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updated 1/26/2012 2:06:14 PM ET 2012-01-26T19:06:14

Guests: Chuck Todd, Chris Cillizza, Tyler Mathisen, Rick Tyler, Joan Walsh, Kimberly Dozier, Robert Baer, Pia Carusone


CHRIS MATTHEWS, HOST: Storming the Bastille.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington. Leading off tonight:
Keep your enemy close. President Obama`s State of the Union address was
first and foremost a campaign speech, a campaign against one man, Mitt
Romney. The president`s assault on economic unfairness was the storming of
the Bastille against the special tax breaks of a guy who makes more in a
single day than most people make all year and still wants more tax breaks
for people like him. The message is stark. The campaign is on: Get
Romney. And it`s where we start tonight.

And even though the president`s speech sounded like a point by point
attack on Mitt Romney, it`s Newt Gingrich who`s surged since last week.
New poll numbers show a dandy Republican race shaping up in Florida next
week, full of fun, like Newt Gingrich spinning his tryst with Callista as
an event that makes him, quote, "more normal than somebody who wanders
around seeming perfect." Those are his words.

Also, if you watched closely last night, you might have heard
President Obama say this to Defense Secretary Leon Panetta.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good job tonight! Good
job tonight.

(END VIDEO CLIP)

MATTHEWS: "Good job tonight." I`ll say! It turns out that the
president was talking about the daring rescue mission by Navy SEALs to free
an American woman kidnapped by Somali pirates. Tonight, Jessica Buchanan
is safe and sound, and we have the incredible story of her rescue.

And Gabby Giffords`s official resignation from the House today. It
was a deeply emotional scene on the House floor that few who saw it will
ever forget.

Finally, "Let Me Finish" with those brand-new tapes from Jack Kennedy
that show his conflict over Vietnam right to the end.

We begin with the president`s populist speech last night targeted
sharply at quarter-billionaire Mitt Romney. Chuck Todd`s NBC`s chief White
House correspondent and political director, and Chris Cillizza is managing
editor of Postpolitics.com and an MSNBC political analyst.

Anyway, Mitt Romney might have well have been sitting in the House
gallery, like they always put those people up there for the president,
watching the address because his message, the president`s, was a clear
signal of what the Obama campaign`s attack will be on the former governor,
if he`s the nominee.

And it was a theme the president repeated again today in Iowa. Let`s
listen.

(BEGIN VIDEO CLIP)

OBAMA: We need to change our tax code so that people like me and an
awful lot of members of Congress pay our fair share of taxes. Tax reform
should follow the Buffett rule, if you make more than a million dollars a
year, you should not pay less than 30 percent in taxes. Now, you can call
this class warfare all you want. But asking a billionaire to pay at least
as much as a secretary in taxes? Most Americans would call that common
sense.

(END VIDEO CLIP)

MATTHEWS: You know, I`ve said before it sounds like one of our ads
here with "Leaning forward." The fact is, it does sound like common sense.
How does the other side defend against a direct shot against a quarter-
billionaire, a guy worth $250 million, who`s paying 15 percent or less in
taxes and who`s campaigning to pay less?

CHUCK TODD, NBC POLITICAL DIR./WHITE HOUSE CORRESPONDENT: Well, and I
think that -- this is the fundamental problem Romney has. And we can get
to that. He needs a bigger idea. He needs a bigger idea that the middle
class can wrap their heads around about why he`s going to fix this
economy...

MATTHEWS: But why does he...

TODD: ... that`s bricks and mortar...

MATTHEWS: ... need a tax break? How does he make the case...

TODD: Well, and that`s just the problem.

MATTHEWS: ... that he needs a tax break?

TODD: He did a tax plan. He didn`t do an economic plan when he did
this thing. And I think that, basically, what team Obama did -- you know,
the White House, the campaign, however we want to call this -- but what
team Obama did was sort of expose that. He`s messing around with numbers.

MATTHEWS: OK...

TODD: He`s messing around with his tax form. He`s messing around --
and saying, Let`s hope, if I cut these taxes, they`ll create jobs. And I
think this is -- this is now -- Obama exposed this, and frankly, so was
Gingrich a little bit.

MATTHEWS: Gingrich (INAUDIBLE)

TODD: Romney needs to figure this out.

MATTHEWS: OK...

TODD: He`s got to come up with something bigger.

MATTHEWS: Chris Cillizza, I don`t know if you believe in luck. I do.

CHRIS CILLIZZA, POSTPOLITICS.COM, MSNBC POLITICAL ANALYST: I do!

MATTHEWS: I look at the guy who ran against Alan Keyes for the United
States Senate because the other two guys who were going to run against him
in Illinois had marital problems right before the election. He ends up
with a guy being parachuted in and didn`t have a prayer.

Now he`s running against -- well, Newt Gingrich is in there doing the
blocking for him, attacking the probable, I can still say, I think, still
going to be the nominee, Romney, destroying him for basically being the
very thing that Obama says he is, an aloof, elitist bad guy. And there he
is, having that guy do the dirty work for him. And then the guy has to put
his tax returns out the very day of the State of the Union, admitting he`s
paying even less than we thought he was, even less than 15 percent.

CILLIZZA: Well, you know that old -- it`s better to be lucky than
good, Chris. That`s triply true in politics. I would go back even further
with Barack Obama. His first race for state senate, he got in because the
woman he was replacing who decided to come back and run got disqualified
from the ballot. So yes, this is someone who -- he`s quite skilled, he`s
also pretty lucky in the right place at the right time.

