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updated 7/12/2011 11:44:47 AM ET 2011-07-12T15:44:47

Guests: Richard Wolffe, Stephanie Gosk, John Culberson, Shushannah Walshe, Robert Moore, Susan Page, Major Garrett, Rep. Donna Edwards

CHRIS MATTHEWS, HOST:  The guns of August.

Let‘s play HARDBALL.

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

If not now, when?  President Obama is making it clear he‘s willing to take the heat from the left by cutting entitlements.  It‘s time for the Republican leaders to be willing to take the heat from the right.  He still wants the big deal that would include perhaps cuts in Medicare, Medicaid and even Social Security, and with them tax increases.  John Boehner responded quickly—no to any tax increases, period.

Well, my question tonight, do Republicans want to deal?.  Would they really tank the economy so they can say no to taxes, the face of the deadlock?  The president said both sides have people who refuse to compromise.  Tonight, we have one from each camp, Democrat and Tea Party Republican.  I‘m going to ask them what price they‘re willing to see the country pay so they can stick to their positions.

Also, Michele and Rick‘s not so excellent adventure.  Both Michele Bachmann and Rick Santorum have signed a so-called marriage vow from a conservative group that suggests that African-Americans had a better family life under slavery.  Who writes this stuff?  And worse yet, who would sign on to such stuff?  By the way, Bachmann now leads the pack in a new Iowa poll.

And Rupert Murdoch‘s “News of the World” scandal sheet—the scandal itself keeps getting bigger.  Here comes report that the tabloid targeted former prime minister Gordon Brown‘s voicemail and bank account.  How far will this scandal go?

And “Let Me Finish” with the need for President Obama to go big-time on jobs.

We start with the right wing and whether they want to deal or take the economy off a cliff.  Wow!  Susan Page is the Washington bureau chief for “USA Today” and Major Garrett is the Congressional correspondent for “The National Journal,” two heavyweights here.  Thank you both.

And I guess that‘s the pregnant question, where‘s this going, because the president clearly is willing to triangulate and say, I want a deal.  He‘s talking about all kinds of compromises, even on Social Security.  And the president—and the opposition leader, Boehner, who we all thought was sort of a moderate, a conservative wet (ph), if you will, is not playing ball.  Susan.

SUSAN PAGE, “USA TODAY”:  Well, and in fact, friendly language he used towards John Boehner.  Maybe it doesn‘t do John Boehner any good with his troops, but his tone at the news conference was, Boehner and I want to make a deal, but Boehner‘s constrained by his caucus, which is conservative and has a lot of Tea Party forces and Republicans who are afraid of Tea Party forces.  And it doesn‘t sound to me like—the question clearly is, can Boehner bring his troops along for any kind of deal.

MATTHEWS:  So the president is saying two things, Major—I want a big deal, a $4 trillion over 10 years, like the bipartisan commission, Bowles—Bowles and Simpson, and at the same time, he‘s saying, I don‘t want to be some short string, kick the can down the road—by the way, before you respond, here he is today portraying Speaker Boehner as being in a tough spot within his own party.  He‘s showing some sympathy for the lad.  Let‘s listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  My experience with John Boehner is—has been good.  I think he‘s a good man who wants to do right by the country.  The politics that swept him into the speakership were good for a mid-term election.  They‘re tough for governing.

(END VIDEO CLIP)

MATTHEWS:  Tough for governing.

MAJOR GARRETT, “NATIONAL JOURNAL”:  Well, they were very good for a mid-term election because it allowed him to be part of the governing conversation, which John Boehner clearly is now.  And what happened with John Boehner is there was a fundamental disagreement between his definition of tax reform and the White House definition of tax reform, and on the pace at which it would be dealt with later on this year, if he were to get this big deal.

And as details began to filter down to the rank and file, they said, Mr. Speaker, you‘re too far out on a limb.  So he drew back.

The thing the president also said today that‘s very important, he said, Look, I have untested problems on my left.  They don‘t know what these Social Security and Medicare cuts are in reality because all this right now, Chris, is written, as I‘ve said before, in water.  Until anyone sees these details even of a trillion dollars in spending cuts over 10 years, I‘m not sure any of it is politically practicable because until people stat voting in the House and the Senate on something that‘s real and detailed, we have no idea where the underlying politics of this all is.

Boehner has clearly indicated he was farther ahead than he was comfortable being of his conference.  The president may be farther ahead than his party...

MATTHEWS:  OK...

GARRETT:  ... on Social Security and Medicare, and until we see the details...

MATTHEWS:  Well, let‘s talk about why there‘s a difference here.  Boehner has a very short string because he‘s working for the House Republican majority.  He works for those 240 members.  Barack Obama still has the—the president of the United States still has more than a year-and-a-half on his term.  So he is his own boss, right?  And he can sort of have more leash there,+ right?

PAGE:  Oh, absolutely...

MATTHEWS:  (INAUDIBLE) Nancy Pelosi and the rest of the Democrats.

PAGE:  And he‘s got a lot of—let‘s face it, he‘s got a lot of pull with Democrat.  He could go too far for congressional Democrats.  But the real problem is on the Republican side, I think, in terms of getting a deal together.  I mean, we know that Democrats and independent voters want them to reach a deal.  Republican voters aren‘t so enthusiastic.

MATTHEWS:  Why?  Why is that so different?  Why do we have Democrats -

a lot of moderates and progressives watch this show, and I haven‘t heard as much screaming as I‘ve heard from the right about absolutely no give, the absolute intransigence of the right.  Is that because these Tea Party people are not really politicians?  They came into office with one signal decision, I will not raise taxes under any circumstances.  It‘s almost like a baptism.  They can‘t break from it.

GARRETT:  Well, they believed that philosophically originally, and the last two months of jobs data has reinforced Republican antipathy towards tax increases.

MATTHEWS:  OK.

GARRETT:  Both as economics and philosophy, and not inconsequently, politics.

MATTHEWS:  OK...

