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updated 12/29/2011 12:05:35 PM ET 2011-12-29T17:05:35

Guests: Bob Shrum, Michael Steele, Amanda Drury, Michael Steele, Phillip Dennis, Steve McMahon, Todd Harris, David Edelstein

CHRIS MATTHEWS, HOST: Obama`s workshop.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington on the night before
Christmas Eve. Leading off tonight: The president plays hardball. For
much of his term, some Democrats have worried that President Obama has been
the compromiser-in-chief, that he was more worried about getting along with
Republicans, who didn`t want to get along with him, and that he and his
party were getting rolled in the process.

But his total victory in the payroll tax fight has changed that.
Democrats now see a leader who staked out a position, stuck to it, and got
what he pushed for. The president is making himself now the defender of
the middle class, and that has Democrats a bit more optimistic about next
November.

While the Democrats are feeling more confident and satisfied,
Republicans are angry, confused, and as Charles Krauthammer pointed out
today, look as organized as -- look as organized as that marching band at
the end of "Animal House."

Right into that wall! Anyway, this particular GOP defeat was written
and produced, many believe, by the Tea Party. And many of its members are
as frustrated with John Boehner, the speaker, as he is with them. We`re
going to talk to two Tea Partiers about how the GOP managed to hand the
president a big political victory that could have been theirs.

Plus, Joe Biden stuck it to Mitt Romney in an op-ed piece today,
saying Romney would double down on the very policies -- the economic
policies that actually caused the great recession. We`re going to talk to
the HARDBALL "Strategists" about what Romney and the other Republican
hopefuls need to do between now and the Iowa caucuses, January 3, to seal
the deal.

Also, what Republican who turned down desperate pleas that he run for
president won`t say no when it comes to being a VP? That`s in the
"Sideshow."

And it`s our last show before Christmas, and that means it`s time for
a "New York" magazine -- actually, the "New York" magazine critic David
Edelstein and me to go over out top movies of the year. Many of them have
political messages.

We start with President Obama playing hardball. Michael Steele`s an
MSNBC political analyst and a former chairman of the Republican National
Committee. And he`s dressed in fine Christmas fare.

(LAUGHTER)

MATTHEWS: By the way, new dress code tonight. Bob Shrum, you`re in
your usual suit. I see no sign of Christmas on you, except...

(CROSSTALK)

BOB SHRUM, DEMOCRATIC STRATEGIST: It`s red! It`s red, Chris!

MATTHEWS: ... pink shirt of yours, whereas Michael and I are both in
our...

SHRUM: Red, pink...

(CROSSTALK)

MATTHEWS: We have decked the halls with bows of holly here...

SHRUM: I wouldn`t wear that...

MATTHEWS: ... and you, sir...

(CROSSTALK)

SHRUM: I wouldn`t wear that coat Michael`s got on!

MATTHEWS: OK, it`s not a coat.

SHRUM: He wears it well.

(LAUGHTER)

MATTHEWS: It`s a very sedate zippered sweater!

Anyway, the president signed a temporary payroll tax extension into
law today, and he thanked Congress for ending the political stalemate but
warned there was more work to be done next year. Let`s listen to the
president.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When Congress returns,
I urge them to keep working without drama, without delay, to reach an
agreement that extends this tax cut, as well as unemployment insurance,
through all of 2012.

You didn`t send us to this town to play partisan games and to see
who`s up and who`s down. You sent us here to serve and make your lives a
little bit better, to do what`s right. And fortunately, that`s how this
week ended.

(END VIDEO CLIP)

MATTHEWS: Well, I`m going to let you have this first ball here, Bob
Shrum. It seems to be nice for the president to say he`s above politics,
having just won one of the -- one of the few really big political tussles
of the presidential term.

SHRUM: Oh, sure. Look, Republicans blundered into this. I mean, I -
- the analogy I might use -- I haven`t seen anything this dumb since Custer
got himself surrounded at the Battle of the Little Big Horn. The House
Republicans -- and the Senate tried to stop them, Mitch McConnell tried to
stop them -- took a position that was untenable.

They have helped the president do exactly what he wanted to do. He
doesn`t want this election just to be a referendum on the economy, although
there are signs that it`s getting better. He wants it, as you said
earlier, to be a choice. Who`s standing up and fighting for the middle
class? That`s what came across here.

The polling data has moved very substantially since October on who`s
better on taxes. And quite frankly, the best thing the Republicans can do
when they get back is pass a clean extension of this...

MATTHEWS: Yes.

SHRUM: ... without a bunch of poison pills because that -- they need
to get rid of this issue. They don`t need to relitigate this fight from a
political perspective or from the perspective of the country.

MATTHEWS: Your thoughts, Michael? I`m looking at these numbers here.
We know there`s a 99 percent to 1 percent fight going on in this country.
It seems like he has grabbed the position of the 99 percent here, the
president.

MICHAEL STEELE, MSNBC CORRESPONDENT: Well, Obama took the easier --
the easier route. He got above the fray and the noise and he said, Look,
the American people -- it`s coming up on Christmas, the American people are
still concerned about jobs and the future. And so this is at least a
little bit of something that we can give them to get us to the new year.

The Republicans took -- and I agree with Bob Shrum here. They took a
miscalculated route to nowhere. I mean, it is very much like walking into
that wall. And the reality of it is, they`ve got to come back in January.
They`ve got to do a clean bill because you don`t want to have this argument
again in February and March of next year. The presidential race is under
way. The candidates running for the presidency don`t want to have to do
this dance on this particular issue.

MATTHEWS: Yes, I know. I love the way, by the way, you say the
president took the easy side of being for tax cuts, when your party...

STEELE: Wait! Can you believe...

MATTHEWS: ... takes the easy side, as you put it, on every tax fight
I`ve seen!

(CROSSTALK)

MATTHEWS: What`s wrong with being on the side of the people?

STEELE: Wait a minute. How did the Republicans get on the wrong side
of a tax cut, for goodness sakes?

