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updated 2/14/2012 11:57:00 AM ET 2012-02-14T16:57:00

Guests: David Corn, Alex Wagner, Brian Sullivan, David Wilson, Eugene Robinson, Charlie Black, Foster Friess, Kate Coyne, John Feehery

CHRIS MATTHEWS, HOST: Obama draws the line.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington. Leading off tonight,
I`m mad as hell and I`m not going to take it anymore. Well, President
Obama did not say those words today when he released his 2013 budget, but
he may well have said them. After three years of trying to meet
Republicans halfway and getting met only with the back of their hands, the
president today produced a document that reflects his priorities and is
designed for his reelection: Spend now to keep the economy -- the economic
recovery going, and worry later about the deficit.

Also, look for the church and birth control issue to show a new divide
now, Republican versus Democrat. Both parties think they`re playing a
winning hand here. And that goes double for Rick Santorum, who says
insurance simply shouldn`t cover birth control under any circumstance. So
what was last week an issue dividing some Democrats is now a wedge issue
separating out right-leading Republicans.

Plus, when Mitt Romney called himself "severely conservative," he said
it like ET trying to phone home. Or as Chris Orr (ph) wrote in "The New
Republic," Romney sounds like he`s impersonating a conservative Republican.
Quote, "That persona -- angry, simple-minded, xenophobic, jingoistic -- is
exactly what Romney imagines the average GOP voter to be."

Well, Romney`s fair (ph) to close the deal still leaves, obviously, a
huge opening for Santorum. Wait until you see the polls tonight. They`re
even.

And tragically, we`ve now added Whitney Houston`s name to a list of
singers that includes Jim Morrison, Janis Joplin, Michael Jackson, and most
recently Amy Winehouse. So what`s it all about?

Finally, "Let Me Finish" with the politics and philosophies of two
parties now clearly at odds with each other.

We begin with President Obama drawing a bold line with Republicans.
He wants to create jobs, and they want to keep squabbling over debt
reduction. Eugene Robinson is a Pulitzer Prize-winning columnist for "The
Washington Post" and an MSNBC political analyst and John Feehery is a
Republican strategist.

Gentlemen, it looks to me like the president laid it out today,
clearly a political document as well as a budget. He`s making clear he
wants to create jobs. And down the road, he will get to debt reduction,
but right now, he wants two things: create jobs, infrastructure, lower
taxes on payroll taxes things like that, down the road, deficit reduction.

EUGENE ROBINSON, "WASHINGTON POST," MSNBC POLITICAL ANALYST: Right,
and also to put down a marker saying, This is what I believe, this is what
I think we should do, which, by the way, is what most economists say, you
stimulate the economy now and do your deficit reduction a couple of years
out.

But clearly, he`s done with trying to engineer budget and spending
proposals in order to take into account Republican priorities because he`s
tried it before and he never gets anywhere. They...

MATTHEWS: It seems to me, John, that starting around August, when the
Republican candidates, your guys, rejected even in concept a 10-for-1 deal
-- $10 of spending cuts for $1 of revenue increase -- he realized he wasn`t
going to make a deal with your side. So he said, Why don`t I do what I do
best and Democrats sell (ph) best, let`s create jobs. And so he started
with the American jobs bill. Laugh at it if you will, it`s his bill and
you don`t have one. Two, cut the payroll tax, keep it down so that people
will be more likely to hire people. Let the Republicans talk about debt
reduction. That`s his philosophy.

JOHN FEEHERY, REPUBLICAN STRATEGIST: Well...

MATTHEWS: And that`s his politics.

FEEHERY: His philosophy is do what he did in the Middle East, which
is lead from behind. He`s actually...

MATTHEWS: Well, it worked, didn`t it?

FEEHERY: The only -- well, not in the Middle East. Middle East is...

MATTHEWS: Well, where`s this guy Gadhafi? What`s he doing now?

FEEHERY: Well, let`s see what happens in Syria. Let`s see what
happens with Iran and Iraq, Iran and Israel. It`s a real mess in the
Middle East. But anyway...

MATTHEWS: Yes, your guy did a really good job over there...

(CROSSTALK)

MATTHEWS: W did a great job over there.

(LAUGHTER)

FEEHERY: He`s leading from behind on the budget. The Senate
Democrats once again are not going to do the budget. The only ones who are
going to lead on the budget are going to the House Republicans. And you
know, at the end of this budget cycle, 10 years, because of the Obama
budget -- if the Obama budget was put in place, which it won`t be put in
place, my son`s going to inherit a $26.3 trillion debt. That is...

MATTHEWS: (INAUDIBLE) a little harder.

(CROSSTALK)

FEEHERY: ... big deal. So yes, it`s a political document. I think
that it`s an irresponsible budget. And I think that he`s going to -- you
know, the problem with the president is people don`t think he`s actually
leading right now.

MATTHEWS: OK...

(CROSSTALK)

MATTHEWS: A lot of that debt we know comes about because of what he
inherited. But look at this. Today the president defended his budget,
saying we need to keep the economy growing right now. No time to be
cutting spending right now. Let`s watch him.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The main idea in the
budget is this. At a time when our economy is growing and creating jobs at
a faster clip, we`ve got to do everything in our power to keep this
recovery on track. By reducing our deficit in the long term, what that
allows us to do is to invest in the things that will help grow our economy
right now.