To Chuck`s point, I think that we`ve long thought, Well, Romney`s
probably the best nominee Republicans can put forward. He`s got the
organization, raised the money. He can make the economic argument. But
there is an Achilles heel that exists there, at least today, if Romney is
the nominee, and that is this is a person who makes vastly more than the
average person.

And it`s not even in wages, Chris. That`s the thing. I wrote about
this a couple days ago. Mitt Romney`s problem is that his tax -- his
financial life is exotic -- Swiss bank account, account in Grand Cayman.
He made $21 million without making any wages in 2011.

All of those things -- all of those things are not things that the
average person sitting at home, filling out their tax forms has any
familiarity with, and it makes Mitt Romney feel other. It makes him look,
you know, out of touch, elitist. All of those things are bad in a
presidential campaign, particularly one in an uncertain economic time.

MATTHEWS: Well, here he is actually making the case you just made.
In an interview with CNBC`s Larry Kudlow, Romney decried the "99 percent
versus the 1 percent" criticism, he being high up in the 1 percent. In
fact, he`s 1 percent of 1 percent of 1 percent. Let`s watch.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R-MA), FMR. GOV., PRESIDENTIAL CANDIDATE: The question
is whether you`re going to say that we`re going to eliminate the capital
gains tax break. So if you`re going to say, We`re going to raise that
dramatically, you`re going to choke off a lot of the capital that goes into
creating new enterprises and creating jobs. It`s the wrong way to go.

Well, it`s designed to come at me if I`m the nominee. If I happen not
to be the nominee, he`ll still take the 99 versus 1 attack. I mean, he`s
really trying to divide America and to try and say that Republicans are all
about the rich people.

I`m fighting to help middle class Americans get better jobs and better
incomes, and people who`ve been successful understand the path to success.
We want everyone to enjoy success in America.

(END VIDEO CLIP)

MATTHEWS: You know, these words he uses, "people have been
successful," "the path to success," people -- you know, he doesn`t even
know the language of the middle class yet. He talks the language of
"Fortune" magazine.

TODD: Well, it`s funny you bring up language because one thing I do
want to note, and it`s -- and the movement itself feels pretty vindicated
today -- the Occupy Wall Street movement -- the language that they use --
you know, the president very quietly, while never fully saying he`s
embraced the Occupy movement, he`s using their language. He went ahead and
adopted...

MATTHEWS: The 1 percent.

TODD: ... the language from the 1 percent -- he`s been very carefully
doing that. And the Republicans have believed this could be a negative for
the president. That`s why Mitt Romney`s comfortable talking about the 99
versus the 1.

MATTHEWS: Why do they think, the Republicans, that this could hurt
the president?

TODD: Because in the past, any time the Democrats have tried to do
this, the old -- whether it was Al Gore who tried it, Walter Mondale who
tried it, this idea it`s us versus them...

MATTHEWS: Yes.

TODD: ... that it hasn`t worked, that at the end, Democrats looked
like they were somehow punishing success. And Republicans have run that
campaign before and won. This does seem different right now because of the
economic place we`re in and because the rich seem so much richer than what
the rich seemed even 20 years ago.

MATTHEWS: And Romney is so far away from the average Republican voter
in wealth. Nobody who makes $100,000 a year or $200,000 a year, $200,000 a
year can say, I`m in the same boat as a guy who makes $57,000 a day.

TODD: It`s a tougher (INAUDIBLE) And you know, we talked about, you
know, be careful on capital gains. And the White House, by the way, has
said, No, no, no, this isn`t raising capital gains. They`re -- frankly,
the idea -- they haven`t figured out -- they`re just throwing out a number.
We think it should be 30 percent.

MATTHEWS: I know.

TODD: But we have no idea how to write it into the tax code, but we
came up with a number. And oh, by the way, thank you, Mitt Romney, for
putting out your tax return.

MATTHEWS: Well, another adversary for the president last night,
Republicans in Congress. Here he was taking on anyone who might get in the
way of his agenda. Let`s watch the tough guy talk from the president.

(BEGIN VIDEO CLIP)

OBAMA: The state of our union is getting stronger. And we`ve come
too far to turn back now. As long as I`m president, I will work with
anyone in this chamber to build on this momentum. But I intend to fight
obstruction with action, and I will oppose any effort to return to the very
same policies that brought on this economic crisis in the first place.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Well, there`s the president, Chris Cillizza, talking to his
base. You know, for three years now, he`s trying to be a center-left
president, sometimes a center president, sometimes a left -- I`d say
leaning to the center -- at the same time trying to keep the base, the
blogosphere, et cetera, happy.

There he is, I think, talking directly to them, saying, I`m going to
punch their lights out through executive orders, through recess
appointments, through vetoes, whatever it takes to beat them when they try
to beat me.

CILLIZZA: Yes. And you know, Chris...

MATTHEWS: The first time he`s saying this.

CILLIZZA: ... if he gets reelected, I think we may go back to that
debt ceiling fight and say, You know what? This might have been the moment
when things changed for him. I think the debt ceiling fight confirmed what
his aides had been trying and his political strategists had been trying to
tell him for a long time, that in order to beat Republicans, you`re going
to have to talk tougher, be willing to keep the steering wheel straight in
the political chicken longer, out-tough them, essentially.

If you go and look at the payroll tax cut extension fight -- now,
granted, Republicans were internally divided, but Obama was -- just said,
You know what? This is the road we`re going down. If you want to try and
beat me at it, you can try and beat me at it.

And that`s what -- in a lot of ways, you could sum up what he said
last night in two words, "Game on." He`s trying to send a message...