MATTHEWS: Well, that`s a -- Bobby, you`ve got a point there. I`ve
looked as these numbers that you`ve looked at. Our poll, the NBC poll, the
"Washington Post" poll, show that the middle class is now being defended by
the president. They show on the question of taxes -- just say the word
"taxes" now, and for the first time I can remember, Bob, Democrats win.

(CROSSTALK)

SHRUM: Obama had a slight -- Obama had a slight lead on this in 2008.
But if you go back to October, he was way down. Now he`s ahead pretty
substantially. And what the Republicans did -- and Michael`s exactly
right, it was a road to nowhere. They ended up looking like they were for
tax cuts for the wealthy, but they were against tax cuts for the middle
class. It`s the worst possible position they could put themselves in.

MATTHEWS: Why did they do that? Why does your party do that?

STEELE: I don`t -- I don`t understand...

MATTHEWS: Why do they fight for the tax cuts for the richest
millionaires, and they don`t do it for the people that are working on a
paycheck who get about 40 bucks break in this thing every two weeks? By
the way, the president does play one game here. He says 40 bucks a
paycheck. Well, that`s because people get paychecks every other week.

STEELE: Right. Exactly.

MATTHEWS: He made it sound like every week. But fair enough.

STEELE: Right. But this is the -- this is the reality. Number one,
you`re absolutely right, the president got the upper hand on this.
Republicans played themselves out of position. They took the wrong end...

MATTHEWS: Why?

STEELE: Who knows why!

MATTHEWS: This is what I can`t figure out. Why...

(CROSSTALK)

STEELE: I can`t understand the lack of coordination between the House
leadership, with McCarthy whipping the numbers, to be able to tell the
Senate that the numbers aren`t there for the bill that you`re passing, or
for the Senate to tell the House that this is the deal we need to cut.

MATTHEWS: Could it be that they`re in a rut and they`re used to
voting against anything the president is for?

STEELE: That`s too -- that`s too easy. I don`t think it`s that so
much as it is...

MATTHEWS: Bob, do you think that`s it?

(CROSSTALK)

STEELE: ... coordination that`s not there.

MATTHEWS: Why -- how -- you`re a political analyst, as well as a
progressive, Bob. Why would the Republicans take this position of opposing
a tax cut for absolute regular working stiffs? What is the plus here for
them? I don`t get it.

SHRUM: There is no plus. And what happened, in my view, is that
McConnell made a smart political deal, handled it the way it would have
been handled in any other Congress -- and Chris, you worked there for a
long time, so did I -- any other Congress over the years.

And the Tea Party guys just revolted against Boehner. They put him in
an impossible position. He was about to lose his own caucus. So he kept
walking down the road with them. And then, by the way, several of them got
home, people started yelling at them and they said, We can`t do this. We
have to vote for this two-month extension. So it was a fiasco.

I also think you`re right. The fact that President Obama was for it
meant a lot of those Tea Party folks...

MATTHEWS: Yes. That`s what I think.

SHRUM: ... were going to be against it no matter what.

MATTHEWS: Let`s take a look at "The New York Times." It is reliably
liberal on its editorial page, but look what it said today. It wrote that
the president`s biggest win this week was upending an image of himself that
he was too quick to compromise.

According to "The Times," quote -- here it comes -- "President Obama did
not win much substantively, but he got a lot politically, a big start
toward retiring the perception, fair or not, and even among Democrats, that
in a pinch with the other party, he will inevitably surrender."

Boy, that`s a big turnaround for him. By the way, Bob Shrum, I`m
looking at the backdrop to you, in this spirit of this eve before Christmas
Eve, where`s that poor people`s watering hole you`re sitting in front of?
Where are you?

(LAUGHTER)

(CROSSTALK)

SHRUM: It`s in West Los Angeles, actually, about a mile-and-a-half...

MATTHEWS: Oh, OK.

SHRUM: ... from where I grew up in Culver City.

MATTHEWS: OK. Sorry. I thought you were down south, further down
south.

But let me ask you about this -- this whole question of -- do we have,
by the way -- let`s go to Krauthammer here. Can we look at Krauthammer`s
column? Because he`s a tough, sometimes nasty conservative. Let`s look at
what he had to say today, conservative columnist Charles Krauthammer.

He had the analogy of the day, by the way, to sum up the Republican
Party this week. He wrote in "The Washington Post" and around the country,
quote, "Having finally realized they had trapped themselves, House
Republicans quickly caved." Krauthammer said, "The Republicans`
performance was reminiscent of a scene from the great film `Animal House.`"
By the way, we showed a bit of it and we`re going to show it all right now.
(INAUDIBLE) In the analogy, the Republicans are the members of the marching
band.

Let`s take a look at this great scene from a fabulous movie.

STEELE: Down the alley!

MATTHEWS: Well, I just was wondering who the drum major was!

(LAUGHTER)

MATTHEWS: It wasn`t you, Michael Steele, but it was...

(CROSSTALK)

MATTHEWS: I`ll tell you who looks like the drum major...

(CROSSTALK)

MATTHEWS: ... John Boehner...

STEELE: ... you can`t blame me for this!

MATTHEWS: ... John Boehner. And could it be -- and here`s my
indictment as we end this segment. I have a theory...

STEELE: What`s that?

MATTHEWS: ... that the Tea Party people are so rip (ph) -- I can`t
use the full phrase -- are so rip at everything, not just taxes and
government and the way things are and their families or whatever they`re
mad about today and the way we live, whatever it is. They`re so angry,
they can`t pick a leader. They don`t pick a leader because they don`t like
leaders. And they don`t like Boehner because he`s a leader. And they
can`t pick a presidential candidate they really believe in because they
don`t want to be led, they just want to complain!

(LAUGHTER)

MATTHEWS: And that`s what I think Tea Parties are, complainers...

STEELE: That`s not...

MATTHEWS: ... whiners with big...

(CROSSTALK)

STEELE: I absolutely disagree with that!

MATTHEWS: OK, why can`t your party...

STEELE: And you`re going to...

(CROSSTALK)

MATTHEWS: You have brought those Tea Party people in as your favorite
new allies!