We can`t cut back on those things that are important for us to grow.
We can`t just cut our way into growth. We can cut back on the things that
we don`t need, but we also have to make sure that everyone is paying their
fair share for the things that we do need.

(END VIDEO CLIP)

MATTHEWS: Well, there you have it. No budget cuts in the short run,
and basically, make the richer pay more taxes. Part of the budget spent to
further jump start the economy, as the president just said. He`s proposing
a half a trillion dollars now in transportation projects, $141 billion in
research and development projects for new technologies, and $8 billion for
job training for community college students, which I think`s really
important.

There it is again, jobs and job training now, no spending cuts now,
try to get the rich to pay their share.

ROBINSON: Yes, and the question is not just how big the debt is that
our children will inherit. It`s how big the economy is our children will
inherit, as well, and the debt as a percentage of GDP. And in fact, if you
let the recovery stall, if you let us go into a vicious cycle of no growth
or low growth, then you end up, as a percentage -- in percent terms of
having a bigger debt problem than you would if you managed to stimulate
growth. And this is what the...

MATTHEWS: Do you think the Republicans, if they were in power right
now, would really be cutting spending right now? Would they be doing that
at a time we`re barely getting out of this recession?

FEEHERY: I know what they would do. They`d reform entitlements,
which are killing the long-term...

MATTHEWS: That`s not going to help us get out of this recession.

FEEHERY: Well, what you have to do -- think about the long term,
Chris. You know, S&P said that we are -- lost our AAA rating because of
the lack of leadership from people like President Obama. We need political
leadership...

MATTHEWS: He offered your guys a deal. They wouldn`t take a 10-to-1
deal.

FEEHERY: Entitlement reforms, otherwise we`re not going to...

(CROSSTALK)

MATTHEWS: John you`re out of date here. The president offered -- you
know the president was in a -- Gene, would you take this fight up?

(LAUGHTER)

MATTHEWS: Wasn`t the president in a deal-making mode this past
summer? He was ready to cut the worst deal for the liberal side of -- the
progressive side of things, and your guy said, No deal.

ROBINSON: He thought...

MATTHEWS: Eric Cantor and that crowd, the Tea Party guys...

(CROSSTALK)

ROBINSON: ... deficit-reduction package negotiated with Boehner, and
Boehner couldn`t deliver.

FEEHERY: I think what the Republicans said it they didn`t want job-
killing tax increases. They didn`t want that. And the president wanted
job-killing tax increase! Jobs -- if you want jobs...

MATTHEWS: A 10-to-1 deal, and he turned them down.

FEEHERY: ... you don`t -- you don`t increase taxes on job creators!

MATTHEWS: You`ve got a weak argument here.

FEEHERY: And you also don`t cut...

(CROSSTALK)

MATTHEWS: He comes off with a really good offer to you guys. He went
to all the candidates. He went to the leadership and said, How about a
deal that you -- that favors you guys? You won the last election in 2010.

FEEHERY: That was...

MATTHEWS: Here`s your deal. And you guys coughed it back at him.

FEEHERY: Chris, you and I both know that the president walked out on
the deal. That was not a real deal. It was not a real deal offered.
There was not a real deal offered.

ROBINSON: Oh, come on.

FEEHERY: And the fact of the matter is all those spending cuts he`s
had up there were all ridiculous! They were illusionary...

(CROSSTALK)

ROBINSON: ... and you usually don`t do this. You`re rewriting
history.

FEEHERY: No, that`s the truth! Ask...

ROBINSON: That`s not what happened. That`s not what happened at all.
He had a deal with Boehner...

FEEHERY: No.

ROBINSON: ... and Boehner couldn`t deliver!

(CROSSTALK)

MATTHEWS: ... because the president decided since September he`s
going to get reelected. And he`s going to do it by creating jobs. The
American jobs program lowered taxes on payroll taxes and people who hire
people. Your party`s opposed that. They`re still arguing about it this
spring -- as we go into this spring. They won`t give him a year-long
extension, will you? Why are you against that? That`s a job-creating
program.

FEEHERY: Actually, House Republicans offered a full-year extension.
They just did it. They were actually going to pass...

MATTHEWS: With what?

FEEHERY: They were going to pass a full-year extension. They`re
going to actually -- they`re going to pass it in the House and see what the
Senate does with it. The Senate can kind of screw it up, which I`m sure...

MATTHEWS: What are you cutting?

FEEHERY: They`re not cutting anything. They`re just going to do a
full-year extension without any cuts.

MATTHEWS: OK.

FEEHERY: They just offered that today.

MATTHEWS: OK, good deal.

ROBINSON: A clean full-year extension, no cuts, nothing else on the
bill?

FEEHERY: That`s what they offered. They said they`re going to...

MATTHEWS: Well, then you`re breaking news here. Earlier today, the
president explained why the Bush tax cuts should be allowed to expire for
the wealthiest Americans. Let`s watch.

(BEGIN VIDEO CLIP)

OBAMA: Right now, we`re scheduled to spend nearly $1 trillion more on
what was intended to be a temporary tax cut for the wealthiest 2 percent of
Americans. Do we want to keep these tax cuts for the wealthiest Americans,
or do we want to keep investing in everything else? Education, clean
energy, a strong military, care for our veterans -- we can`t do both. We
can`t afford it. Some people go around and they say, Well, the president`s
engaging in class warfare. That`s not class warfare, that`s common sense!