(CROSSTALK)

PAGE:  ... is in a weaker position than he was two months ago on the economy and jobs issue.  That‘s why they‘re driving the hardest bargain they think they can.

MATTHEWS:  Well, here the president is, calling on Republicans to stop dragging their feet.  Let‘s listen to him earlier today at that press conference.

(BEGIN VIDEO CLIP)

OBAMA:  They keep going out there and saying, you know, Mr. President, what are you doing about jobs?  And when you ask them, Well, what would you do?  We‘ve got to get government spending under control and we‘ve got to get our deficits under control.  So I say, OK.  Let‘s go.  Where are they?  I mean, this—this is—this is what they claim would be the single biggest boost to business certainty and confidence.  So what‘s the holdup?

(END VIDEO CLIP)

MATTHEWS:  Well,  the big question, of course, everybody (INAUDIBLE) we got about 10 days to get this done, right?  This is not going to go on forever, 10 days to really start getting the bill passed and get it to the desk and make it law.

And I guess the question is, do you think, based upon your reporting, you two, that the Republican Party is willing to force the president to two simple options, take defeat and sign onto just a spending cut, no tax increase, or face default?  Are they willing to jam him that hard?  You seem to be more perky going for this now.  Do you want that?  Is that an answer you can give me?

GARRETT:  It is an answer I can give you.  Right now, House and Senate Republicans will take trillion collars in spending cuts with maybe $200 billion in user fees, land sales and auction sell-offs.  That‘s it.  That‘s the upper echelon.

MATTHEWS:  And those are the revenue hikes?

GARRETT:  That‘s something they will call “revenue enhancements.” 

There‘ll be a semantic dancing game around those...

MATTHEWS:  But not taxes.

GARRETT:  But not tax increases, not tax reform.  A trillion dollars, which gets you into late spring of next year, which is outside the bandwidth of what the president said today.  He didn‘t want to do 30 days, 60 days, 120 days.  It would be longer than that.

MATTHEWS:  Yes.

PAGE:  Yes, let‘s...

GARRETT:  It‘s in that sweet spot in the middle.  And remember what Chris Van Hollen said...

PAGE:  Spring of an election year, an ideal time to be dealing with these...

GARRETT:  Chris Van Hollen said today...

(CROSSTALK)

GARRETT:  Chris Van Hollen, the top Democrat on the House Budget Committee, today said, We have a trillion dollars we‘ve agreed to.  I‘m telling you, a trillion dollars appears to me to be both politically and policy possible.

PAGE:  Republicans...

MATTHEWS:  OK, let‘s...

PAGE:  ... are not persuaded that it‘s catastrophe if they—if they don‘t reach this deadline, don‘t...

MATTHEWS:  They aren‘t?  They‘re not?

PAGE:  And the American people aren‘t, either.  This is...

MATTHEWS:  I don‘t care about the American—the American people are not experts on the bond market.  The Republicans have the best access, at least as good an access as the Democrats, to money market information.  Do they really not want to believe it, or are they willing to risk a disaster for the president?

PAGE:  There are Republicans who are not convinced...

MATTHEWS:  Well, besides...

(CROSSTALK)

MATTHEWS:  ... Jim DeMint here and Michele Bachmann.  I‘m talking in the sane part of the Republican Party.

(LAUGHTER)

MATTHEWS:  Who—give me a...

(CROSSTALK)

GARRETT:  ... August 2nd is real and he has every intention of trying to...

MATTHEWS:  Right...

(CROSSTALK)

MATTHEWS:  I want to plumb the depths of this.  Name a sane, a mainstream reasonable conservative Republican who honestly believes they don‘t have to deal with this debt crisis by August?

PAGE:  It is clearly the Tea Party part of the Republican Party who feels that way.  Jim DeMint is a pretty influential senator.  I don‘t think you can just dismiss him out of hand as his view not mattering.

MATTHEWS:  It‘s incredible he‘s a United States senator!  It‘s incredible!

PAGE:  He is not just...

MATTHEWS:  He came out and said...

(CROSSTALK)

PAGE:  ... influential United States senator.

MATTHEWS:  He said today that he will not agree to a debt ceiling hike unless there‘s a constitutional amendment attached to it on a balanced budget.  He knows that will never happen.

GARRETT:  Well, it can‘t pass now, especially the way the balanced budget that‘s been drafted by senator Republicans has been drafted.

(CROSSTALK)

MATTHEWS:  This is an upside-down world!

PAGE:  ... limiting government spending to 18 percent of gross domestic product.  It‘s 24 percent now.  That would require cuts of the kind of magnitude that would never get 64 votes in the United States Senate.

MATTHEWS:  If the Republican Party...

GARRETT:  I‘m just saying...

(CROSSTALK)

MATTHEWS:  Let‘s take a look.  Following the president‘s news conference, Speaker Boehner laid it out, what he sees as the obstacles to a deal.  Let‘s listen to him.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE:  This boils down to two things, and I said it on Saturday night.  The president continues to insist on raising taxes, and they‘re just not serious enough about fundamental entitlement reform to solve the problem for the near to intermediate future.  I want to get there.  I want to do what I think is in the best interests of country.  But it takes two to tango, and they‘re not there yet.

(END VIDEO CLIP)

MATTHEWS:  Let me ask you this, is the Republican Party more afraid of a fiscal disaster in this country, sort of on the level of, say, Portugal or Ireland, not quite Greece, or more afraid of the Tea Party, those leaders, like him?  What‘s he more afraid of...

PAGE:  Well...

MATTHEWS:  ... a possible disaster or a possible lynching by his own people?

PAGE:  Boehner has—I think Boehner has tried to kind of walk a line...

MATTHEWS:  So he‘s not sure what he‘s most afraid of.

PAGE:  But—you know, what good does he do Obama if he‘s no longer speaker?  I mean, it‘s tricky politics.  It‘s not so simple.

(CROSSTALK)

GARRETT:  Boehner and McConnell don‘t want to default, OK?  They said so publicly.  They‘re in negotiations to avoid a default.

MATTHEWS:  Right.