STEELE: Absolutely. I am glad I brought them into the dance. I`m
glad I did because what you`re seeing in Washington is nothing else at the
end of the day, as you`re seeing members of the Congress stand on the
principles that they -- that they ran on...

MATTHEWS: And what are the principles?

(CROSSTALK)

SHRUM: And walk into the wall!

STEELE: Well, that may be, but the fact of the matter is...

(LAUGHTER)

MATTHEWS: What a great -- "That may be"!

STEELE: That may be...

MATTHEWS: I like -- that`s your phrase of the night, "That may be."

STEELE: That may be...

MATTHEWS: They just marched themselves into a wall!

(LAUGHTER)

STEELE: But that -- but that has -- that`s a different -- but that`s
a different argument to make than the principled argument that they have on
spending and the role of government and all of that. And...

SHRUM: But this was about raising taxes on the middle class!

(CROSSTALK)

MATTHEWS: You get the last word here, Bob. My favorite thing about
Michael Steele is, by the way, it`s like when we were kids when we were
playing cowboys and Indians, he admits when he`s hit. You got me!

(LAUGHTER)

MATTHEWS: I love it! He says, You got me! We got him this time!
The progressive forces of America did. Your last thought, Bob Shrum.

STEELE: It`s Christmas. I give you one.

MATTHEWS: Last thought before Christmas Eve, Bob Shrum?

SHRUM: I think that the Republicans -- and let me tell you, Romney
and Gingrich, if he has any chance, but Romney and the Republican
candidates want this thing settled. They want it settled early. They
don`t want it readjudicated. It`s one of the dumbest things I`ve seen in
politics in a long time. And merry Christmas to both you and Michael.

MATTHEWS: OK, by the way, we have...

STEELE: Merry Christmas, Bob.

MATTHEWS: ... him in here -- Shrum`s had a win/loss record which is
fascinating at times, but I got to tell you, Shrummy beat Mitt Romney once.

SHRUM: Yes, he did.

MATTHEWS: But he did have a pretty good candidate, Ted Kennedy in
Massachusetts!

(LAUGHTER)

SHRUM: Yes, I had a fabulous candidate.

MATTHEWS: The late, great. Anyway, thank you, Michael Steele.

STEELE: Thank you.

MATTHEWS: Thank you, Bob Shrum.

STEELE: Merry Christmas.

MATTHEWS: Have a nice time out there in California.

Coming up: With the payroll tax fight over, who`s more upset,
Republicans with the Tea Party or the Tea Partiers with the Republicans?
We`re going to talk to two Tea Partiers themselves about the Christmas gift
it looks like they handed the president.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: The U.S. Justice Department has rejected South Carolina`s
new voter ID law -- wow -- saying it does not protect the state`s minority
voters from discrimination. The department said the new law did not comply
with the Voting Rights Act and that tens of thousands of minority voters
might be denied the right to vote. Good for them.

The Justice Department must approve changes to South Carolina`s
elections laws because of the state`s past failure to protect the voting
rights of African-Americans.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Sometimes it`s hard
to do the right thing. And sometimes it`s politically difficult to do the
right thing. But you know, when everybody called for a one-year extension
of the payroll tax deduction, when everybody wanted a full year of extended
unemployment benefits, we were here fighting for the right things. May not
have been politically the smartest thing in the world, but I`m going to
tell you what, I think our members waged a good fight.

(END VIDEO CLIP)

MATTHEWS: What a normal-seeming person that guy is in the end.

Anyway, welcome back to HARDBALL. That was Speaker of the House John
Boehner yesterday, trying his best to explain the payroll tax deal when he
was asked by a reporter whether or not he had caved. Well, a lot of the
Tea Party Republicans feel Boehner did just that, caved. "Disappointed,"
"horrific," and "bad deal" were just a few of the ways the angriest of
Republicans have described the deal, but not every Tea Partier agrees.

Joining me right now to talk about -- more about the Tea Party`s anger
with Boehner over the deal are U.S. Congressman Michael Grimm, a freshman
Republican who was elected with Tea Party support, and Phillip Dennis, the
chairman of the Dallas Tea Party.

Well, you gentlemen are smiling. Maybe we can be jovial through a
difficult debate here. Nobody agrees on much these days, but let`s talk
about this issue -- taxes, class, all kinds of things involved in here,
fairness.

Let me ask you, Congressman. You`re from New York. Did Speaker
Boehner betray the Tea Party in the deal he cut yesterday and voted on
today, supported today?

REP. MICHAEL GRIMM (R), NEW YORK: No, absolutely not. The speaker
didn`t betray anyone. First of all, you have to remember something. Just
like myself, Speaker Boehner has an obligation to govern, and governing is
not an easy thing to do.

We went into this with good faith. We wanted to push -- that`s why I
got a big kick of your first segment how we`re not protecting taxpayers.
We`re pushing for one year because it`s good policy. Everyone has told me
since I took office in January, Don`t do Band-Aid approaches. Don`t take
the easy way out. Stand up and try to enforce good policy, even though
Washington is broken. And that`s what we tried to do.

Maybe we were naive in taking the president at his word that he really
wanted a year, and maybe I didn`t want to believe that he would just trick
us, but that`s what happened. And the truth is, at the end of the day,
there`s only one loser here, that`s the American people because they did
not get good policy. They got another Band-Aid approach. And talk to any
doctor or any patient, and they`ll tell you, two months for the "doc fix"
is exactly what they asked us not to do.

MATTHEWS: But you`re going to face the same fact in a couple weeks
when you get back, Congressman, won`t you, when you have to vote on the
rest of the year, the rest of the 10 months. It seems to me you`re coming
to the same question. Is it a Band-Aid for 10 months but not for two
months? I mean, if you call everything a Band-Aid, don`t you get stuck?

GRIMM: Well, no. I mean, look, this is common sense. Who`s to say
now that they`re going to agree to a full 10 months? We thought, based on
what the president said -- and his exact words were, It would be
inexcusable not to pass it for 12 months. So that`s what we did. So now
they`re saying 10 months, and I hope they`re sincere. That would be a
better approach, still not perfect, but a better approach.