(CHEERS AND APPLAUSE)

OBAMA: That`s common sense!

(END VIDEO CLIP)

MATTHEWS: Common sense, John Feehery, to tax the rich a little more?

FEEHERY: I think (INAUDIBLE) common sense...

MATTHEWS: The fact that he...

(CROSSTALK)

FEEHERY: What is common sense is to have real tax reform, get rid of
all these loopholes...

MATTHEWS: Wait a minute. We had a pretty good progressive tax system
under Clinton. We had a booming economy. Can`t we get back to that?

(CROSSTALK)

FEEHERY: ... Reagan tax cuts. We should shrink the rates on...

(CROSSTALK)

FEEHERY: What we need to have is more people paying taxes. We need
to have a fair tax rate, get rid of all the loopholes. And that`s what
Republicans will deliver.

ROBINSON: If that would work -- you know, George Bush cut taxes.

FEEHERY: That`s what Republicans...

(CROSSTALK)

MATTHEWS: ... and I`ve watched all this whole debate. We`ve been
watching the primaries. We watched every primary night and every caucus
night. And I haven`t heard one of you guys saying -- not one Republican
say, Let`s go back to George W. Bush`s policies. Let`s go back to the Bush
administration.

FEEHERY: Except that...

MATTHEWS: Your idea of restoration is going back to the Clinton era.

FEEHERY: Except the president...

MATTHEWS: To the `90s...

(CROSSTALK)

MATTHEWS: The Republicans were quick to attack the president`s
proposal today. Let`s hear the attack of Feehery`s gang here.

The speaker of the House, John Boehner, said in a statement today, quote,
"The president`s budget is a gloomy reflection of his failed policies of
the past, not a bold plan for America`s future. Our nation needs
Washington to demonstrate some courage with a budget that honestly
addresses the near and long-term challenges we face. Instead, the
president offered a collection of rehashes, gimmicks and tax increases that
will make our economy worse."

FEEHERY: Boehner`s right.

MATTHEWS: He could have written this years ago, that line. Pretty
tired line.

FEEHERY: Well, this budget, as we all know, it`s already dead on
arrival. But it`s not going to make a mark beyond next week. It`s a
ridiculous budget.

MATTHEWS: But the president`s going to get his way, so you bring us
good news tonight. You`re ahead of me on the news. The fact is, the
president is going to get what he wanted, which is a reduction for the
whole year in the payroll tax.

FEEHERY: I think the Republicans said that they were going to support
that coming out yesterday.

MATTHEWS: So you`ve given up.

FEEHERY: I don`t think we`ve given up. They`re going to do --
they`re going to pay for the rest of this spending that the Democrats want,
but they`re going to have -- they`re going to have a...

MATTHEWS: Gene, it`s a victory.

ROBINSON: Yes.

MATTHEWS: Announced here by John Feehery.

FEEHERY: It sounds like some party wants to change the subject, but -
- you know...

FEEHERY: That`s what I`m hearing. That`s what I`m hearing, that
they`re...

MATTHEWS: Let me ask you about the economy. The president is
concerned that the growth rate will be down by the end of the year. I
think it`s everybody`s concern who`s concerned about his reelection. Gene,
if we have a 3 percent growth rate this year, the unemployment rate keeps
going down, and we have a 2 percent rate, it goes up again.

ROBINSON: Right. Right.

MATTHEWS: And if the Republicans get their way, they`ll get the
growth rate down. The economy will be squeezed down.

FEEHERY: Oh, that`s...

MATTHEWS: No, it will happen if you get your way.

ROBINSON: Well, I certainly hope that that`s not what Republicans are
wishing. Is it? Would it be...

FEEHERY: No. We want growth.

(CROSSTALK)

MATTHEWS: You squeeze down spending right now, you reduce this
economic growth...

FEEHERY: No, we...

(CROSSTALK)

FEEHERY: ... Greece!

ROBINSON: As a practical matter, there`s not going to be a squeeze on
spending this year. Now, what the growth rate ends up as, you`re
absolutely right, it`s going to have a lot to do with the president`s
reelection chances.

MATTHEWS: OK, we...

ROBINSON: But now looks pretty good.

MATTHEWS: Look, we got to clarify -- we`ve got some clarity on this
discussion. What`s going on right now is the president of the United
States is pushing for what is clearly, I agree, if you`re saying it, a
political document. It`s aimed at creating jobs, letting everybody know
he`s creating jobs. But the focus on job creation from now to next
November because the only issue`s going to matter to your party, no matter
what you say now, is the unemployment rate, not how much the deficit`s gone
down or how much the debt`s gone down. You`re going to score him on what
he wants to do. And that`s why he`s doing it.

Thank you, Eugene Robinson. Thank you, John Feehery. These guys talk
about the debt. All they`ll talk about next fall is the unemployment rate.