GARRETT:  And they‘re going to try to drive the hardest bargain.  What they‘re telling the president is, Look at the political realities.  You didn‘t raise taxes in a lame duck session when you had 59 Democrats in the Senate and almost 260 in House.  Don‘t expect Republicans to raise taxes when we own the House of Representatives and have six more Senate seats.

MATTHEWS:  Yes.

GARRETT:  Operationally, as a matter of politics, that doesn‘t work. 

And that‘s their message to the president...

MATTHEWS:  But they‘re talking about...

(CROSSTALK)

MATTHEWS:  ... talking about.  He‘s talking about raising those taxes among—above people at—above $250,000 a year...

GARRETT:  Right.

MATTHEWS:  ... by 2013, not now, two years from now.

GARRETT:  Understood.  And the president‘s own mathematics on this is if you get to a trillion now, for example—let‘s just take (INAUDIBLE) for the sake of argument.  And he knows that the Bush tax cuts are going to expire in 2012.  That‘s another $700 billion.  So he can book $1.7 trillion in deficit reduction with this deal and the expiration of the Bush tax cuts.  And I think that was one of the reasons Boehner was intrigued by this possibility of a big deal because it could have given him negotiating clout over some of those to expire Bush tax cuts, which he‘d like to preserve.

MATTHEWS:  Right now...

(CROSSTALK)

MATTHEWS:  Right now, we got 10 days to go.  Are we going to use up the whole 10 days to get something done?

PAGE:  Always.  Always.  Do we ever not?

GARRETT:  This week is about preparing the Obama message for 2012, and Republicans concede privately he‘s doing a much better job of it than they are.

MATTHEWS:  Because he‘s in the middle?

GARRETT:  Because he looks like he‘s moderate, looks like he‘s bending over backwards.  I‘m the reasonable one.  I‘m the adult here.  You walked away.  You took your ball and went home.  Republicans would like to see the president more pressed on what kind of things on Social Security he‘s actually talking about to get the left a little bit more cranked up, but that‘s not going to happen.  The president‘s going to play the reasonableness, I‘m the triangulator...

MATTHEWS:  That‘s right...

(CROSSTALK)

MATTHEWS:  ... doesn‘t have the plays down.

GARRETT:  That‘s going to play out all this week.

MATTHEWS:  Right.

GARRETT:  But next week, this has to get done because the time clock will start to tick next week in a very real way, and the bond markets and the stock market will start to respond.

MATTHEWS:  I wonder if either party has its final position figured out yet.  Anyway, thank you, Susan Page.  Thank you.  I still want to know the list of reasonable Republicans who don‘t think we‘re facing a crisis here.  Jim DeMint doesn‘t make it for me.

Coming up: President Obama says there are people on both sides, left and right, who refuse to compromise.  We‘re going to meet two likely suspects in a minute.  I don‘t think either one wants to compromise either on Medicare or taxes depending on what side they‘re coming from.  Both sides at their battle stations.  We‘re going to talk to them when we come back.

HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Big fight.  Republican presidential candidate Tim Pawlenty is sparring with fellow Minnesotan Michele Bachmann.  Pawlenty said Bachmann‘s record of accomplishment in Congress is “nonexistent”—that‘s his phrase.  Bachmann responded by taking the high ground, saying she didn‘t want to focus on negativity.

And here‘s why Pawlenty felt the need to attach Bachmann.  Bachmann now is tops in Iowa, a state he needs to win to have any shot at the nomination next year.  Bachmann‘s at 25 percent.  She‘s moving on up, ahead of Mitt Romney now, while Pawlenty‘s tied for distant third at 9 percent.  Bachmann, bet on her right now.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  President Obama made pointed references in his news conference this morning about people on either side who won‘t give in, Democrats who don‘t want to touch Social Security or Medicare and Republicans who refuse to raise taxes.  He was talking about people just like our new—next two guests.

Let‘s start with the Democratic congresswoman Donna Edwards of Maryland.  Thank you, Congresswoman, for joining us.  You‘re a member of the Progressive Caucus, and perhaps just as important, you came to our 15th anniversary party last week.  Thank you for being one of our great guests.

Look, I guess I‘m trying to figure what‘s givable and what‘s not. 

Would you agree to any cuts in Social Security benefits?

REP. DONNA EDWARDS (D), MARYLAND:  Well, you know, first of all, let‘s just start from the premise, and the president agrees with this, that Social Security is actually not the reason that we‘ve run up our long-term debts.  And so my preference would be, if we‘re going to have a conversation about extending Social Security solvency beyond 2037, then the way that we should do that is not in the context of these debt ceiling discussions.

And I just want to keep in mind that, you know, the real causes of our long-term debt are related to things that the Republicans don‘t want to give up on.  So I‘d rather have that conversation.

MATTHEWS:  OK, let me ask you—so we don‘t deal with Social Security now.  What about Medicare cuts, who are part of the current problem?  Everybody knows Medicare costs are going through the roof.  Would you touch Medicare benefits or costs?

EDWARDS:  No.  I mean, I think one of the things that we did in the Affordable Care Act last year is we actually looked at, you know, ways that we can make Medicare more efficient, making sure that we can protect it for the long term.

And again, I want to have those conversations, but here‘s what we‘re are dealing with.  We need to raise the debt ceiling, no question about it.  I‘ve already taken that vote and I‘d take it again to make sure that we deal with the full faith and credit of the United States and make sure that we meet our obligations.

We can‘t have a conversation about seniors and those on disability and poor people having to sacrifice everything, but Republicans don‘t want to ask the wealthiest 2 percent, the millionaires and billionaires, to give up their tax cuts which are causing the major part of our long-term debts and our deficits, two wars in Iraq and Afghanistan that if we were to draw down earlier, for example, in Afghanistan, would deal with long-term debt issues.

So let‘s put those things on the table—corporate loopholes—instead of just turning to the piggy bank of Social Security and Medicare.

MATTHEWS:  What about Medicaid?  Would you cut that?