MATTHEWS: OK. You still have the fight over how to pay for it,
whether to do it with cutting entitlement programs or taxing the rich. Let
me go now to a Tea Partier down in the heart of Texas there in Plano. Is
it "play-no" or "planno," Texas, sir, Mr....

PHILLIP DENNIS, DALLAS TEA PARTY: It`s "play-no."

MATTHEWS: Plano. Tell me about...

DENNIS: It`s Plano.

MATTHEWS: ... your view about -- Plano. Thank you. Were you right?
Was the president right? Well, you don`t think he was right? Was Speaker
Boehner right?

DENNIS: Well, you`re quoting a lot of "Animal House" today, so let me
quote the words of Dean Wurmer (ph). And I think this goes for the gray
(ph), for all of Congress, 0.0. The fact that we`re sitting here
discussing a $40 per pay period rebate to taxpayers is ridiculous when now
our national debt is over $15 trillion, which means that every American
taxpayer owes over $40,000 in national debt. It`s ridiculous, The fact
that we`ve sent the Republicans there to drastically alter and cut the
spending and size of the federal government, and the best that anybody can
do is to come up with a $40 per pay period.

Listen, if I was going to pay for President Obama`s vacation period -- I
calculate it -- I would have to work 100,000 pay periods to pay for his
vacation.

(CROSSTALK)

MATTHEWS: No, I want to go with your principle here. Should we pay
for the Bush tax cut extension for the rich? Do we pay for that with
spending cuts somewhere? Or do we just continue the tax cuts for the rich?
I`m just asking that, going by your principle.

DENNIS: Well, the tax cuts for the rich...

(CROSSTALK)

MATTHEWS: Should we pay for the tax cuts for the rich?

DENNIS: The rich 1 percent pay over 37 percent. They`re taxed
enough. And those are the ones that create the jobs. But that`s not what
-- the premise that you brought me on here, Chris.

(CROSSTALK)

MATTHEWS: No, I just want you to see if your principles are
consistent or not.

DENNIS: Absolutely.

(CROSSTALK)

MATTHEWS: ... they cut the tax rates for the rich, because if we had
39 percent, we would have the Clinton tax cuts back again, and your party,
if it is the Republican Party, has opposed restoring the same tax rates we
had during the very economically excellent 1990s.

Your party`s protecting the rich.

(CROSSTALK)

DENNIS: Wasn`t President Obama today patting himself on the back that
$40 is going to help every American family?

Has anyone ever asked, if American families really need $40 per pay
period, what`s going on? I know what I will do with the $40 that he`s been
asking what I will do with it. I will buy 12 gallons of gas vs. 25 when he
took office. I will buy about a third less food than that.

MATTHEWS: Right.

DENNIS: So what we want Boehner and the Democrats to do and all of
them is to drastically change the way Washington does business. Borrowing
and spending is a nightmare disaster, and it`s about to happen to us like
it`s happened to Europe and Greece.

MATTHEWS: OK. Well, that`s good for a protester. You`re a
protester.

Let`s go back to -- because that`s what your job is.

Mr. Congressman, you`re a member of Congress. You get paid a salary.
You have a staff. You get paid health care. You get paid health care for
your staff. You get staff salaries, all that to be participating in
governing the United States.

That`s a different job than standing with a placard out in Texas.

GRIMM: Absolutely.

(CROSSTALK)

MATTHEWS: Well, tell my why it`s different.

GRIMM: So, go ahead, your question.

MATTHEWS: I`m asking you the question. What`s the difference between
being a protester as a member of the Tea Party, a supporter of it, and a
member of Congress who represents principles of the Tea Party, but has to
make the government work?

GRIMM: Well, I think by doing exactly what I have been doing. I
don`t understand your question.

I don`t stand outside with placards. I go to work every day and I
work for the American people trying to bring some change to Washington.
Washington`s broken. And, you know, as far as the Tea Party is concerned,
although I`m not a member of the Tea Party, I do support their ideals of
getting our debt under control and getting the size of this government
under control.

It is completely out of whack. Washington`s upside-down. People
voted for me because they want me to go there and try to change things. I
just tried to change things with this vote, saying that one year was better
policy. And look what happened. Politics prevailed. So, all the rhetoric
in the world can continue to be espoused.

MATTHEWS: I`m with you. I`m against rhetoric. Let me ask you this.

(CROSSTALK)

GRIMM: You`re against rhetoric. It`s your business.

MATTHEWS: Well, no, you can say that. You can always make fun of
somebody.

Look, here`s the question. It looks to me the only way you cut a deal
in Congress and get it signed by the president, who is a Democrat, who
disagrees with you, is to reach a compromise. Why don`t you go with a big
compromise, a big set of spending cuts if you can get them with some kind
of revenue increase for the better-off people, rather than just have this
roadblock where nothing gets agreed upon?

GRIMM: Well, that`s why I`m part of something called the Go Big
Caucus. There`s 145 of us, bipartisan, bicameral, sitting down three, four
times a week to discuss exactly that.

We need to have a plan to go big. We have got to control this debt.
And for the purpose of the discussions, everything`s on the table. We`re
working bipartisan across the aisle, and so far that`s going very well.
And I`m very hopeful that we`re going to be successful in a deal that makes
sense for the American people.

At the end of the day, I answer to Staten Island and Brooklyn and to
the American people. There`s nothing I wouldn`t do for this country, but
we have to accept the fact that there are limitations on what the
government can do. Big government is not the answer. And we cannot
continue to spend money that we don`t have. These are the realizations.

(CROSSTALK)

MATTHEWS: I`m with you, by the way, if you get that done.

GRIMM: Great.

MATTHEWS: I do want that done. By the way, I love the part of the
country you represent. I love Staten Island and I love Bay Ridge.

GRIMM: Thank you. So do I.

MATTHEWS: You got Bay Ridge, too, right?

(CROSSTALK)

GRIMM: I do. I have Bay Ridge, Dyker Heights.

(CROSSTALK)

MATTHEWS: Irish-Italian, great crowd up here.