Coming up, that fight between the Obama administration and the
Catholic church over birth control. Well, we`ll see where that goes. It`s
certainly changed directions from where it was last week. Liberal
Catholics are aboard with the president. Both sides, Republicans and
Democrats, think it`s a winner, so it`s going to be a battle between the
left and the right. The center seems to be going with the president.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Well, in the Republican race this year, not everyone`s
getting a home state bump in the polls. Check out the HARDBALL
"Scoreboard." In Michigan, Mitt Romney`s home state, if you will, Rick
Santorum has a 15-point lead in the new PPP poll -- 15-point lead over
Romney. Romney`s at 24. Santorum`s at 39.

In Georgia, which votes on super-Tuesday, on March 6th, Newt Gingrich
leads Mitt Romney by 14 points in a new Mason-Dixon poll. It`s Newt 43,
Romney in Newt`s home state, Santorum there a distant third at 12.

Now look at Pennsylvania, Rick Santorum`s home state, which doesn`t
vote until April. Santorum has a statistically insignificant 1-point lead
over Romney in the latest Susquehannah poll, 30 to 29. I think that is
important, though. And Gingrich is down at 13. If he can beat him there,
that`s a big win for Santorum.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RICK SANTORUM (R-PA), FMR. SEN., PRESIDENTIAL CANDIDATE: There`s no
compromise here. They`re forcing religious organizations either directly
or indirectly to pay for something that they find is a deeply morally --
morally, you know, wrong thing. And this is not what the government should
be doing!

(END VIDEO CLIP)

MATTHEWS: Well, he`s wrong there. Welcome back to HARDBALL. Rick
Santorum`s making clear he opposes President Obama`s compromise on
contraceptive coverage. Doesn`t surprise me at all. He now has an issue
he thinks is tailor-made for him. Well, could Rick Santorum ride this to
the nomination, this issue? Is this the perfect political outcome for the
Obama administration?

Well, chief of staff Jack Lew said they didn`t expect to win over the
bishop on this issue, the Catholic bishops. But has Obama won over the
middle?

(BEGIN VIDEO CLIP)

JACK LEW, WHITE HOUSE CHIEF OF STAFF: We didn`t expect to get the
universal support of the bishops, or all Catholics. I think that what we
have here is a policy that reflects bringing together of two very important
principles in a way that`s true to the American tradition.

(END VIDEO CLIP)

MATTHEWS: Well, David Corn is an MSNBC political analyst and
Washington bureau chief for "Mother Jones" magazine.

You know, David, I think the two principles there (INAUDIBLE) respect
for the 1st Amendment and religious liberty, but also a respect for women`s
rights and what`s now seen by today`s standards as full health coverage.

DAVID CORN, "MOTHER JONES," MSNBC POLITICAL ANALYST: The interesting
thing about this was that the Obama administration made this decision after
much deliberation and internal discussion. And they got caught up in this
firestorm that, obviously, they didn`t see coming. And afterwards, it`s
obvious that they should have seen it coming. And our friends like E.J.
Dionne and Melinda Henneberger, all last week on this show and elsewhere,
were saying, What went wrong here? But they ended up getting to a point...

MATTHEWS: I, by the way, appreciated what they say.

CORN: Yes. They ended up getting to, I think, a really good point
for them policy-wise and politically. You know, they got all this
response. And they said, Hey, we`re going to take another look at this.
We don`t like getting clobbered by the bishops or anyone else.

And they went back in and they came out with a compromise that has the
exact same outcome. Women will still be able to get contraception without
co-pay...

MATTHEWS: But the church won`t have to put its imprimatur on it.

CORN: ... the church won`t have to put -- and so the only people who
have an issue here now are those who make the claim that Obama wants to
have a war on religion. So that`s a far-right enterprise. And you saw
Rick Santorum...

MATTHEWS: Well, I thought the people who liked this fight were the
bad guys. And I think that -- I think that -- I think Santorum wants this
issue.

CORN: Of course, he does.

MATTHEWS: And you tell me why.

CORN: Well, on Friday at CPAC, which we talked about last week, after
the compromise had been announced, you had Mitt Romney and Rick Santorum
certainly beforehand and Newt Gingrich afterwards saying that Obama has a
war on religious liberty, he doesn`t like religion. And they`re trying to
appeal to the religious right voters.

So you have three guys put there doing this. Two of them are
Catholic. One is a long-time Catholic. That`s Rick Santorum. Newt was a
convert. And Mitt Romney was a Mormon, whom some evangelical Christians
still have problems with. So the three there -- Rick Santorum has the
longest pedigree as someone to talk on these issues. And he`s making the
most effective run on Romney at the moment.

MATTHEWS: Let`s take a look at some numbers here, a poll taken --
this was taken last week, before the compromise, by the way, by the
nonpartisan Public Religion Institute. Here it is. Shows broad support,
even among Catholics, for employers to provide health care plans that do
cover contraception at no extra cost, no co-pay. Among all Americans --
look at these numbers -- 55 percent support, 40 percent disagree. Among
all Catholics, even more agree -- 58 percent of Catholics agree. Among
white Catholics -- this is a weird political way they do this with polling
-- white Catholics, meaning non-Hispanics Catholics, 50 percent.

CORN: Yes.

MATTHEWS: And there you have the strength of the position even
before.

I would say, just guessing, after the compromise on Friday, when the
president came out very forcefully and forthrightly, said, OK, we didn`t
get it right the first time. We`re going to make sure it`s the insurance
companies that handle this matter and pay it, and we are not going to make
the religious organizations, even Catholic Charities and people like that,
university and colleges that do it.