MATTHEWS: Right.

CILLIZZA: ... I am not changing. I will outlast you in this fight
and I will win this fight, which is very different than the first two-and-
a-half, three years in office, in which it was, I`ll meet you 75 percent of
the way. I`ll meet you 80 percent of the way. I`ll meet you 85 percent of
the way. That`s clearly changed in his own mind.

MATTHEWS: Well, here he is saying what a lot of people on his side
politically have been waiting for him to say for a long time. Here he is
running through his list of successes so far as president. Let`s listen to
what should be the talking points for his confederates. Here it comes.

(BEGIN VIDEO CLIP)

OBAMA: For the first time in nine years, there are no Americans
fighting in Iraq.

(CHEERS AND APPLAUSE)

OBAMA: For the first time in two decades, Osama bin Laden is not a
threat to this country.

(CHEERS AND APPLAUSE)

OBAMA: Most of al Qaeda`s top lieutenants have been defeated. The
Taliban`s momentum has been broken, and some troops in Afghanistan have
begun to come home.

On the day I took office, our auto industry was on the verge of
collapse. Some even said we should let it die. With a million jobs at
stake, I refused to let that happen. Today General Motors is back on top
as the world`s number one auto maker.

(END VIDEO CLIP)

MATTHEWS: You know, I`ve been watching Joe Biden for years and years,
and he has that wonderful thing he does. He goes like this...

(LAUGHTER)

(CROSSTALK)

CILLIZZA: He has a great "I`m listening very intently and I`m
interested."

MATTHEWS: Yes. Back to you, Chuck...

(CROSSTALK)

TODD: The accomplishment -- the accomplishment -- somebody said they
wanted to do a whole "Mystery Science Theater 3000" just on Boehner and
Biden, you know, just sort of...

(LAUGHTER)

MATTHEWS: How they look.

TODD: ... doing little thought bubbles, what they`re doing physically
and all that stuff.

But on the accomplishment list, I thought it was interesting what he
emphasized and what he de-emphasized. You know, he still doesn`t know how
to deal with health care, and that is an interesting conundrum that the
Obama campaign has decided...

MATTHEWS: Why doesn`t he use the Heritage Foundation talking points,
We want every American to take responsibility for their health care to the
extent they can afford it?

TODD: Well, this was blown from the very beginning. They ceded the
message on health care to the Republicans when they were in the middle of
getting it passed and winning!

MATTHEWS: You`re talking about common sense...

(CROSSTALK)

TODD: They win the legislation and lose the message war. You know,
ultimately, that`s why you hear, Boy, that`s one thing that Romney and
Gingrich -- they bring up every day and every hour on the campaign trail is
that he -- he had a response almost for everything in that State of the
Union, except health care, which -- which I find -- like, I guess their own
polling has told them, You know what? Just don`t have the fight.

MATTHEWS: Do you think if they have a debate this fall and the
president obviously has to face either Romney, probably, or Gingrich, that
Gingrich would actually say "food stamps" to the president`s face? Would
he say "Saul Alinsky"? Would they talk like that right to him?

TODD: You know, I don`t know about the Saul -- I -- you know what?
Yes, I think Newt would.

(CROSSTALK)

MATTHEWS: Would he get that direct and personal with these charges,
these ethnic charges?

CILLIZZA: If he was the nominee, I think he would. I would say,
Chris, I`m stunned -- and Chuck and I have talked about this, but I am
stunned to the extent at which the entire Gingrich candidacy is premised on
the idea that he`s the better debater against Barack Obama, as if the
general election campaign -- the only thing in the general election
campaign...

MATTHEWS: Yes.

CILLIZZA: ... which could go on for months and months, are those
three -- what we expect to be three presidential debates. It`s a
remarkable thing that people...

MATTHEWS: Yes. OK.

CILLIZZA: ... are saying he`s more electable...

MATTHEWS: OK...

CILLIZZA: ... because he`s a better debater.

MATTHEWS: My friend, Chris, I do agree he`s right on one thing in
history. They will be the greatest debates in history that those two guys
go at it because they both got IQs well high up there, and they would be
unbelievably literate against each other. Anyway, thank you, Chuck Todd.
Thank you, Chris Cillizza.

Coming up: We`ve been watching Newt Gingrich surge in Florida now,
just like in South Carolina. So what`s up? Has he crested yet? Now we`ve
got a real race between Newt and Mitt down there in Florida, the Sunshine
state. That`s ahead.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Minnesota congresswoman Michele Bachmann, who was really
made famous on this program, announced today she`ll seek a fourth term in
the House of Representatives. Bachmann finished a distant sixth in the
Iowa Republican caucuses early this month and dropped out of the
presidential race. We all know that.

A new poll from PPP shows Bachmann isn`t popular in her home state.
She`s not running statewide, but nearly 6 in 10 Minnesota voters have an
unfavorable opinion of her, versus just a third who view her favorably.
Keep in mind, PPP`s a robo-call -- poll, actually -- which some pollsters
say isn`t as accurate.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. The race for Florida is getting
even more interesting. Polls show Mitt Romney and Newt Gingrich in a very
close race down there ahead of the primary next Tuesday. Well, this week,
Newt Gingrich got a big boost in the form of a $5 million check to the
super-PAC he`s got from the wife of multi-billionaire casino tycoon Sheldon
Adelson.

Well, that money seems to be going to good use, if you believe in the
Newt Gingrich cause. The PAC has produced $6 million in ad time in Florida
and it`s out with a new commercial attacking Romney`s health care record up
in Massachusetts.