EDWARDS:  Medicaid—I mean, the challenge that we have from Medicaid is that we want to make sure that we don‘t shift—simply shift the burden onto our states, which really can‘t afford that right now.

Again, the conversations about these entitlement programs, while I find, you know, might be, you know, important for us to engage in, we‘re conflating apples and oranges when it comes to, one (ph), lifting our debt ceiling and dealing with the major causal factors for our long-term debt.

MATTHEWS:  Well, I‘m just—I‘m asking about all these possible cuts, which you‘ve rejected, because the cost of government right now is up to about 25 percent of our economy right now.  And the revenues are about at 16.  So it seems to me to get to some kind of equality, you‘ve got to raise the revenues up to around 20, 22, and you‘ve got to bring down the costs of government to around 22 (ph), if you want to get them anywhere even in the long term.

You—can you point to an area where you really want to cut government spending?

EDWARDS:  Well, I mean, I think I agree with our leaders...

(CROSSTALK)

MATTHEWS:  To get it below 25 percent. 

EDWARDS:  ... our leaders Van Hollen and Clyburn, who were negotiating with the vice president on a set of cuts that I think you know, make sense.  They‘re painful, painful for Pell Grants and student loans and things like that.

Willing to—you know, to accept those, but we have got to put revenues on the table.  And you know what?  Let‘s try to focus on getting 21 million people back to work, so that they can actually contribute to the revenue pool. 

And so I just think that there are some things that have actually been kept off the table particularly by what I think are really petulant Republican leaders who don‘t understand that you can‘t have—of the $14 trillion debt, you know, you have a couple of trillion of it that is corporate tax loopholes and that are tax breaks for millionaires and billionaires.  That stuff, in terms of revenue, has to be on the table. 

MATTHEWS:  What about your understanding of the situation?  Because some people in the Tea Party right—and I don‘t think they‘re balanced—are challenging whether the country has a problem if it doesn‘t meet its obligations. 

Do you have any reservations about the fact we need to find some resolution to this thing by August 2? 

EDWARDS:  Oh, absolutely. 

And I have listened to Secretary Geithner.  I have listened to the president.  And I absolutely agree.  August 2 is a hard and fast date.  And under the Reagan presidency, we raised the debt ceiling 17 times.  And—you know, and I think that it‘s time for us to do this now.  This is about meeting obligations that we have already incurred. 

People lost a tremendous amount in their retirement, their 401(k) plans with the financial crisis of two years ago.  It would be that in spades if we were to allow this—this August 2 date to pass.  And so I think it‘s very serious.

MATTHEWS:  OK. 

EDWARDS:  And I think no—anybody who thinks that we should run

right up until August 2 and beyond is really playing with fire.  And it‘s -

it‘s actually just very irresponsible. 

MATTHEWS:  OK. 

EDWARDS:  Again, I have taken that debt ceiling vote.  And I would be happy to take it tomorrow...

MATTHEWS:  OK. 

EDWARDS:  ... so that we can meet the full faith and—and obligations of the United States. 

MATTHEWS:  Thank you so much, U.S. Congresswoman Donna Edwards of Maryland, a member of the progressive people in the U.S. Congress. 

Joining me right now is Republican Congressman John Culberson of Texas, a member of the Tea Party Caucus. 

Sir, are there any revenues you would accept?  Would you increase—a tax increase for people over $250,000 a year, who make $250,000 a year?  Would you take back, say, the Bush tax cuts by...

REP. JOHN CULBERSON ®, TEXAS:  No, Chris.   

MATTHEWS:  ... 2013?  OK.

(CROSSTALK)  

MATTHEWS:  Would you raise the taxes for people that make over a half-million dollars a year? 

CULBERSON:  Chris, it‘s a terrible idea to raise taxes on anyone in an environment like this, where... 

MATTHEWS:  Anyone.

Just to run through this...

CULBERSON:  Yes. 

MATTHEWS:  ... how about people that make over $1 million a year?  You wouldn‘t raise taxes on people over a quarter million, a half-million?  How about people that make over a million?  Would you raise their taxes? 

(LAUGHTER)

CULBERSON:  Chris, you don‘t want to raise taxes on anybody in an environment like this. 

And in particular, I will tell you one I would like to get rid of is the ethanol subsidy. 

MATTHEWS:  OK. 

CULBERSON:  I think there‘s a lot of agreement among conservatives that we need to get rid of the ethanol subsidy.  So there‘s one we could probably agree on. 

But, Chris, we as a nation, the House of Representatives just elected

this is the largest change in over 70 years.  And the country spoke decisively that they want spending under control.  They want the government shrunk.  They want the government out of our lives and out of our pockets and we in the House were elected to represent the country.

MATTHEWS:  Sure. 

CULBERSON:  And this last election I think made it clear, Chris, we have got to cut spending, we have got to cut taxes, we have got to grow the economy...

MATTHEWS:  Oh, sure.

CULBERSON:  ... and focus on jobs.  And you grow jobs by cutting taxes. 

MATTHEWS:  Well, let‘s—well, let‘s go back to the facts I submitted to Congresswoman Edwards, which are, 16 percent of the economy is—is revenues going to the federal government and 25 percent is government spending by the federal government. 

So, you‘re spending 25 percent of the economy and only raising revenues from 16 percent.  How do you close that gap while ignoring the revenue side? 

CULBERSON:  It‘s not a revenue...

MATTHEWS:  It doesn‘t make any sense. 

CULBERSON:  Chris, it‘s not a revenue problem. 

My predecessor, Bill Archer, who is now with Pricewaterhouse, had a study done that showed that if you confiscated 100 percent of all income over...

MATTHEWS:  OK.  All right. 

CULBERSON:  Excuse me—all corporate income—no, no, this is important, Chris.  Just a second.

If you confiscated all corporate income, that would generate about $1.3 trillion.  If you confiscate 100 percent of all individual income over $200,000, that will generate about $2.1 trillion.  So, if you confiscated all the money out there, Chris, it generates about $3.4 trillion.

But the annual unfunded liability, Chris, of Medicare and all these other programs grow by $5 trillion a year. 