So he fixed it. You know what I liked about it? What you just said,
a willingness to listen and to tweak and to fix when you`re not exactly
right the first time.

CORN: Yes.

People don`t like politicians who say they are right all the time,
unless you`re talking about the extremes on either side of the ideological
spectrum. For someone to come out and say I made a good faith effort, we
kind of screwed the pooch a little bit here, and we didn`t take into
account what some people said, even though we looked at it early, and I`m
going to be flexible and change and come up with a compromise that that
poll show and other polls show is likely to be highly popular with people,
I think is telling. It`s a good quality to have in a leader.

MATTHEWS: And, by the way, I want to say this. And I don`t speak for
anybody on this show except myself, but there are a lot of people out there
who are Catholics who are Democrats, who are progressives by the new term,
liberals by the old term, who really do believe in women`s rights these
days, but also recognize that their church shouldn`t be abused.

It shouldn`t be asked to do something it doesn`t believe, even if we
do.

CORN: Right. Right.

MATTHEWS: So I think they did handle it very well. I thought that
the president, and from what I have been able to get from the White House,
understood exactly this.

Here`s -- by the way, late Friday afternoon -- an interesting nuance
here -- late Friday afternoon, after he heard the president`s conciliatory
remarks and his compromise, Archbishop Timothy Dolan of New York said in a
statement that the U.S. Conference of Bishops -- quote -- "sees initial
opportunities in preserving the principles of religious freedom after
President Obama`s announcement today."

Well, a few hours later, the bishops across the country took a much
harder line, saying in a statement -- quote -- "The only complete solution
to this religious liberty problem is for HHS to rescind the mandate of
those objectionable services."

Alex Wagner now joins us.

Alex, from MSNBC, my colleague up there in New York, you have been
covering this thing as well as I have. Your sense as to the way the
president handled this, please.

ALEX WAGNER, MSNBC POLITICAL ANALYST: Last week, I thought it was a
massive fumble. But I think the reaction from the bishops and both from
the GOP over the weekend and today is going to actually help the White
House in the long run, because if we`re looking at this 2012 race, the idea
that now the right is willing to litigate the issue of birth control, not
abortion, but birth control, among all private employers works incredibly
well for the president.

Looking at the independent and swing vote, these are women that he has
to appeal to. They tend to be younger -- 60 percent of these swing voters
are under the age of 49. They`re about a quarter minority. This is an --
birth control is an issue that resonates with every woman in America.

MATTHEWS: Yes. And you went over it rather quickly and explained the
issue is no longer the exemption for religious organizations like Catholic
Charities or other religious groups.

The issue now is whether the national health care plan promulgated and
passed by the president and signed by the Congress should include health
care which includes reproductive -- not reproductive -- should include very
narrowly birth control. And the right is opposing that.

WAGNER: Exactly.

I think that the right has miscalculated. To a certain degree, they
think that they can wave the sort of religious liberties banner and they
are going to have a big tent underneath it. I think it`s a gross
miscalculation, again, especially when you look at the demographics. This
is an issue of birth control and contraception.

Every woman in America over a certain age has made a decision about
it. It`s an incredibly personal issue. And I think again the right is on
the wrong side here.

MATTHEWS: And even though the Catholic Church takes a position
against birth control still, the fact of the matter is, it does in fact
reduce the amounts of abortions dramatically. Let`s face it. It`s the
number-one way, obviously besides abstinence. But it`s the number-one way
to really prevent it.

CORN: And the numbers are staggering -- 98, 99 percent of Catholic
women who engage in sex use some form of birth control. So the church
doesn`t have a lot to stand on here.

(CROSSTALK)

MATTHEWS: By the way, the church knows that. I go to Catholic
Church. Let me tell you, David, I know something you don`t know. When you
look into the pews, there are very few families of eight anymore.

CORN: Right. Right.

WAGNER: Exactly.

CORN: Something is going on there.

MATTHEWS: No, it`s not all...

(CROSSTALK)

CORN: But Alex`s point is the right one.

MATTHEWS: It`s not rhythm either.

CORN: If the Republican Party is going to fuse itself to the Catholic
Church on these issues, it`s going to end up in a minority position.

MATTHEWS: Well, OK, I think the church has a -- I have always
accepted the right of the church to its moral authority and to what it
believes.

CORN: Yes.

MATTHEWS: In terms of law and in terms of public policy, Alex,
different question, right?

WAGNER: Yes. There`s a huge difference between the two.

The one thing that I think it does do, if we`re looking at this race,
this is a great moment for Rick Santorum, a terrible moment for Mitt
Romney, and a very bad moment for the Republican Party. I think we talk
about the magnetic polls being shifted in this race. They go ever more
rightward these issues being on top of the list, and Rick Santorum being a
surging candidate right now.

And it pushes Mitt Romney into a corner that he`s not comfortable
being in. His record doesn`t evidence someone that believes in this.

(CROSSTALK)

MATTHEWS: And, also, Alex, I have to cut you off. But he does not
even speak this language. He doesn`t even know -- he is not fluent in this
language, among other right-wing languages. He doesn`t know the one about
birth control.

Thank you, Alex Wagner, for joining us on HARDBALL. Please come back
again as often as you can. And come a little earlier next time.