Well, today "The Washington Post" reported that that super-PAC is,
quote, "setting up a shadow campaign in Florida, complete with field
directors, volunteers, poll workers and drivers."

Well, Rick Tyler is the senior adviser to that PAC. He used to serve
as Newt Gingrich`s campaign spokesman. Rick, thanks for joining us. Also
with us, an expert on all things political, Joan Walsh, editor-at-large for
Salon. Thank you, dear.

Look, here we go, Rick. Rick, now, you maintain the fact that you
don`t talk to Newt Gingrich. You are an independent person in this
society. You don`t work with him. You`re not coordinating, right?

RICK TYLER, FMR. GINGRICH AIDE, WINNING OUR FUTURE SUPER-PAC: No,
sir.

MATTHEWS: So how do you know what to put in these ads?

TYLER: We make an assessment on where we think this race is going.
And you know, things work out pretty well. I mean, it was interesting to
me. I said that all we have to do is remind people that Mitt Romney was
Charlie Crist. And then I learned Newt had said that a week before. And I
didn`t know that. So you know, I`ve been with Newt a long time, and you
know, I can dance with this campaign and not coordinate. So I`m not
worried about it.

MATTHEWS: Well, let`s take a look at a new poll out there today from
"Time" magazine and CNN on the race in Florida. Between Sunday and
Tuesday, Mitt Romney led Gingrich by 2 percentage points, 36 to 34.
However, when you break those numbers down by day, there`s some difference
that Newt Gingrich`s surge might have peaked. Some evidence -- on Sunday,
Newt Gingrich actually led Mitt Romney by 6 points. On Monday and Tuesday,
Mitt Romney was up by 9.

Do you see a cresting earlier this week in your guy`s campaign, the
one who you are endorsing?

TYLER: No, I don`t see it at all. In fact, Mitt Romney`s team has
spent over $5 million here in Florida, and we`ve only answered back today.
We`ve run our first ads, you know, late yesterday a couple ads, and then in
earnest today. So we have not even responded and the polls that are upside-
down for Mitt Romney. So, you know, we have not begun the fight.

MATTHEWS: Let me go to Joan.

You know, my theory is this campaign that the success of Newt Gingrich
in challenging Romney so effectively the last couple of weeks -- in fact,
he`s tied with him basically nationwide now, or a bit ahead...

JOAN WALSH, EDITOR IN CHIEF, SALON.COM: Right.

MATTHEWS: ... is going to pull Romney to the right.

And it`s going to have the effect, no matter which of these two
gentlemen -- using the term that way -- succeed, that they will both be
further to the right than they`d like to be going into the race against the
president.

WALSH: Well, I think they already are, Chris. I think that we see
that very clearly.

The problem for Newt -- for Mitt Romney right now is that he does look
like the man of the top 1 percent. His taxes told us that. And the polls
-- not just the polls -- the elections are showing us that. He wins with
voters who make over $200,000 a year and he loses with voters, the lunch
pail Republicans, who make around $50,000 a year.

But the thing that I think is really scary is just this sewer of
negative advertising that we`re seeing in Florida. You know, that`s part
of why we really can`t determine who is going to come out on top because
they just keep throwing buckets of slime at one another. And from outside
if we`re not watching all of that advertising, it`s really hard to keep an
eye on exactly what`s happening.

And for Mr. Tyler to say he`s -- he doesn`t talk to his candidate, he
doesn`t need to. He worked for him for years. He is able to channel him.
So this is really a case study in how fictional this idea of these
independent PACs really -- really are.

MATTHEWS: Rick, are you a fiction? Are you creating a fictional
difference between yourself and your candidate? Are you channeling him in
the way some people do when they go to their clairvoyance?

(LAUGHTER)

TYLER: I like that term a whole lot.

But, you know, when I was on your show the last time, I said these
super PACs are an abomination and we should get rid of them.

MATTHEWS: And here you are running one.

TYLER: But these are the tools of the trade right now.

I know. It`s ridiculous. But let`s go back to letting candidates
raise the money.

(CROSSTALK)

MATTHEWS: I want to make a point for you guys. I will give you a
free ad point here.

TYLER: Thank you.

MATTHEWS: That is that when you say, very nicely, actually, Joan,
that -- my friend, that people who make $200,000 a year, which is a lot of
money, are sort of identifying with Mitt Romney, Mitt Romney makes a
hundred times that amount this year.

WALSH: I know.

MATTHEWS: And that`s only the amount he decides to draw from his
quarter billion dollars in wealth. He could have any amount he wanted a
year.

WALSH: Right.

MATTHEWS: He chooses to reinvest all the money.

Rick, here`s your super PAC. It is out with a new ad today going
after Romney`s health care record up in Mass. Let`s take a look.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Think you know Mitt? Think again.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Those who follow the path
that we pursued will find it`s the best path. And we will end up with a
nation that`s taken a mandate approach.

NARRATOR: When Mitt Romney invented government-run health care,
Romney advisers helped Barack Obama write the disastrous Obamacare.

ROMNEY: We put together an exchange, and the president`s copying that
idea. I`m glad to hear that.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I agree with Mitt
Romney, who recently said he is proud of what he accomplished on health
care.

(END VIDEO CLIP)

MATTHEWS: Do you get pictures of Bela Lugosi and try to make these
guys look more and more like them?

What do you do to tint these pictures?

(LAUGHTER)

MATTHEWS: I mean, you have got -- you have got Romney looking like
the count himself, like Dracula, and you got them -- what do you do? Do
you tell these guys put a little weird tint, purple tint to these guys?
What did you do? They don`t look like this and the president doesn`t look
like that in real life.