MATTHEWS:  OK.  Would you reduce the...

CULBERSON:  This is not a revenue problem. 

MATTHEWS:  OK.

CULBERSON:  It‘s a spending problem. 

MATTHEWS:  Let‘s talk about spending.  OK.

CULBERSON:  OK.

MATTHEWS:  If you don‘t deal with revenues, you have got to do it all through spending cuts. 

CULBERSON:  Right. 

MATTHEWS:  Tell me how you‘re going to reduce the spending of the United States government down to 16 percent of the economy from 25 percent?  How are you going to...

CULBERSON:  Well, let‘s...

MATTHEWS:  ... drop the cost of government 9 percent of the U.S.  economy?

CULBERSON:  Right. 

MATTHEWS:  How do you do that without dealing with revenues? 

CULBERSON:  First, we repeal Obama...

MATTHEWS:  How do you do it?

CULBERSON:  Chris, first, we‘re going to repeal...

MATTHEWS:  That‘s not driving up the debt.  We‘re not even spending that money now.  So, that‘s not 25 percent. 

CULBERSON:  Chris—Chris, first of all...

MATTHEWS:  Tell how to do it. 

CULBERSON:  ... we—when we—when we have the presidency in two years, when we have the Senate, we‘re going to repeal Obamacare, first of all, right out of the gate. 

We‘re going to—this—the Ryan budget, which I supported, exempts everybody over the age of 55.  No one 55 years or older is affected by the Ryan budget. 

MATTHEWS:  Yes. 

CULBERSON:  But we have to change Medicare so it‘s solvent for people in the future who are younger than 55.  It‘s not going to be there for you.  If you‘re about probably age 40 or younger, Medicare is gone.  It‘s not going to be there for you. 

MATTHEWS:  How do you pay for the United States military, the United States government, all these entitlement programs, and only spend 16 percent—one and six—dollars of the U.S. economy?  You‘re not being reasonable here. 

CULBERSON:  No.

MATTHEWS:  You know that the government‘s not being financed up to its actual cost level.  That‘s the problem. 

CULBERSON:  Actually, Chris, the problem‘s worse than you just stated. 

If you look at it from the perspective of how much income is brought in every year, we bring in about $2.2 trillion in revenue from all sources every year.  But the government spends $2.3 trillion for Medicare, Medicaid, and Social Security, interest on the national debt...

MATTHEWS:  Right. 

CULBERSON:  ... and veterans benefits.  So, Chris, at the stroke of midnight, if you were to eliminate the entire federal budget, all of it, the Pentagon, all of it...

MATTHEWS:  That‘s my point.  Are you going to do that?  Are you going to eliminate the federal government to balance the budget? 

(CROSSTALK)

(LAUGHTER)

CULBERSON:  Chris, the problem is...

MATTHEWS:  You keep laughing, but you guys don‘t want to talk taxes.

CULBERSON:  Because you keep interrupting me. 

Chris...

MATTHEWS:  No, no... 

CULBERSON:  Chris...

MATTHEWS:  ... because you keep not answering me.

CULBERSON:  ... you‘re a thoughtful guy.  Don‘t—please don‘t interrupt me. 

What I‘m trying to tell you is, the problem is so severe, that we have to look at the entitlement programs and make them solvent.  You can‘t just do it with spending cuts at the Pentagon, or eliminating foreign aid.  That‘s all got to be a part of it, cutting everywhere we can.

MATTHEWS:  Right. 

CULBERSON:  But you have to fix the entitlement programs and make them solvent. 

And my colleague Donna Edwards just said, as all the Democrats are saying, they‘re not even looking, Chris.  They‘re putting blinders on.  They‘re not looking at Medicare or Social Security.  And we must have an adult conversation.

And we were elected in the House to control spending, to cut taxes, to repeal Obamacare, and get the government out of our lives.  And finally, Chris, if we would simply follow my hero Thomas Jefferson‘s advice...

MATTHEWS:  OK. 

CULBERSON:  ... and adhere to core principles, shrink the government, follow the 10th Amendment...

MATTHEWS:  Oh, well, right, OK.

CULBERSON:  ... the knot will untie itself.

MATTHEWS:  You know, the problem is that, once you get down through all your cuts, will you pay for what‘s left is what I‘m asking?  Will you pay the cost of the federal government? 

CULBERSON:  Well, no, Chris...

MATTHEWS:  That‘s all I‘m asking.

CULBERSON:  It‘s not a—Chris, you have to make Medicare...

MATTHEWS:  Can‘t you answer that simple proposition?  Will you pay for what you have to? 

CULBERSON:  Oh, we will, absolutely.  All of us in the Congress want to make sure the nation doesn‘t default on our obligations.  We‘re working hard to make sure that doesn‘t happen. 

MATTHEWS:  Yes, OK.

CULBERSON:  But we cannot raise taxes.  That‘s a job-killer.

MATTHEWS:  OK.  Thank you. 

CULBERSON:  The country elected us to cut taxes...

MATTHEWS:  Thank you, sir.

CULBERSON:  ... and cut spending.  And we‘re going to do it. 

MATTHEWS:  OK.  Thank you, Mr. Culberson, John Culberson...

CULBERSON:  Thank you, Chris.

MATTHEWS:  ... U.S. congressman from Texas.

Up next, the truth about Michele Bachmann‘s former career?  Catch the “Sideshow” next.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL and back to the “Sideshow.” 

First up:  Tim Pawlenty turns hard right.  The 2012 underperformer said yesterday it‘s clear—unclear whether being gay is a choice.  Hmm. 

Here he is on “Meet the Press.” 

(BEGIN VIDEO CLIP, “MEET THE PRESS”)

DAVID GREGORY, MODERATOR, “MEET THE PRESS”:  Is being gay a choice?

TIM PAWLENTY ®, PRESIDENTIAL CANDIDATE:  Well, the science in that regard is in dispute. 

There‘s no scientific conclusion that it‘s genetic.  We don‘t know that.  So, we don‘t know to what extent it‘s behavioral.  And that‘s something that has been debated by scientists for a long time. 