(CROSSTALK)

WAGNER: Thank you, Chris. It is a true pleasure. It is a true
pleasure, sir.

(CROSSTALK)

MATTHEWS: Thank you, colleague.

Up next: Did Mitt Romney`s campaign rig the CPAC straw poll? It was
electronic this time, but did he pack the room? That`s the charge from a
rival campaign next in the "Sideshow."

(COMMERCIAL BREAK)

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

First up: Game over? We all know that when it comes to Super Bowl
Sunday, the commercials can sometimes draw as much attention as the game
itself. This year was no exception, especially with Chrysler`s halftime in
America ad starring Clint Eastwood. Was halftime a reference to President
Obama`s time in the White House?

Well, "Saturday Night Live" was out this weekend with their own
follow-up to the much-talked-about ad. Let`s watch.

(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")

UNIDENTIFIED ACTOR: During the Super Bowl, I said it was halftime for
America. I tried to make an inspiring ad that would rally our country.
Well, guess what? Halftime is over.

We`re in the third quarter now, America. And we`re way behind. So I
don`t care if Obama runs the ball or Romney throws a touchdown or Ron Paul
kicks a field goal. I`ll tell you right now, though, I ain`t putting
Santorum in the game.

What is this commercial for again? All right, Chrysler. Get a
Chrysler. And get off my damn lawn.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: Well, the jury is still out on how that ad will influence
presidential politics, but it sure had a lot of us thinking about more than
just buying a Chrysler.

And, finally, rock the vote? More like rig the vote in this case.
Last week, we found out that the CPAC organizers were taking steps to avoid
the embarrassing outcome of Ron Paul winning their straw vote yet again
this year. Was it their strategy of switching from paper to electronic
ballots that did the trick?

Anyway, Rick Santorum was certainly the man of the hour this weekend
for many of the attendees, so why was it that Mitt Romney come out on top
in the actual vote?

Well, here is what Santorum had to say on that one.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: For years, Ron Paul has
won those because he just chucks at a lot of people, pays for their ticket,
and they come in vote and then they leave.

I don`t try to rig straw polls. You have to talk to the Romney
campaign and how many tickets they bought. We have heard all sorts of
things.

(END VIDEO CLIP)

MATTHEWS: Wow. Well, a "New York Times" piece had noted earlier that
the Romney campaign was -- quote -- "busing students from colleges along
the Eastern Seaboard to show their support."

When asked later if the campaign had in fact paid for votes, a
spokesman for Romney sidestepped the question, choosing instead to take a
general swipe at Rick Santorum`s credibility. Dodged the question.

Up next: Mitt Romney says he was -- I love this phrase -- severely
conservative as governor of Massachusetts. And a lot of people can`t
figure out what he meant by that phrase, severely. Anyway, one thing is
for sure. This guy has big problems connecting with conservatives or
anyone actually. And that`s giving Rick Santorum his opening right now.
Look at the polls we`re going to show you.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BRIAN SULLIVAN, CNBC CORRESPONDENT: I`m Brian Sullivan with your CNBC
"Market Wrap."

The Dow gaining 73 points today. The S&P 500 also moving higher. And
you have got Nasdaq is up as well. Pretty good day for Apple Computer,
Apple actually up -- get this -- more than $500 a share, now worth half-a-
trillion dollars. The big mover in the markets, though, Greece. The
approval there of the austerity measures allowing it to secure a bailout
and hopefully, hopefully avoid, this default despite widespread protests.

And, as we said, Apple now worth half-a-trillion, as investors look
ahead to the iPad 3.

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

MATTHEWS: What a weekend. Welcome back to HARDBALL.

Mitt Romney was able to survive this weekend, pulling out wins in both
the CPAC poll here in Washington and the low-attended Maine caucuses. But
it`s his line -- or this lien from his appearance at CPAC on Friday which
has really caused quite a stir.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I fought against long odds
in a deep blue state, but I was a severely conservative Republican
governor.

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Well, what exactly does severely conservative mean?

Anyway, there`s more trouble for Romney. A new Pew poll out just this
afternoon has Rick Santorum now two points ahead of him in a national poll
30-28 over Romney with Newt Gingrich way behind.

One month ago, just to put this in perspective, Romney was leading
Rick Santorum 2-1 -- actually more than 2-1. Add to that this afternoon,
the editors of "The National Review" are calling on Gingrich to skedaddle
out of the race -- quote -- "When Gingrich led Santorum in the polls, he
urged the Pennsylvanian to leave the race. On his own argument, the proper
course for him now is to endorse Santorum and exit."

Well, joining me right now is an expert to talk about this. The
latest Republican race experts are Mitt Romney supporter Charlie Black, a
fellow Washingtonian here that I know quite well, and Rick Santorum
supporter Foster Friess.

Thank you.

Foster, do you think it`s time for Romney or Santorum to quit the
race? I`m sorry, Romney or -- who are you for? You`re for Santorum.

(LAUGHTER)

FOSTER FRIESS, FOUNDER, FRIESS ASSOCIATES: I`m a Santorum guy.

(CROSSTALK)

MATTHEWS: Well, who do you want to quit the race? "The National
Review" says to Gingrich to get out because he`s just going to prevent your
candidate from getting the shot he needs 50/50, one on one.