(CROSSTALK)

MATTHEWS: Let me go to Phillip Dennis.

All right, sir, do you think that would be a good thing for America to
get past all this sort of pissant approach with these little-bitty deals
that don`t even work, to some big deal, where you have big cuts in
entitlements down the road, big cuts in the debt down the road, reduction
of the debt, but you have to have some revenues on the rich, or the
Democrats will never sign the deal and you will never get anything done?

Do you want the deal or no deal?

DENNIS: I think everything`s on the table. We have never said that
we are totally anti-tax. But the problem is we have been almost 1,000 days
since...

(CROSSTALK)

MATTHEWS: We will never get anything done.

DENNIS: No, no, excuse me, that we have been almost 1,000 days since
Harry Reid and the Senate passed a budget.

For one thing, that`s against the law. The second thing is, we don`t
want to spend any more money because we don`t trust Washington with our
dollars, Chris, and you can make fun of Tea Partiers and say all we do is
hold placards.

But I can tell you this. Every day, my behind is getting up and going
to work to pay taxes for this country. The last time I took a vacation was
five years ago. So that totally pisses me off that you would sit there and
say that all I`m doing is holding up placards down here.

MATTHEWS: Well, that`s a good argument.

(CROSSTALK)

MATTHEWS: But are you for getting something -- are you for getting
something done or just protesting?

DENNIS: No, absolutely not. What I`m doing is working to elect
people who will hold fiscally conservative values.

You want to know what will make the Tea Party happy, is for our
federal government to spend no more money than it takes in, in revenues.
President Obama -- as bad as I did not like President Bush from a fiscal
standpoint, Obama has increased our national debt $4.5 trillion in three
years. You don`t seem to have any problem that we have got trillion-dollar
deficits every year.

How long could you run your household like that, Chris?

(CROSSTALK)

MATTHEWS: I have a problem with the fact that the government taxes 15
percent of the economy and spends 25 percent of it. I would like to see it
go down to 20 percent, a little above 20 percent and cut a deal that
actually got it down from 25 percent of GDP.

You guys on the right just argue and yell and hold placards, and it
never gets below 25 percent because you won`t cut a deal that gets it down
to 20 percent. And, by the way, the American people will not live with it
being 15 percent, because they`d like to have a military and they would
like to have a Social Security system and they would like to have a
Medicare system.

And if you don`t want all three of those systems, you`re not in step
with the American people.

Anyway, who are you for, Mr. Dennis, for president?

DENNIS: Ronald Reagan.

MATTHEWS: Well, he`s not around. Who are you for now?

(CROSSTALK)

MATTHEWS: That proves where you`re at, sir.

(CROSSTALK)

MATTHEWS: Well, who do you want to lead this country?

DENNIS: The Tea Party doesn`t endorse candidates. And I haven`t made
up my mind yet.

MATTHEWS: Well, give me a couple guys you`re thinking about.

DENNIS: I would like to have seen Jim DeMint run. He seems to have a
little bit of sense, or maybe Mike Lee, maybe -- I like Marco Rubio.
They`re very young, but they seem to have some conservative ideas.

MATTHEWS: OK. Thank you for that.

By the way, where are you at, Mr. Grimm, from Staten Island and Bay
Ridge? Who are you for?

GRIMM: Governor Mitt Romney 100 percent.

MATTHEWS: OK. We know where you stand.

(CROSSTALK)

GRIMM: He`s got what it takes. He has the experience, and he`s the
only one that`s electable.

MATTHEWS: OK. I think Rubio might be a good candidate in a few
years, anyway. I agree with you on that one.

Thank you very much.

DeMint, forget it.

Anyway, Congressman Michael Grimm, Phillip Dennis, thank you.

Up next, who turned down a run for president, but is now opening a
door to being a V.P.? I love this thing if it happens just for sheer
sport.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. Now to the "Sideshow."

Will he or won`t he one more time. Did you think the Chris Christie
2012 speculation would end when it was confirmed that he wouldn`t be making
a White House run? Well, you`re forgetting that the Republican nominee
needs a running mate. And, surprise, it`s not a yes and it`s not a no from
the New Jersey governor, Chris Christie.

Here`s how Christie responded when asked if he would be up for a
Romney/Christie ticket.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I think it`s presumptuous to do
that. Running for president, that`s my decision and Mary Pat`s decision
alone. We decide that. Vice president`s the decision of only one person,
whoever the nominee of your party is. And I think it`s awful to say I
won`t do something when it hasn`t been offered.

The fact is, if Governor Romney comes to me and wants to talk to me
about that, we will have a full, complete conversation about it, and then
Mary Pat and I will make a decision about what we want to do with our
future.

(END VIDEO CLIP)

MATTHEWS: Wow. Christie makes sense obviously as a running mate to
Romney. And of course he`d take it.

And, finally, get out the vote? Newt Gingrich may be on the final
stretch of pushing for votes in the early primaries and caucuses, but this
is not the first time Newt has found himself knocking on doors in the lead-
up to an election. Get ready for this one and a laugh.

Here`s a slightly younger version of Newt hitting up a Georgia
Domino`s Pizza place back in 1992. Suffice it to say, he didn`t exactly
strike a chord with the employee he was working here. Let`s watch.

(BEGIN VIDEO CLIP, 1992)

REP. NEWT GINGRICH (R), GEORGIA: How are you doing? This is not a
robbery. I`m Newt Gingrich.

UNIDENTIFIED MALE: Hi. How you doing?

GINGRICH: And I am the congressman now for this area under
reapportionment. So, I just wanted to come by for a minute and ask you to
consider voting for me. I will be the only Newt Gingrich on the ballot.

Are most of your calls in evenings or on weekends, or what is the
pattern?

UNIDENTIFIED MALE: Friday night is probably the busiest time.

GINGRICH: That`s the big time? That`s great.

Well, I`m -- I`m the House Republican whip and the second-ranking
leader. And I will be running again this summer. And since I`m going to
be the only guy with a name like Newt Gingrich on the ballot, I thought I
better get out here personally.

But what`s your name?