I just saw him on TV last night. He don`t look like that.

(CROSSTALK)

TYLER: But, Chris, right now, I didn`t see it. All I heard were Mitt
Romney`s words and the president`s words. And those are the things they
said.

(CROSSTALK)

MATTHEWS: Well, why do you make him look so furtive and so Dracula-
like? Why do you do this...

(CROSSTALK)

TYLER: Oh, Chris, you have been in politics. Come on. You have been
in politics a long time.

(CROSSTALK)

MATTHEWS: And where do you find these voices from these people with
these suspicious voices that you get? I notice you have a female voice.
Usually, you have a male voice with that guy who is always saying, did you
know he has been invited 40 times?

(CROSSTALK)

TYLER: Can I bring up something else suspicious? Because you
mentioned -- I hear about the 1 percent about Mitt Romney and over $200,000
a year, people are attracted to him.

The thing I don`t understand is this. He had some sort of
unconventional IRA. He`s claimed that there is somewhere between $21
million and $101.6 million in his IRA. Now, most Americans can only
contribute as much as $30,000 into their IRA into a retirement account.

So I did a calculation. Mitt would either have to be 3,333 years old
or he`s put something -- he put some equities or stocks into his IRA, and
in which case he may have avoided paying the UBIT tax.

MATTHEWS: OK.

TYLER: If he did that, avoiding that is criminal. So which is it?
Is he 3,000 years old or did he avoid paying the UBIT tax? Nobody is
asking the question. How do you get...

(CROSSTALK)

WALSH: Oh, but come on.

(CROSSTALK)

MATTHEWS: Well, if they can follow that, they`re faster than me.

Your witness, Joan. One last exchange here. Go ahead.

(LAUGHTER)

MATTHEWS: You ask him.

WALSH: Well, you know, Newt Gingrich would lower Mitt Romney`s taxes
to zero because Mitt Romney only pays taxes at the capital gains rate. He
only has capital gains. He doesn`t have a job.

TYLER: Apparently, he doesn`t need to because he just puts it in his
IRA.

(CROSSTALK)

WALSH: So Newt Gingrich wants him to pay zero. So this is just
hypocrisy.

Newt Gingrich believes everything Mitt Romney believes. He`s flip-
flopped just as much. He`s got a lot of money himself. This is
preposterous.

TYLER: That`s not true.

WALSH: It is true.

MATTHEWS: By the way, Mitt wants to give people tremendous breaks who
make a lot of money, and so does Newt, right?

TYLER: I think we want to...

(CROSSTALK)

WALSH: Newt wants to give more, frankly.

(CROSSTALK)

MATTHEWS: Anyway, thank you.

WALSH: Newt wants to give more.

MATTHEWS: You know I`m right.

Anyway, thank you, Rick. It`s great to have you on. You are a good
sport. But lose that double-digit multiplication stuff.

(CROSSTALK)

TYLER: Please...

(CROSSTALK)

TYLER: ... me back.

(CROSSTALK)

MATTHEWS: You`re back. You will be invited back.

Up next: It is always magical the first time someone gets captivated
by politics. And that is what happened last night to New England Patriots
wide receiver Chad -- help me with this -- Ochocinco. Ochocinco, this --
his stream-of-consciousness tweets during the State of the Union next in
the "Sideshow."

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

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

First up: guilt by association. Newt Gingrich took a shot at rival
Mitt Romney in Florida yesterday with a reference to Charlie Crist.

The former Florida governor and former Republican, for that matter, is
notoriously unpopular among the Florida GOP. So let`s hear how Newt tied
the two together, and then how Romney fired back.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: We discovered last night
that Mitt Romney has picked up Charlie Crist`s campaign team.

(LAUGHTER)

GINGRICH: I thought that sort of told you everything you needed to
know about this primary.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I guess, having lost his
staff, he`s consumed with other people`s staff. I don`t think this is
about staff. I think this is about the candidate.

(END VIDEO CLIP)

MATTHEWS: Wow. Romney is, of course, referring to the mass exodus of
the Gingrich campaign staff last summer.

But perhaps the best defense for Romney came from Florida Senator
Marco Rubio, who beat Crist in that 2010 Senate race -- quote -- "Mitt
Romney is no Charlie Crist. Romney is a conservative and he was one of the
first national Republican leaders to endorse me. He came to Florida,
campaigned hard for me, and made a real difference in my race."

So, it`s tit for tat, Marco.

And, by the way, do you think Rubio has got his eye on the vice
presidency, maybe?

Next up: Vice President Joe Biden was asked today to weigh in on the
Newt/Mitt battle. Biden was reluctant to make a prediction.

(BEGIN VIDEO CLIP)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Well, Charlie, I
couldn`t figure out the Democratic primary, or I would have just joined the
president early on. I`m not very good at this.

But the bottom line here is, there is no fundamental difference
between Newt Gingrich and Governor Romney on the things we care about, on
the whole issue of how we deal with foreign policy, on how we deal with the
domestic policy. This is a Republican fight, but, substantively, I don`t
see any fundamental difference between the men.

(END VIDEO CLIP)

MATTHEWS: Wow. A long fight on the Republican side, by the way, is
good news for the Obama/Biden ticket.

And while millions watched the president`s State of the Union address
last night, there were close to 800,000 tweets referencing the speech.
Here`s a fun look at the stream of consciousness from Chad Ochocinco, wide
receiver for the New England Patriots.