FRIESS: No, I think it would be great if Newt stayed in.

I love Newt. I love Mitt. They are wonderful people. They`re
national treasures. And I think the more we get to know them, it will also
hone Rick`s debating skills and you will get to know Rick Santorum better
as they challenge him and go after him, and so you can see the real Rick
Santorum. And I think that will be a blessing for everybody.

MATTHEWS: So you can beat -- I assume you`re saying that you have
enough surge, enough big mo` going right now that you can beat Romney even
with Gingrich in the race?

FRIESS: Well, you maybe saw the Michigan poll, Chris, where they show
39 percent for Santorum and 24 percent for Romney and 11 percent for...

(CROSSTALK)

MATTHEWS: We announced it earlier. But that`s before the Dresden
bombing.

I want to go to Charlie Black.

When does the bombing commence? Because I know your candidate has two
strategies. Don`t debate if you don`t have to and bring in the bombing
patrol and bomb the heck out of a state and kill the other guy in negative
advertising.

CHARLIE BLACK, REPUBLICAN STRATEGIST: After 18 debates? We love the
debates.

MATTHEWS: Oh, yes? You`re asking for more, aren`t you? You have got
one left, I think.

(CROSSTALK)

BLACK: The two debates before the Florida primary contributed greatly
to Mitt Romney`s victory there.

MATTHEWS: So you want more debates? On behalf of the candidate,
you`re going to ask for more debates?

(CROSSTALK)

BLACK: No, I just said we have had 18 and, so far, they have worked
well for Mitt Romney. There`s another one actually next week, though.

MATTHEWS: Yes.

BLACK: But, listen, the great majority of negative ads in this
campaign have been run by the super PACs...

MATTHEWS: Yes, your guys.

BLACK: ... which the candidates can do nothing about.

Well, not exactly. If you look at the Gingrich super PAC, you will
find some negative ads out there.

(CROSSTALK)

MATTHEWS: We did a study on Florida. It`s something like 62 percent
of the ads were negative on Gingrich -- 1 percent was positive for your
candidate. So even your own candidate wasn`t running positives on himself.

He was trashing Gingrich with his own ads, plus the super PACs. So
it`s not true to say your guy is running a positive campaign.

BLACK: I didn`t say that.

MATTHEWS: OK. I thought you did.

BLACK: But I said the super PACs have run a lot more negative ads
than the campaigns.

(CROSSTALK)

MATTHEWS: I thought you were blaming everything on the super PACs. I
misheard you.

BLACK: Well, go back and check and see what percentage of the
negative ads were run by super PACs, number one.

Number two, there`s a lot of material on Newt Gingrich that voters
either didn`t remember or never knew about his record and about his baggage
and about the fact that he could not win a general election against
President Obama. So that is fair game in politics, as you recall. You
talk about your opponent...

(CROSSTALK)

MATTHEWS: Are you going to do the same -- I`m going to get back to
Foster. You going to do the same thing to Santorum in Michigan?

(CROSSTALK)

BLACK: I think...

MATTHEWS: Go ahead, Foster.

FRIESS: I`m just eager to see Santorum more and more known by the
voters, because I think he was going out of the Iowa speech with press
people saying he could be the first time a blue-collar candidate was
proposed by the Republicans.

He spoke to the need of getting these fellows hired back on these
small towns where the employment has gone away because it`s gone to China
because of our high tax rate. So Rick`s idea to take the tax rate down to
zero for manufacturing companies endears him to these blue-collar workers.
He`s won before.

We had a one million Democratic disadvantage. And at his speech, when
he talked about his grandfather digging coal until he was 72 and also dug
Rick Santorum`s freedom to run for president, I think it was a pretty
moving speech.

MATTHEWS: Yes.

FRIESS: And I think people are being captivated by the charisma of
Rick Santorum.

MATTHEWS: Let`s take a look now at what Sarah Palin said over the weekend
with Chris Wallace. I thought it was fascinating how she went after
Romney, denying really that he makes the grade with her.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS: Do you trust that Mitt Romney is an
instinctive conservative?

SARAH PALIN (R), FORMER ALASKA GOVERNOR: I trust that his idea of
conservatism is evolving. And I base this on a pretty moderate past that
he has had, even in some cases, a liberal past. I am not convinced, and I
don`t think that the majority of GOP and independent voters are convinced.
And that is why you don`t see Romney get over that hump.

(END VIDEO CLIP)

MATTHEWS: And let`s listen to Foster. Your real knee slapper that
you delivered at CPAC this weekend. I think it`s one of the funny jokes
I`ve heard in awhile. Here you are saying what you really think about your
opponent Mitt Romney at CPAC.

(BEGIN VIDEO CLIP)

FRIESS: There`s a little bar a couple doors down. And recently, a
conservative, a liberal, and a moderate walked into the bar. The bartender
says, Hi, Mitt.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: What do you think of that, Charlie? He`s accusing your
guy of being three faced.

BLACK: Let me tell you some facts: Mitt Romney`s record as governor
of Massachusetts was conservative.

MATTHEWS: Severely?

BLACK: Strictly, which means the same thing as severely. Strictly
conservative. He inherited a $3 billion deficit and turned it into a $2
billion surplus without increasing taxes, by cutting spending, by vetoing
and eliminating a lot of programs -- exactly what needs to be done in
Washington.