UNIDENTIFIED MALE: John (INAUDIBLE)

GINGRICH: All right, John Goodwin (ph). Good to see you, John. Take
care.

(END VIDEO CLIP)

MATTHEWS: Well, I don`t think he wowed that guy. Wouldn`t it be
better with Newt wearing the apron?

Anyway, what next, what do the Republican hopefuls need to do between
now and January 3 this to win the Iowa caucus? And isn`t it amazing?
We`re here. It`s starting January 3. We are going to ask the HARDBALL
strategists how it looks.

And at the top of the hour on "POLITICS NATION" with Al Sharpton,
stick around for the best -- actually, the first annual Revvie Awards.
Guess what they`re named after and who?

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

AMANDA DRURY, CNBC CORRESPONDENT: I`m Mandy Drury with your CNBC
"Market Wrap."

The Dow jumping 124 points today, the S&P 500 gaining 11, and the
Nasdaq up by 19. The Commerce Department says new homes rose 1.6 percent
in November. Sales so far are way below last year`s depressed levels,
which means that 2011 will likely shape up as the worst year ever for home
sales.

Elsewhere, consumers were conservative about spending last month,
according to the Commerce Department. It rose 0.1 percent. Incomes were
also only up slightly.

Meanwhile, orders were durable goods were up strongly, rising 3.8
percent. It was the biggest gain in four months. Orders for big-ticket
items like aircraft were the key barometer of business spending.

And if you`re hoping for a pair of Nike Air Jordan Concords, you`re
likely to be out of luck. The highly priced shoes went on sale for $180
and then very quickly sold out. Nike.com was cleaned out in just an hour.
They`re now selling on eBay for about $600.

And that`s it from CNBC, first in business worldwide. Have a happy
holiday, everybody -- now back to HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

In less than a week now, I will be in Iowa with the rest of us
bringing HARDBALL to you live from Java Joe`s in Des Moines, Iowa. We`re
in the homestretch right now in a race that`s seen candidates obviously
shoot up and flame out one after another.

Here goes. Since September 1, Ron Paul`s had a steady climb. That`s
the yellow line on this chart going from 11 percent at the start of
December to take the lead now. That`s Ron Paul in the lead with nearly 24
percent, about a quarter of the vote for Ron Paul, the libertarian.

Mitt Romney represented by the pink line here on this chart has been
rising through December, but seems to have stalled there. Look at that,
how it`s flattened out there in the last several days, stuck at about 20
percent. That`s always been Mitt`s problem, getting above 20-some percent.

Newt Gingrich, the green line, look at that. It`s dropped like a
stone since his 31 percent peak in December 11 earlier in the month. Now
he`s in third place at 17 percent, but with a slight uptick now, a bit of
an uptick recently. So he may be on the comeback.

Now to the second bracket of candidates, who are the most interesting
right now, the ones for whom this is really sudden death, the ones who
appeal to Iowa`s evangelicals and staunch Republicans, the ones, as I said,
with the potential to surprise us on January 3.

Look at Rick Perry there. He`s been gaining strength in December,
despite all his mistakes in the debates. And that`s the blue line. Look
at him creeping up there, doubling his support from 6 percent up to 12
percent, which means he`s in winning territory all of a sudden.

Bachmann, the black line, had a small surge, but she`s now right about
where she started the month. So she`s not going anywhere, 8 percent. Rick
Santorum, who has visited all 99 counties in Iowa, is on the rise, nearly
doubling his support from 4 percent, but only up to 7 percent.

Now, as I said, this is crunch time. How do these candidates pull off
a win, I mean really a win, or a surprise finish that gets a big second
headline on January 3?

And that`s a question for the experts.

Steve McMahon is a Democratic expert, and Todd Harris is a Republican.

Let`s go.

Steve, I want you to look at this quite coldly from the other side
across the other aisle. What do you see happening there? In terms of, if
we`re going to do the old Bill Schneider one, two, finish now, win, play,
show, like in a horse race, what do you see as the win, place, show January
3 at night, when we`re all sitting around trying to figure this thing?

STEVE MCMAHON, DEMOCRATIC STRATEGIST: Well, as you know, Chris,
momentum in these things and steady, consistent movement is the most
important thing.

So you have to like Ron Paul`s chances. The fact that Mitt Romney got
25 percent four years ago in Iowa and he is at 20 now indicates that he`s
got perhaps a little bit of room to grow, but not very much.

The people who are moving and the most interesting are Newt Gingrich
who is moving in the wrong direction, having lost 14 points and I think
Newt could actually slip here from third to fourth.

And Rick Perry who is coming up on the strength of an appeal that`s
directly aimed at those Christian and evangelicals you just talked about.
And he seems to be moving. His message right now and his advertising is
all about being a Christian and what that means. Christian values,
Christian upbringing.

CHRIS MATTHEWS, HOST: Yes.

MCMAHON: It`s just a very, very blatant appeal. He`s not talking
about the economy or jobs or any of the issues that poll very well.

MATTHEWS: All right.

MCMAHON: He`s talking to a narrow group of people.

MATTHEWS: He`s not talking about competence or anything else, he`s
talking about values. Yes. That`s smart.

So, you say the big winner -- the headline will go to Paul and the
second headline will go to Perry, you think? The one that says strong
showing by Perry? That kind of thing.

MCMAHON: That`s what I think right now. The only caveat to that is
Santorum who is also moving -- one of the hardest thing in politics is the
second act. People made a judgment about Perry and they tossed him off the
top of the heap, and it`s harder to come back than it is to rise.

So, I would watch those two. They`re the most interesting story
lines right now.

MATTHEWS: That`s Perry and Paul? Paul being --

MCMAHON: Perry and Santorum.

MATTHEWS: Oh, Santorum, as well.

MCMAHON: But -- yes.

MATTHEWS: I got you.

OK. Here, you`re picking Ron Paul to win the libertarian, to win the
Iowa caucuses. H doing strong now. And for Perry and Santorum to make the
noise on the outside.

Todd, you`re the Republican, you`re the insider here. You know these
guys. I think you also have candidate you`d like to see be the nominee
because you want to win in November.