(END VIDEO CLIP)

MATTHEWS:  You know what that sounds like?  It sounds like back in 1998, Trent Lott likened homosexuality to alcoholism and kleptomania.  He called it a sin.  The country has moved lightyears forward on the issue of gay rights.  The big question now, has the Republican Party moved with it?

Finally: resume inflation. 

Congresswoman Michele Bachmann often touts her background as a federal tax litigation attorney, you know, someone who helps you not have to pay taxes?  Well, there‘s more to the story.  According to “The Wall Street Journal,” Bachmann worked for the IRS counsel‘s office from, well, ‘88 to ‘92.  Her main role?  Collecting taxes.  She was the tax man.  A bit ironic, considering her status as the Tea Party leader in Congress.  Hmm.  Changes. 

Up next:  Michele Bachmann is one of two Republican presidential candidates to sign on to a pledge by a religious rights—or religious right group in Iowa that actually suggested that slavery was better for African-American family life than the country is today.  That‘s ahead, believe it or not. 

You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

KAYLA TAUSCHE, CNBC CORRESPONDENT:  I‘m Kayla Tausche with your CNBC “Market Wrap.”

Stocks suffering their worst losses in nearly a month on renewed fears about a European debt contagion, the Dow Jones industrials tumbling 151 points, the S&P 500 giving up 24, and the Nasdaq plunging 57 points. 

Meanwhile, Eurozone ministers were meeting in Brussels today to talk about keeping Greece‘s debt problems from spreading to Italy and Spain, Europe‘s third and fourth largest economies.  European banks trading in the U.S. took a beating as the euro hit a six-week low against the dollar. 

Of course, U.S. banks weren‘t looking any better in the wake of Friday‘s dismal jobs reports and ahead of earnings this week, but the red didn‘t stop there, oil prices tumbling on signs of slowing demand in China.  That dragged energy stocks lower across the board. 

Finally, Alcoa was sharply lower, ahead of quarterly warnings delivered after the closing bell, but soaring aluminum prices helped it deliver earnings and revenue bumps pretty much in line with expectations. 

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

HARDBALL WITH CHRIS MATTHEWS. 

MATTHEWS:  Well, while we‘re heading into nut country right now.

Welcome back to HARDBALL. 

An Iowa conservative group, the Family Leader, wants all the GOP candidates this year to sign a new marriage vow.  And it‘s an attempt to make their point about the significance of marriage.

The preamble to the vow stated—quote—“Slavery had a disastrous impact on African-American families.  Yet, sadly, a child born into slavery in 1860 was more likely to be raised by his mother and father in a two-parent household than was an African-American baby born after the election of the USA‘s first African-American president.”

Well, the organization backtracked finally and took out that language, saying it could be misconstrued.  But that was just the tip of the iceberg for this marriage vow.  So far, Michele Bachmann and Rick Santorum happily signed on as written. 

Richard Wolffe is an MSNBC political analyst, and Shushannah Walshe is a contributor to “Newsweek,” which has Sarah Palin on the cover this week. 

Shushannah—oh, there it is. 

You know, what is it about the instinct on the part of these candidates who are so desperate, like Rick Santorum and Michele Bachmann?  They will sign anything, even this ludicrous claim that an African-American family life was pretty good back in 1860, when your kids were being sold on the block? 

SHUSHANNAH WALSHE, “NEWSWEEK”:  Well, it‘s just unbelievable. 

It‘s another example of just completely incorrect and horrible mistakes in history.  But, also, as you said, it‘s just that every single vow just—and pledge just needs to be signed.  It doesn‘t even seem like either of them have read this—this vow before they signed it. 

MATTHEWS:  Or, worse yet, they did. 

(LAUGHTER)

MATTHEWS:  Supposed they did read it.  Suppose Rick Santorum liked the sound of it, that life was better for African-Americans under Jefferson Davis. 

Let‘s go—I‘m going to Richard on this. 

I mean, this is—this is something.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST:  Right. 

Well, it‘s something.  And how many—can we count the ways of how offensive it is?  First of all, they all pander.  And it‘s interesting that they all want to be leaders.  But people on both sides, they—they sign everything that comes in the door because they‘re so desperate. 

And candidate Obama signed some things he later had to distance himself from.  But this one—this one isn‘t just saying that the family unit was great during slavery.  He‘s saying it‘s even worse now under President Obama.  Which is more offensive? 

MATTHEWS:  Causality.  See the causality?

WOLFFE:  It‘s—yes, but it‘s nonsense, it‘s ridiculous.  But it does speak to some of the same-sex marriage differences, where Republicans are way out of line with independents, Democrats, everyone else. 

MATTHEWS:  OK, here we go.  You have—you have—you have looped into this one.  Here‘s another part of the vow, -- quote—“vigorous opposition to any redefinition of the institution of marriage, faithful monogamy between one man and one woman through statutory, bureaucratic or court-imposed recognition of intimate unions which are bigamous, polygamous, polyandrous, same-sex, et cetera.”

So, Shushannah, they threw in same-sex at the end to polyandrous or polygamous.  And they always keep saying one man, one woman.  Is this about the LDS Church of the old days?  With do they keep throwing in this one-man/one-woman stuff, if not a direct shot against Governor Romney?  Why do they keep doing it? 

WALSHE:  Well—well, it does seem to try to—seem to want to try to create more fear around the Mormon faith in Iowa. 

You know, you‘ll go there and people, there is a lot of fear around Mormonism from a lot of evangelicals and this is just stirring it around even more.  In 2007, I spent a lot of time with Governor Romney in Iowa and you saw a lot of people who said, I like him but I believe it‘s a cult.

Now, the Family Leader, which is an influential group could do the opposite and come out and say, listen, that Mormon people, people that believe in Mormonism also believe in Jesus Christ.  But instead, they‘re trying to stir more of this fear up.

CHRIS MATTHEWS, HOST:  Well, let‘s a look at this.  Rich, you get the next one.  These vows are quite interesting, they get more interesting.