Quote: "Not being rude, but if they stand up and clap on every
statement Obama says, this could go on well over three hours."

And later, he tweeted -- quote -- "Anybody notice the guy over Obama`s
left shoulder doesn`t seem very happy, and he`s not smiling, he`s not
clapping with joy?" Hmm. Well, once he was informed that the person over
his left shoulder, the president`s left shoulder, was in fact the
Republican speaker of the House, Ochocinco tweeted right at Boehner --
quote -- "Just read some of your tweets, and you seem pretty angry, kind
sir. I can you see you on TV, but you`re not smiling. Hope you`re OK."

Well, it seems like he is a first-time viewer.

The final verdict from Ochocinco: The president`s speech was awesome.

Up next: President Obama kept secret a daring Navy SEALs raid that
freed an American who was held by pirates over in Somalia -- details on
that incredible mission coming up next.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

TYLER MATHISEN, CNBC CORRESPONDENT: I`m Tyler Mathisen with your CNBC
"Market Wrap."

What an interesting day it was, industrials up 83 points, the S&P 500
higher by 11, and the Nasdaq higher by 31 and change.

Big story of the day, of course, the Federal Reserve assuring
consumers that they will be able to borrow at low interest rates well into
2014. That`s a year-and-a-half longer than it`s previously indicated.
Central Bank Chair Ben Bernanke noted the weak, but growing economy in the
latest interest rate forecast.

And speaking of borrowing, mortgage applications fell last week,
according to the Mortgage Bankers Association, its index of application
activity down 5 percent -- 30-year fixed rates moved up slightly to 4.1
percent.

And in the financial sector, Citigroup said it may make more cuts at
its securities and banking unit this year if revenue does not improve. The
company said last week it is already in the process of eliminating about
5,000 jobs. In its most recent earnings report, Citi said banking revenues
were down nearly 30 percent.

That`s it from CNBC, first in business worldwide -- now back to
HARDBALL.

MATTHEWS: What an incredible story we have to tell you.

Last night, as President Obama shook hands and made his way to deliver
his State of the Union address, he pointed at his Pentagon chief, Leon
Panetta, secretary of defense, and singled him out for congratulations, a
few telling words that were picked up by microphones right there in the
chamber. Let`s listen.

(BEGIN VIDEO CLIP)

OBAMA: Good job tonight. Good job tonight.

(END VIDEO CLIP)

MATTHEWS: "Good job tonight" for an incredibly bold mission to rescue
two hostages, including a 32-year-old American woman and a 60-year-old
Danish man who had been captured in Somalia three months ago.

Immediately after delivering his State of the Union address, President
Obama called Jessica Buchanan`s father to tell him his daughter had been
rescued. The mission was carried out by Navy SEALs from SEAL Team Six, the
same unit that carried out the bin Laden raid, although not the same
individuals.

Kimberly Dozier of the Associated Press has been reporting on this
dramatic raid. And Bob Baer, our old friend, is a former CIA case officer
and intelligence columnist for "TIME" magazine.

Why don`t you do the play by play and we will get the commentary, the
color from Bob? And I use these happy terms because it turned out
incredibly well, all nine kidnappers killed, none of the rescuers killed,
the hostages taken completely without injury.

KIMBERLY DOZIER, ASSOCIATED PRESS: Nine kidnappers killed.

It was a high-risk raid, a joint special operations raid. The SEALs
parachuted in from a distance and then hiked to the site, which was an open
encampment. They quickly subdued the attackers. There was a brief
firefight. Some of them were actually asleep. They secured the hostages
and then Army special operations helicopters flew in, took away the SEALs,
took away the hostages, all of them unharmed.

MATTHEWS: Did they go in with those infrared goggles, the goggles
that can see in the night? Is that how they did it, with that incredible
advantage?

DOZIER: That is one way they could have done it.

They`re not giving us too many of the tactics and techniques used on
the ground because there are other hostages out there. There are other
people who may need to be rescued.

MATTHEWS: Was there a moon that night?

DOZIER: I don`t know...

(CROSSTALK)

MATTHEWS: I will bet they figure all this stuff out. There`s no
moon, no stars. They go in with that incredible electronic advantage, and
they can see, and nobody else can.

DOZIER: They do beforehand. They figure all of this out.

And this is one of the reasons that they chose this time for the raid,
even though President Obama was in the middle of a major address to the
nation. That was high stakes, because this could have gone wrong. Then
you would have had the contrast of him speaking about security successes
while something was failing on the ground.

MATTHEWS: Is this a new rule of engagement, where we seem to kill
everybody on the other side? I`m not defending any action or criticizing
it, but it does seem awful clean in terms of no hostages, but no prisoners
to bring back, that sort of thing.

DOZIER: No.

We spoke to pirate sources, self-identified pirate sources on the
ground who said that they spoke to survivors from the raid, pirates,
criminals who had gotten away. So that indicates that there is some
confusion about whether everyone was killed.

MATTHEWS: About whether everybody was killed or not.

Bob Baer, give us your insights into what this all means about our
capabilities, what we are going to be up against the rest of our lives in
the world, these strange kind of enemies, pirates.

ROBERT BAER, INTELLIGENCE ANALYST, TIME.COM: Well, Chris, I think
this is the future of warfare.

The SEALs are very, very good at this. They have learned in Iraq and
Afghanistan. You know, from the time of contact, until they rescued
everybody, is about two minutes.

And, you know, as for killing the hostage takers people with weapons,
the SEALs don`t have the time to decide who is a threat and who`s not. You
simply have to go in. And I repeat, they learned this in Afghanistan and
Iraq -- and you have to shoot everybody with a weapon. There`s no putting
flex cuffs on. There`s no saying, throw your hands up.