But that aside, that aside, let`s try to look at this coldly. Is
Steve right that Paul will probably be the winner January 3rd that night?

TODD HARRIS, REPUBLICAN STRATEGIST: You know, I think Steve could be
right. I`m not going to say like I normally do that he`s flat out wrong.
I think that Romney is probably going to eke out a win.

But I do think that Paul -- I do think that Paul is going to do
incredibly well and certainly better than he did getting 10 percent of the
vote four years ago.

And I agree with Steve, in fact, I would say even more so. I think
Rick Santorum is the most undervalued stock in this entire caucus race. He
has been as you said before to every single county in Iowa. He has been
talking about values like Perry is doing, only Santorum`s been doing it
from day one, and probably most important organizationally, he has
inherited big chunks of the Huckabee machine from 2008 -- particularly the
home schooler network, which is incredibly well organized, and those people
turn out in caucus, on caucus day.

MATTHEWS: Look at this thing in "The New York Times" today, Nate
Silver, who we watch all the time. He said, historically, most of the
candidates who have beaten the polls by a wide margin on caucus night have
been staunchly conservative.

Back to you, Steve. It looks to me like if you say that, then you
guys both have a handle on Santorum or Perry because the real conservatives
in the race on moral issues, social issues like abortion rights and same
sex, they get underpolled, they don`t seem to talk up or get picked up by
the pollsters but show up on cold nights in Iowa -- Steve.

MCMAHON: That`s exactly right. Pat Robertson, as far back in 1988,
got 25 percent of the vote. You remember Alan Keyes and Gary Bauer, they
got 25 percent. And then Mike Huckabee got 34 percent of the vote in the
Republican caucus last time.

So, it`s the silent and very, very powerful and well-organized
majority of Iowa Republicans, at least those who show up for the caucuses.

And that`s why it makes so much sense to look at what Rick Perry`s
doing right now. He`s not talking about the economy. He`s not talking
about jobs. He`s talking about Christian values.

MATTHEWS: OK. I find this fascinating, Todd. If you`re talking the
cultural conservatives doing well out there, right? Yes or no? The
cultural conservatives like Perry and especially Santorum?

HARRIS: Absolutely. Absolutely.

MATTHEWS: OK. So interesting in a time that everybody else in
America is talking about the economy, that Iowa`s going to send this
message about religion and culture.

I think Iowa may lose its power politically if they do that this
time, because the country`s looking for economic action, not so much moral
action rightly or wrongly, we`re a secular country right now. And we have
been.

Anyway, thank you, Steve McMahon. And thank you, Todd Harris.

Up next, HARDBALL`s going to Hollywood right now. I`m going to tell
you my picks for the top movies of the year, at least among the ones I`ve
seen. I`ve got some real favorites. We`ve got a real expert coming up
here, by the way, from "New York" magazine.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: 2012 may be the year of the unaffiliated voter. More than
2.5 million voters have left the Democratic and Republican Party since the
last election in 2008, while the number of independent voters continues to
grow. That`s according to a new "USA Today" analysis of state voter
registration statistics.

In the eight swing states, the registered voters by party, Democrats
registration is down by 800,000, Republicans down by 350,000. Meanwhile,
independents have gained 325,000.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

It`s the end of the year, and time for one of these segments I most
look forward to as a movie buff and a political buff, of course, the best
movies of the year.

Three of my favorites tackle some big topics, race and ethnicity, in
America`s always a hot topic, money right now, of course, and American
culture. We all read books, actually.

I`m joined by David Edelstein, who`s the film critic for "New York"
magazine to talk about my picks here.

Thank you, David.

DAVID EDELSTEIN, NEW YORK MAGAZINE: Thank you.

MATTHEWS: Let`s go to one of my favorites this year. I haven`t seen
them all like you have. Let`s go to "The Help." It`s the pivotal scene
where Emma Stone`s character, she`s the young wife reporter, or journalist,
and it`s the seed for the book, she`s going to write what it`s like about
being a black maid working for these white families during the civil rights
fight. Let`s watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I want to interview you about what it`s like to
work as a maid. I`d like to do a book of interviews about working for
white families. To show what it`s like to work for, say, Elizabeth?

UNIDENTIFIED FEMALE: You know what she`d do to me if she knew I was
telling stories on her.

UNIDENTIFIED FEMALE: Well, I was thinking we wouldn`t tell her. The
other maids would have to keep it a secret too.

UNIDENTIFIED FEMALE: Other maids?

UNIDENTIFIED FEMALE: Well, I was hoping to get four or five. To
show what it`s really like in Jackson.

(END VIDEO CLIP)

MATTHEWS: Unbelievable movie. You know, I know the controversy
about this movie, David. I -- I don`t know. I trained for the Peace Corps
down in the Deep South, you know, the civil rights -- the pre-civil rights,
the Jim Crow stuff down there, the whites-only signs and the laundry mats,
and the I saw the whites-only signs going up in Florida when I was a kid in
college and all that.

I got to tell you -- that`s the only thing I know about the South.
But let me tell you, this movie just grabbed me. Your thoughts?

EDELSTEIN: Well, I think that there was some controversy, a lot of
it had to do with some African-Americans who said it didn`t represent their
experience, in fact, it was much worse.

As a white person, though, somebody whose parents were professionals
and raised -- you know, had live-in help, African-American and Caribbean
American, it certainly struck me right in the heart. I loved the people
who lived with us, but did I know them? Did I have empathy for them? Did
I understand their experience?

Any movie that makes us see the world through someone else`s eyes and
maybe question the social system -- I don`t want to sound like a Marxist,
but question the system in this country, I think can`t be a bad thing.

MATTHEWS: What about Viola Davis winning best actress for Academy
Award. Can she win it?

EDELSTEIN: Well, she can. I happen to love Meryl Streep`s
performance in "The Iron Lady." Viola Davis is --

MATTHEWS: But that`s like a cliche. You like Meryl Streep`s
performance.

EDELSTEIN: I know, another darn accent and all that.