Here‘s one, it talks about marriage.  You know, different sex marriage, heterosexual marriage as being better sex.  Now, it‘s an amazing to have to make this in a promise here.  Quote, “Recognition of the overwhelming statistical evidence that married people enjoy better health, better sex, longer lives, greater financial stability and that children raised by a mother and father together experience better learning, less addiction, less legal trouble, and less extramarital pregnancy.”

Well, throwing in the better sex I guess is just sort of a lark for them.  But why do they have to vow to this?

RICHARD WOLFFE, MSNBC POLITICAL ANALYST:  Just one thing, though, when do the candidates say, why am I signing on for something that promises better sex?  You know, who reads this stuff?

Yes, OK, they‘re trying to be popular about it.  Of course, why would you deny to any group?  You know, same-sex couple, if it‘s such a great thing.  There is plenty of evidence.

MATTHEWS:  Why is selling so hard?

WOLFFE:  I—they are both—the irony is, trying to make this stuff extreme, OK?  Same-sex marriage is some kind of a weird practice, in fact, they‘re only showing their own weirdness with this stuff.

MATTHEWS:  OK.  Here we go to what I think is part of the strangest part of it.  Shushannah, you want to talk about that, going in to this whole question of better sex.  Well, here, let me show you the last one because this is sort of funny, too.  “Recognition that robust child bearing and reproduction is beneficial to U.S. demographic, economic, strategic and actuarial health and security.”

Now, this is—you talk about Uncle Sam getting involved in your life.  And here‘s a right wing group telling you, you should be engaged in robust child bearing.  I guess that means a lot of healthy kids, a lot of robust kids, or a robust number of kids.  I‘m not sure what they mean.  I guess I do.  Shushannah?

WALSHE:  I mean, it is so strange.  I mean, where are the facts and numbers to back this up?  I mean, almost so much of this, these vows, these statements are taken at facts and I mean, the few little facts.  I think it‘s interesting what Richard just said about trying to make these points of the otherness, where same-sex marriage or otherness, and maybe people that are trying to point out about the Mormon faith and the others, when we know that the LDS church banned polygamist marriage over 100 years ago, and it seems to just want to really create more firestorms and more controversy when it‘s unnecessary.

And these candidates want to support of Family Leader because in places in Iowa, with the caucus, it‘s important.  But why should it be?

MATTHEWS:  I just keep saying about old log cabin packed with huge numbers of kids, sitting around the table eating bread and gravy, this huge crowd.  Anyway, just a thought.  I‘m not sure what the image is.

But, anyway, it‘s certainly strange.  This is a religious right.  It‘s called the Family Leader.  It‘s backed by people like Tony Perkins and Family Research and all those people.

Anyway, Richard Wolffe, thank you.  And, Shushannah Walshe.

WALSHE:  Thanks, Chris.

MATTHEWS:  It‘s all part of the passing parade of the fair right.

Up next, speaking of which, Rupert Murdoch, the hero of FOX News and “News of the World,” scandal now in Britain.  That scandal is widening.  It used to cover scandals.  Now, it is one.

There‘s word the tabloid hacked into former Prime Minister Gordon Brown‘s bank account, voicemail, et cetera.  Never stops.  How deep will this go?

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Well, Michelle Obama and Hillary Clinton will travel to California tomorrow to attend the funeral of former First Lady Betty Ford.  Mrs. Ford died Friday at the age of 93.  In the three decades since President Ford left office, the Fords lived in southern California where she famously established the great Betty Ford Center which treated celebrities for alcohol and drug abuse.

Tomorrow‘s service will be near the center and then she‘ll be laid to rest next to her husband at the Gerald Ford Presidential Library in Michigan.  I‘ve been there.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.

“Thank You & Goodbye,” read yesterday‘s final edition of the Rupert Murdoch doomed tabloid “News of the World.”  The paper was forced to shut down amid a widening scandal, including accusations of bribery and phone hacking.  And it‘s getting worst.

Here‘s the latest: “The Mirror” newspaper reports that “News of the World” tried to hack into the voicemails of 9/11 victims‘ families.  Gordon Brown, the former prime minister, alleges that reporters tried to gain access into his family‘s bank and medical records.  Also reports that a royal protection officer accepted bribes in exchange for phone numbers of the royal family itself.

Murdoch this weekend arrived in London as his bid to buy satellite giant British Sky Broadcasting ran into resistance.  Deputy Prime Minister Nick Clegg today called on the media mogul to, quote, “do this decent, sensible thing and reconsider.”

What does all this mean for the Murdoch empire, which includes, of course, FOX News, and its hold on British politics?

Joining us is NBC‘s Stephanie Gosk in London, and ITN senior correspondent Robert Moore here with me.

Stephanie, is this going to be the beginning of the crumbling of the FOX empire?  The News Corporation empire?  Or will they hold up and keep all their people alive on this?

STEPHANIE GOSK, NBC NEWS:  Well, Chris, it might be a little early to predict the demise of Rupert Murdoch‘s empire.  But, certainly, this is chipping away at it.  And what we‘ve seen today is pretty astonishing.

You have the deputy prime minister in this country coming out publicly and giving Rupert Murdoch business advice, telling him essentially, back away from this deal.  You have so tarnished your image in this country in recent days that it just will not be accepted by the government or by anyone else in this country to move forward with this merger, an important merger for the corporation.

MATTHEWS:  But is this Stalingrad?  Is this that time when you try to reach your empire zenith and you‘re beaten and you start to head back yards?  I‘m serious about this.  This guy had to close a major newspaper, which was his founding organ.  It may be junk but it was how he got started “News of the World,” the trash they put out.

And now, he‘s forced to perhaps under the pressure of the British government itself, which he usually had some hand in it himself.

Will he have to break this deal?  Will he have to give up?

GOSK:  Well, it looks like this deal at the very least right now is on hold.  And it could be scuttled all together.  There are people here that are saying that this is just the beginning of end of this merger.