They know exactly what they`re doing. They come in with passive
goggles. There`s no way to detect them. They come in soundlessly.

And these guys, remember, have been through this over and over again.
That`s why they`re so good.

When I was in the `80s in Beirut, we were sort of tentative about
this. We hadn`t done a whole lot of rescues, had Desert One in Iran. We
lost a bunch of people there. And these two wars have really taken us a
long way.

MATTHEWS: And like Desert One, which was the tragedy where we had
the burning of the -- oh, it`s horrible what happened to those guys, the
rescuers -- and had the helicopter crashes and all. What`s different? Is
it just an over -- did we now make a point of having everything we need
with some big margin for error, is that it, like when we lose the
helicopter going to get bin Laden still carried out successfully the
mission?

BAER: There is always a risk, but it`s just the practice. You know,
you can teach this stuff at the SEALs course in San Diego, but it`s nothing
like actually doing it. And this -- they work as a team as well and they
do it over and over again. There`s nothing -- there`s no group closer in
the United States government than the SEALs.

They protect each other. They`re trained to do it. They`re just
good.

And, you know, as these parts of the world fall off the political map
like Somalia, as Afghanistan fall for a long time, we`re going to see a lot
more of this. And, by the way, it`s gutsy of the president to go ahead.

I`m sure the SEALs, you know, called when they would go in and the
president said, yes, go for it. He`s got a lot of trust in them.

MATTHEWS: Kimberly?

DOZIER: Well, I just wanted to point out this was an interagency
operation. The FBI was in charge of the investigation because there was a
U.S. hostage overseas involved. You had the CIA gathering intelligence.
And then you had this interagency task force figuring out how to respond.

The SEALs got the job because the Horn of Africa is one of their
areas of operation. Had it been Latin America, had it been in other parts
of the world, it could have been Delta Force, the U.S. Army`s version that
also goes in and gets hostages out.

So, basically the U.S. government takes a look at the target and
figures out what tool in the tool box to use. In this case, it was the
SEALs.

MATTHEWS: Last point, Bob, you talk about countries that would go
off the map -- meaning they don`t really have governments anymore, Somalia
being a horrendous case. There are so many points in the world now where
we`re going to have to be our own police force, right?

BAER: Oh, absolutely. We can`t send ground forces. You remember
Blackhawk down. You simply can`t send an Army into these areas because
they`re going to get mowed up, you know? And that`s why you got to come in
with Special Forces -- people that can get into an area quickly and get out
and above all surprise.

MATTHEWS: Well, I pay tribute to the guys that went in there, the
men who risked their lives to do this to save those two lives. Again and
again I think we all do. We`re so impressed as the president is.

By the way, another successful operation under the very responsible
hands of Leon Panetta. I think he`s going to be one of our great
secretaries of defense. He is a good guy.

Anyway, Bob Baer, Kimberly Dozier -- thanks for the reporting and the
analysis.

Up next, the emotional last day in Congress for Gabrielle Giffords.
What a story this one is, of a totally different kind.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

OBAMA: Build baby build.

In last night`s State of the Union, President Obama talked about the
need to build baby build.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: During the Great
Depression, America built the Hoover Dam and the Golden Gate Bridge. After
World War II, we connected our states with a system of highways.
Democratic and Republican administrations invested in great projects that
benefited everybody from the workers who built them to the businesses that
still use them today.

(END VIDEO CLIP)

MATTHEWS: Well, the president announced he`ll sign an executive
order to lift the red tape that slows down construction projects like those
and he called on Congress to take some of the money we`re no longer
spending on war and use it to build here in the U.S. of A.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIPS)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: All of us come to the
floor today, colleagues of Congresswoman Gabby Giffords, to salute her as a
brightest -- the brightest star among us, the brightest star Congress has
ever seen.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: Though Gabby may be
leaving Washington today, I know this won`t be the last we see of her or
Mark. And I`ll say once again, Mr. Speaker, Congresswoman Gabby Giffords`
strength against all odds serves and will continue to serve as a daily
inspiration to all of us. Thank you, Mr. Speaker. I yield back.

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Well, we`re back. A very emotional scene on the House
floor this morning as members of both parties honored Congresswoman
Gabrielle Giffords from Arizona. It was just over a year ago that Giffords
was nearly killed during a shooting rampage event in her home district.
She was shot right in the head. She`s made incredible progress.

But this weekend, she announced she`d step down to focus on her
recovery. And today, she handed her official resignation letter to Speaker
John Boehner.

Here she is doing that. Wow. Oh, God.

Now to talk more about Congresswoman Gabby Giffords is one of the
people who really knows her best. Her chief of staff, Pia Carusone, who
also honored, was also honored this morning for the work.

Pia, thanks for joining us.

You know, I worked on the Hill and I don`t know anybody who has ever
had to go through exactly what you`ve had to go through, holding things
together in all of these months and actually a year now.

What do you think went into the congresswoman`s decision to resign
her office right now when everybody is rooting for her to actually stick
around?

PIA CARUSONE, CHIEF OF STAFF TO REP. GIFFORDS: Well, thanks for
having me on, Chris. You know, for her it was really what is the right
thing for Arizona. She determined in the last couple months that she needs
more time in her rehab program. She needs to continue at the 100 percent
level that she`s at now, and that means that returning to work in 2012 was
looking less and less likely.

