  Right.

CHOI:  Why is it that in politics we realize that there are consequences but we don‘t act on them?

MATTHEWS: But my question is, why wouldn‘t a politician who is self-interested, why wouldn‘t he or she obey the will of the people?  It would be in their self interest to do it.

CHOI:  Well, there‘s a lack of courage, and I think that‘s one thing that especially on this day, we can take—

MATTHEWS:  Why is there courage in the Democratic Party and not the Republican Party?

CHOI:  Well, I don‘t think that there‘s courage when you talk about politicians who are simply politicians.  I think that when you talk about courage—

MATTHEWS:  Well, 58 -- just a minute.  We have 58 Democrats now in the Senate.  They‘re counting in almost all of them going in that direction, but it ain‘t 60.

I‘m going to go to you, Alex, on this question.  What‘s the problem?

ALEX NICHOLSON, IRAQ WAR VETERAN:  I think, to go back to your larger point here, I think we‘ve really lost part of our principle of civilian control in military.  It doesn‘t matter if you look at Congress, the courts—

(CROSSTALK)

MATTHEWS:  -- the commandant of Marines, he says something it‘s out on the public record.  They hang their hat on that.

NICHOLSON:  They defer way too much to the military judgment on this.  You‘re right, Congress has the power to raise and support armies, majority of the American people are going to support of repealing this law.  Congress has to act to do it.

MATTHEWS:  It seems like they‘re hiding behind—I understand your passion, you served your country.  I wasn‘t over there.  You did.

Let me ask you this: why are they hanging their hat on—whether they‘d be a report, you see the reports leaked.  That‘s not good enough.  They want to have hearings now on the report and they want to make sure that they run out of clock and they‘re going to run out the clock this year.  Next year, it‘s a Republican Congress.

You say politics, this is something that you get into—it‘s going to be a lot harder for a Republican Congress to do it.  What do you think?  You first.

CHOI:  It‘s not about whether a mission is difficult.

MATTHEWS:  Why don‘t they do it?

CHOI:  It doesn‘t matter whether it‘s considered difficult or hard. 

It‘s a matter of doing the right thing.

(CROSSTALK)

MATTHEWS:  But when you talk like this to members of the Senate, if

you get into a room with them, what do they say?  What do Republicans say -

-

      

(CROSSTALK)

CHOI:  It doesn‘t matter what they say to me.

MATTHEWS:  Well, they get to vote.

CHOI:  I know that when you talk about the gay community and the disappointment that we have, it‘s not just the disappointment in one party.  I know that equality, if it is—

MATTHEWS:  Well, how do you blame the Democrats and every single one of them if Senate voted your way?  How do you blame them?

CHOI:  I don‘t get what you‘re saying.

MATTHEWS:  If every single one of them votes to get rid of “don‘t ask, don‘t tell,” isn‘t that enough for you?

CHOI:  Well, if you think about the people who have made promises to us—

MATTHEWS:  What more can they do?

CHOI:  -- I think that there‘s a lot more that the president can do.

MATTHEWS:  OK.  What can he do?

CHOI:  I think on the day for the cloture vote, I think that it would had been wonderful if he called a single senator rather than just calling a sports team in Seattle.  I think if the president is going to make these promises, he needs to put his money where his mouth.

MATTHEWS:  OK.  How does he get a Republican to vote your way?

CHOI:  I think that he‘s the president of the United States and he has more power than I do.

MATTHEWS:  Well, let me tell you how the country works, you sure uphold the Constitution, you know it as well as I do, that Congress gets to decide these issues.  They pass the “don‘t ask, don‘t tell” law.  They got to repeal it.

CHOI:  I think it really helps if the president did stop the discharges.

MATTHEWS:  Can he do that legally?

CHOI:  I think he can.  In addition to—

(CROSSTALK)

MATTHEWS:  How does the president ignore the will of Congress?

(CROSSTALK)

CHOI:  When you talk about what is unconstitutional, and the courts say that “don‘t ask, don‘t tell” is unconstitutional.  Number one, I don‘t think that president should repeal.

(CROSSTALK)

CHOI:  Is it unconstitutional is the question, and why can‘t the president not just say what he knows is true, that it is unconstitutional.

MATTHEWS:  Because he took the same oath you did to observe the Constitution as determined by the Supreme Court.  The Supreme Court hasn‘t ruled yet.

(CROSSTALK)

CHOI:  The oath to support to what?

MATTHEWS:  Pardon me.

CHOI:   The oath is to what, the oath is to defend the Constitution

--

      

MATTHEWS:  To support the Constitution.

CHOI:  -- against all foreign and domestic enemies.

MATTHEWS:  That‘s right.

CHOI:  And I think when you talk about discrimination that‘s unjust in the military—

MATTHEWS:  That‘s your opinion.  But this is—we have to get the courts to rule on that.

CHOI:  And they have.

MATTHEWS:  I mean the only—

(CROSSTALK)

CHOI:  There‘s no reason to not repeal it.

MATTHEWS:  But it‘s not going to solve the problem.  And by the way I‘m with your passion because you‘ve been there.  I haven‘t been there.

Your thoughts, Alex.  He‘s a pretty strong minded guy on this.  Are you that strong minded?  Do you think that the president can just do this willfully, just say it?

NICHOLSON:  I think Dan‘s larger point is the president needs to get more actively involved advocacy on this issue.

MATTHEWS:  I do.  A good point.

(CROSSTALK)

NICHOLSON:  But you know, we do have a couple of Republicans, Chris.

MATTHEWS:  Who are they?

NICHOLSON:  Susan Collins.

MATTHEWS:  You don‘t have her—you don‘t have her yet.

NICHOLSON:  We do her to go if it‘s structured right.  Senator Reid has got to bring it up.

MATTHEWS:  I know, I know.

(CROSSTALK)

MATTHEWS:  When I see them vote for it, those two Republicans, Voinovich and her—

(CROSSTALK)

MATTHEWS:  Voinovich said today he‘s not going to do it.  Anyway, he said he‘s not going to do it.  We got the statement.  It‘s a tough fight.

Dan Choi, Alex Nicholson.

When we return, let me finish with some thoughts about—well, about this budget process.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Let me finish tonight with two of my fixed positions on the role of government in this country.

One, if you can‘t protect your border, you‘re not a country.  Two, if you can‘t control your budget, you‘re not a government.

On the border, yes, you have to guard it humanely, and given our history with the reasonable liberality, we are after all, the land of immigrants.  But countries have a right to decide how other people enter it.  If they don‘t take that responsibility seriously, they have failed their own nationhood.  I want people living here, right now, to stay and be given legitimate documents, but I want all employers who hire people in the future to see those documents or face charges.

My second fixed position is: if you can‘t control the budget, you‘re not a government.  The president assembled a commission to try to deal with the debt raising past $14 trillion.  The commission chairman had recommended a set of actions that will cut it in half, the projected debt growth over the next decade.

As a guy who once worked on the Senate budget committee at the time of its creation, I know how hard this is going to be.  Every pressure group in the country will want to blast its recommendations one at a time, and will bristle with outrage to get media attention.

But ask anyone who complains about the proposals, what they would do instead?  When I asked politicians to a program, they would cut, I get generalizations and procedures.  I don‘t get the name of a program, one costing up there where it would cut and make a difference.

If we only report on those who yell out the loudest, we are, in effect, defending the deficits.  I think that the chairmen of the commission are doing the job President Obama asked him to do, spreading the pain.  The pressure groups will do what they do.  The question is whether the people will do together what needs to be done.

We need a border.  We need a government budget.  The question is whether our politicians have the stuff to protect either.

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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