Now, is this the beginning of the end of News Corp?  Well, like I said, it might be a bit early to predict that, but some people are questioning some of Murdoch‘s choices, specifically the fact that he continues to support Rebekah Brooks—one of his executives, who‘s the former editor of “News of the World.”  There have been numerous cries for him to step down and to resign.  He supports her even as “News of the World” closes and all of its employees are fired—Chris.

MATTHEWS:  Well, let me go back to you.

And Robert, thank you for joining us, Robert Moore of ITN.

What do you make of this, this kind of stuff?  Actually, we haven‘t gotten to this level here in this country.  Hacking into the telephone perhaps of Gordon Brown, his bank records, into the family members of 9/11 family victims, getting the royal family‘s phone number.

How do they do this stuff?

ROBERT MOORE, ITN SENIOR CORRESPONDENT:  It‘s stunning, isn‘t it? 

And you know—

MATTHEWS:  Technically stunning.

MOORE:  Absolutely stunning.

And what‘s, you know, most alarming for the Murdoch empire is everyday, it seems to get worse.  These latest revelations about people intercepting the voicemails of Gordon Brown, may be accessing medical records of his sick, very sick son.

MATTHEWS:  Did they feed this stuff to FOX over here?  Did they pedal it over here?

MOORE:  I wouldn‘t go that, Chris.  But, obviously, you know, this is sensational stuff.

MATTHEWS:  Yes.

MOORE:  And my network did some polling, which was fascinating.  It says 80 percent of Britain no longer trusts the media.  But more alarming than that, they don‘t trust the politicians.  And more alarming than that, they do not trust the police to investigate.  That really represents something of a crisis for a kind of British—

MATTHEWS:  Let me go—let me go back to Stephanie.

You know, Rupert Murdoch had a lot of influence in the Reagan administration.  He managed to get his U.S. citizenship during that era.  He does know how to pedal influence.  He knows thousand get inside.

Is that the story that this is an overlay where it‘s not just yellow journalism—it‘s the power of journalists that have influence within governments?

GOSK:  Well, absolutely.  That is the heart of this story.  In fact, you had Prime Minister Cameron talking about this cozy relationship between the tabloids and the politicians last Friday.  And there is a sense that the door has been opened a little bit here.  And people now, politicians specifically, can come out publicly and criticize the tabloids.

There was fear in the past, this is part of the equation, that they were then going—if they came out publicly against a tabloid, that then they would have to face nasty headlines and perhaps investigation into their personal lives.  They also specifically carried favor with the tabloids because getting support from a tabloid could mean success in a campaign.

And right now, you see, an effort in recent days to really go at heart of that power and influence and try to dismantle it—Chris.

MATTHEWS:  Yes, isn‘t it true that “News of the World,” if they didn‘t like your politics, they put a naked picture of you, of the wife or somebody, you know, what you called a topless picture of somebody to humiliate them?

MOORE:  A lot of dirty tricks on that.

GOSK:  Their credibility to put someone‘s head on somebody else.

MATTHEWS:  They put somebody‘s head on someone‘s topless picture.

MOORE:  A lot of dirty tricks were played.  I think the big question tonight really is, can it be contained to the “News of the World”—there are signs that tomorrow, we‘re going to hear that it spread to “The Sun” and potentially to the more reputable “Sunday Times.”  If so, then that is clearly a much bigger deal for the Murdoch empire in Britain.

MATTHEWS:  Well, he‘s been taking news organizations down to the right ever since he got ahold his first one.  That seems to be his reputation, right?  Did he ever improve an organization?

MOORE:  Well, let‘s say that “Sunday Times” did some great journalism.  But now, it, too, is imperiled by these accusations.

MATTHEWS:  Thank you very much, Stephanie Gosk.  And thank you, Robert Moore, for joining us on this story from across the pond.

When we return, “Let Me Finish”—I hope it stays across the pond.  “Let Me finish” with the jobs and what president and his party, the Democrats, should be doing to create more of them.  Not just talking about debt ceilings but the stuff Democrats have always been good at, jobs.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  “Let Me Finish” tonight with a powerful word: jobs.

I spent a great deal of my life working in the U.S. Senate, then the White House, then for a legendary speaker of House.  One thing we concentrated on was jobs.

One of my first jobs, my first job, was working for a senator in Utah.  It was counting up the public works and economic development projects that were shovel-ready if the government would approve them.  Jobs that put people to work doing things that needed doing, not leaf raking but getting roads fixed and bridges up to code, getting sewer and water systems in place.

When I worked for Tip O‘Neill, the Republican leader complained that a jobs bill the Democrats were pushing was make-work.  I simply called the chief engineer in his district and got the names and the addresses of the bridges below code.  The speaker read that list aloud on the floor of the Congress.  It upset the Republican leader but it made a point.

There‘s good work that needs to be done and this is a good time to get doing it.  If not now, when?  The president asked that today about the debt ceiling.  If not now, when?

We could demand the same of our politicians about jobs.  That stimulus bill they passed two years ago ain‘t very stimulating.  Not because it was too big, but because it was a pip squeak.  After you take out the tax cuts in it, the amount that actually goes to job creation, real public investment spending comes about 1 percent of the American economy—

1 percent.  No wonder the stimulus is out of juice.  Never had much to begin with.

I read Paul Krugman‘s column in “The New York Times” today.  He makes a great point.  The government has fewer people working for it than it did when President Obama came into office.  So, we‘ve got no real money going into public works, no money going into public service jobs.  And you‘ve got your explanation right there why we‘ve got a 9.2 percent unemployment rate.

I like the fact that the president is trying to compromise with the Republicans who control the House, but one of the big delusions is always that the truth is smart policy is somewhere in the middle between the two sides being argued.  Maybe we have to go back to the old style partisan politics on this—you know, like getting that list together of all of the bridges below code in John Boehner‘s district or Eric Cantor‘s or Kevin McCarthy‘s.  Maybe the smart policy is the smart politics—put a little heat under their butts.

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

More politics ahead with Al Sharpton.

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