And in the last couple of weeks, she really decided finally that it
looked like that would not be possible at all this year for her to return
to work. So she was faced with either resigning or serving out the
remainder of her term and not running for re-election. From her
calculation, the best thing for the district is to have a representative in
the seat as quickly as possible that can -- in a full-time manner, serve
the 600,000 constituents in southern Arizona that are in the district.

And so, she made the decision that the right thing to do was step
down.

MATTHEWS: What do you think of that decision yourself?

CARUSONE: I mean, you know, she`s a class act, and I think right up
until the end, she absolutely had the right framework and thinking about
it. She didn`t think politically because it`s, frankly, not the best thing
politically for the district. She thought about no one but her
constituents.

Sure, she could have continued over the next, you know, 10, 11 months
as a member of Congress and received that recognition over the remainder of
the year, but it`s not right. You know, if she wasn`t able to return this
year, she felt, and I agree, that the right thing to do is step away and
let somebody else run to be here as a voting member of Congress full time
and certainly the staff has been a big part of helping the constituents.
But it`s not the same as having someone here on a daily basis serving the
district.

MATTHEWS: Well, her resignation video which was released this past
weekend, Congresswoman Giffords showed that grit and determination -- that
grit that her colleagues have often spoke of. Let`s listen to her
statement.

(BEGIN VIDEO CLIP)

REP. GABBY GIFFORDS (D), ARIZONA: Thank you for your prayers and for
giving me time to recover. I am getting better. Every day, my spirit is
high. I will return. And we will work together for Arizona and this great
country.

(END VIDEO CLIP)

MATTHEWS: Pia, what`s the mood out there in the district in terms of
guilt or sense of responsibility or anger? What would be the emotion or
mix of those that attended the fact that somebody in that area went and put
a gun to somebody`s head, shot at them?

CARUSONE: I mean, I think there`s obviously a lot of remorse and
regret in the community. It was determined it seems that the gentleman
was, you know, really mentally ill. And it had nothing to do with it being
in Arizona or it being a difficult part of the country politically. It
wasn`t that. It could be in anyone`s community.

And Tucson really stood up and came together the way that the town
always does. And I think showed its true colors as a place that unites
people and supports one another.

So I think there`s a sense of pride in the response and I think also
in their hometown congresswoman for surviving this and showing the world
what a grueling recovery can look like but also inspiring a lot of people
who were dealing with their own, you know, big life issues.

MATTHEWS: Well said. One of the more moving moments from this
morning in Congress, Congresswoman Debbie Wasserman Schultz, a friend of
this show, one of Gabby Giffords` closest friends, gave a very emotional
speech before reading a good-bye letter on behalf of Congresswoman Giffords
herself. Let`s listen to that.

(BEGIN VIDEO CLIP)

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: There is nothing more
important than family and friendship. And that should be held on high
above all else. And I will always carry that in my heart. And even though
I know we won`t see each other every day, Gabby, we will be friends for
life.

GIFFORDS: Yes.

WASSERMAN SCHULTZ: For life.

GIFFORDS: Thank you.

(END VIDEO CLIP)

MATTHEWS: Good for Debbie, too.

Anyway, thank you, Pia Carusone, for being on the program tonight.
And congratulations for being a great model for all staffers up there.

When we return, "Let Me Finish" with those new Kennedy tapes.
They`re news again. They show a president in conflict over Vietnam and
what to do right at the end.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: "Let Me Finish" tonight with this:

Yesterday, the John F. Kennedy Library released the last of his
presidential tapes. They were from two days before he was killed, and
included a conversation on an issue that haunts so many of us.

What would Jack Kennedy have done in Vietnam? Would he have done
what his successor Lyndon Johnson did, create an American war in Vietnam
involving troop levels of a half million soldiers? Would he have allowed
the war to escalate to where we lost 58,000 American soldiers?

It`s s a question I`ve been asked again and again traveling the
country for my new book "Jack Kennedy: Elusive Hero."

This much I know, the day he died, he`d given a speech that very
morning in Ft. Worth that said, quote, "Without the United States, South
Vietnam would collapse overnight." Well, those were his very words that
morning of November 2nd, 1963, with Lyndon Johnson at his side to the
city`s Chamber of Commerce. Without the United States, South Vietnam would
collapse overnight.

So, was he ready to introduce American combat troops or was he going
to limit our role to those many thousands of advisers in country? Was he
going to do what Lyndon Johnson did and make it an American war?

There are good reasons to believe he would not have. His war buddy,
Red Fay, recalls Kennedy issuing orders to a Marine unit commander wanting
to take his men into a combat situation. The warning was for the
president. If he did it, he would have hell to pay for it.

Kennedy had resisted introducing Americans into front-line fighting
because of what he`d seen happen to the French when they were fighting in
the country. He`d seen how the firepower the French had been totally
overwhelmed by the nationalistic spirit of those fighting them. The
Vietnamese did not want foreigners running their country, either directly
or through a government they were seen to be controlling.

The tapes released yesterday show Kennedy getting conflicting
reports. The military was telling him the U.S.-backed government in Saigon
was winning the battle against the Vietcong. The State Department had just
told Kennedy that the government we were backing was focusing mainly on
fighting its own students who were moving over to the Vietcong side.
Kennedy wondered aloud if the military and the State Department people had
just been to the same country.

We know this. The day before he left for Texas, President Kennedy
was thinking about an exit strategy. He asked national security aide
Michael Forrestal to, quote, "organize an in-depth study of every possible
option we`ve got in Vietnam, including how to get out of there."

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

"POLITICS NATION" with Al Sharpton starts right now.

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

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