But, listen, let me say about Viola Davis -- what`s wonderful about
her is that she is hard. You notice from that clip, she has this very,
very tough facade. I think that`s more representative of what it`s like
for people --

MATTHEWS: I loved it. I think --

EDELSTEIN: -- what it was like for people working in the South than
the sort of --

MATTHEWS: Dignified contempt. I love it.

EDELSTEIN: Yes.

MATTHEWS: Dignified contempt for the system and for the whites that
she had to deal with.

EDELSTEIN: Exactly.

MATTHEWS: Here`s the great book, here`s a cheap movie, I love it
because it was the remind me of "High Noon." It was real time movie,
"Margin Call" -- a simple movie, thank god, about Wall Street hell. Here
it is -- how the movement spread around the world. Look, here`s "Margin
Call." It hits theaters with its cast of investment bankers. It was a CYA
mission, a bunch of bad guys and sort of average guys defending themselves.

Here`s Kevin Spacey, the midlevel guy talking about a group of
employees who just survived a massive round of layoffs. Let`s watch.

(BEGIN VIDEO CLIP)

KEVIN SPACEY: Eighty percent of this floor was sent home forever.
We spent the last hours saying our goodbyes. They were good people and
they were good at their jobs, but you were better. Now they`re gone.
They`re not to be thought of again.

This is your opportunity on every floor of this building and every
office from Hong Kong to London, same thing is happening. By the time
we`re done, three of every seven guys who are standing between you and your
boss`s job are gone. That is your opportunity.

(END VIDEO CLIP)

MATTHEWS: David, I loved it because it explained the hell of Lehman
Brothers, simply about deception, selling bad product to good people so you
don`t get hurt.

EDELSTEIN: Yes. I mean, what`s interesting about this movie, you`re
not on the side of Occupy Wall Streeters or Zuccotti Park, or whatever.
You`re up there in the tower. You`re actually looking at it through the
eyes of these people who see the equivalent -- it`s like a disaster movie
of an asteroid coming right at them. The asteroid in this case being the
"Margin Call," that`s going to expose all their assets essentially
worthless.

MATTHEWS: OK.

EDELSTEIN: You`re on their side. You see -- you see why -- it`s not
-- it`s about how people can do evil. You understand, they all take the
money. Faced with a moral choice, they all take the money.

MATTHEWS: Right.

Well, my other favorite movie, because I`m a Hemingway buff, like
everybody else who reads books and Hemingway and Fitzgerald -- I loved
"Midnight in Paris." I thought it was his best movie, Woody Allen since
"Manhattan ".

Your thoughts quickly, 10 seconds, David Edelstein.

EDELSTEIN: It was great. It was great. He`s always -- Woody Allen
has always wanted to be anybody but Woody Allen, who`s always wanted to
live anywhere. He goes back in time. He sees this enchanting period, yet
there`s this vein of melancholy about what it means to just live in the
past.

MATTHEWS: Who wouldn`t want to go back there? I would love to go
back to the early `20s to Paris, be with those guys, Fitzgerald and
Hemingway, just like him, like Woody Allen.

Anyway, thank you, David Edelstein. I wish we had more time.

EDELSTEIN: Thank you.

MATTHEWS: You are great, sir. I love your values and your smarts.

EDELSTEIN: Thank you so much.

MATTHEWS: When we return, ""Let Me Finish" with my thoughts about
the spirit of holidays and joy of Christmas, which always comes wrapped in
our childhoods. Think about it. It comes wrapped in our childhood each
year.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: "Let Me Finish" tonight with this:

On this night before Christmas Eve, I want to wish everyone watching
a warm -- and if you`re really fortunate -- a wondrous time this Christmas.
I was fortunate to grow up with wondrous times in Christmas.

I remember the excitement that led through all the days this time of
year. There was the school pageant in first grade when we all had parts to
play in the Christmas pageant. We would gather in the auditorium where a
huge baby boomer class had school each day. We were a class that was so
big, by the way, we couldn`t get into a regular classroom.

I remember mom and dad taking us downtown in Philadelphia to shop for
Christmas presents, especially to see the real Santa Claus, who was always
at Wanamaker`s.

I remember midnight mass that my parents went to and left me and my
brother behind a baby sitter or other brothers. We were allowed to open
one present -- it was a book I`d get each year from my grandmother, a
biography of some great American. And there is no doubt it was one of the
reasons I thought about writing a book I`ve written about Jack Kennedy.

And a lot of people I`m sure out buying that one for Christmas. I
hope a lot more do tomorrow. It`s one of my happiest achievements. I`m
glad to be saying, by the way, bringing a good feel about our country back
and a good time back in these very difficult times.

I remember like most of us truly believing in Santa Claus, and
thinking I saw, in fact, the sleigh riding past our window one night, our
bedroom window. And, of course, I remember the excitement of going to bed
and wanting to get up with my brothers to see what he`d brought, Santa
Claus, the next morning. There was so much magic in those days, growing
up. Even though watching television and listening to all the commercials.

Today, I like more than anything, just going into big stores, big
department stores this time of year, the big stores where you hear of
music. And, by the way, Johnny Mathis seems to be bigger than ever this
Christmas. I don`t know why, but he is. And I hope all of you, especially
people who are fortunate to grow up like I did, loving Christmas more than
any time of the year, to get some of that old Christmas feeling back this
year.

One last thought, when you bump into me somewhere, anywhere like in
an airport or on the street, I only say this once a year, don`t forget to
say hello. This isn`t a one-way deal, by the way, doing this show. I love
knowing you`re out there. I love it even better, when you let me know it,
letting me know you like getting together every night and caring, as we do
together, about our country, how it`s doing. And more important, how we
can make this country of ours even better.

And that`s HARDBALL for now. Thanks for being with us.

And all of you out there, merry Christmas -- merry Christmas to
everybody watching, and everybody you care about. And, of course, happy
Hanukkah as well, happy holy season to everyone.

"POLITICS NATION," by the way, with Al Sharpton, my good colleague --
I love to call him that with a British accent -- starts right now, my
colleague.

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

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