MATTHEWS: Right.

BLACK: His record was pro-life and he stood up for traditional
marriage when the state supreme court came out against it.

Now, that`s a better record, frankly, than Rick Santorum had in the
Senate or that Newt Gingrich had as speaker.

MATTHEWS: Foster, how do you like that? He`s describing -- Charlie
is describing Mitt Romney as a conservative, as severely conservative --
strictly governor. That`s not the way you guys describe him, is it?

FRIESS: Well, I don`t want to go too much into Mitt Romney`s varying
policies, but I thought it was quite humorous when Huntsman says the guy
has no core convictions. And then in two days, endorses him. So, that`s
kind of the humor we get in politics.

But when Mr. Black says Santorum`s record is less than Mr. Romney`s,
we have to remind people that as a 42-year-old senator, he managed the
Welfare Reform Act on the floor of the Senate and was elected third most
responsible person in the Republican hierarchy in leadership. And so, the
people that are there and know him as a person should respect his
leadership.

He championed the line-item veto, championed the balanced budget
amendment, and also had the leadership to take the national security issues
to the foreground where he championed the freedom, the Iranian Freedom and
Security Act, and also the Syrian Accountability Act.

MATTHEWS: OK.

FRIESS: So the nice thing about Rick Santorum --

BLACK: I respect Santorum and I expect Mr. Friess. But Rick
Santorum is a Washington insider. He did spend his adult life in the
Congress, voting for earmarks, more spending. He did not bring reforms to
the federal government like Mitt Romney brought to Massachusetts, the
turnaround of the Salt Lake City Olympics.

What Mitt Romney has done his whole adult life outside of Washington
is take over big organizations with big problems and fix them and reform
them. That`s what the voters want. Not another Washington.

MATTHEWS: Yes, I`m afraid, though, that the campaign coming up on
the 28th of this month is going to be another Dresden bombing. I think
what your candidate is going to do, Charlie, is not make that sort of
sophisticated case. He`s going to use advertising both through his super
PAC and through his own campaign to destroy Rick Santorum with a heavy
bombing raid.

BLACK: Wait a minute. Mr. Friess has a super PAC, too.

(CROSSTALK)

MATTHEWS: Well, nothing matches the Romney campaign.

BLACK: My gosh!

MATTHEWS: Anyway, thank you, Charlie Black, right here.

And Foster Friess -- very intellectual fellow, by the way, Foster.
Please come back.

Up next, we`re going to look back on the life and career of singer
Whitney Houston, who died this weekend.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Stay with us. We`re coming right back with the sad death
of singer Whitney Houston. That`s coming up next here on HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

The music industry and her many fans, of course, are still in shock
over Whitney Houston`s death on Saturday. It surprised me, I bet you.

Look, according to the "Associated Press," Houston battled drug
addiction for years, including cocaine, marijuana, and pills. They took a
poll on her once remarkable voice and she had been largely off the culture
radar, of course, in recent years.

Last night, the Grammy`s many artists paid tribute to the legendary
singer. Let`s listen.

(BEGIN VIDEO CLIPS)

LL COOL J, ENTERTAINER: There`s no way around this. We`ve had a
death in our family.

ALICIA KEYS, SINGER: When the truly great artists leave us, their
legacy lives on. We love Whitney Houston.

STEVIE WONDER, SINGER: I just want to say to Whitney up in heaven --
we all love you, Whitney Houston.

(END VIDEO CLIPS)

MATTHEWS: The great Stevie Wonder.

Well, Kate Coyne is assistant managing editor at "People." And, of
course, David Wilson is one of our colleagues here. He`s managing editor
and founder of TheGrio.com.

I guess -- I don`t know where to start here. Let me go to David
first, my colleague, about this.

You grew -- you have a personal history. So, tell us what your
reaction was and how you think all this tragedy fits in or doesn`t fit in
with her life.

DAVID WILSON, THE GRIO: Well, I grew up in Newark. Like so many
people in Newark, my family had some acquaintance with members of her
family. And so, she was the pride of Newark.

Now, I grew up in Newark during the `80s. And, you know, it was
infested with crack and drugs and all sorts of violence. And here we have
this beautiful young sister who had a voice that was made of crystal. And
she represented the city.

And for a young kid growing up in Newark, it was symbolic. It meant
that something beautiful can come from the city. And that you can make it
out of the city and you can be great.

And so, that`s what she represented to us. She was, you know, just a
bigger than life star for us.

MATTHEWS: How old was she when she became sort of a celebrity, a
star as a singer?

WILSON: She was pretty young. When she, you know, her big video
that everyone remembers, you know, the greatest love of all. She was
relatively young at that particular age.

But one thing significant about her is the fact that she came during
the beginning of the MTV era. And the -- why she was so big was because
her voice was only matched by her beauty, her physical beauty.

MATTHEWS: Yes, I agree with you. Boy, that is so much the truth
about the music industry which is once it went visual, you really got to
know the people.

You know, I grew up in the `60s. I didn`t know what anyone looked
like. You knew it from the album covers. But looks weren`t important but
they certainly became important.

Let me go back -- let me go over to Kate here.

Kate, you know, we all knew her problems with Bobby Brown. We didn`t
know it all, but dying, you know it just blew us away this weekend that
she`s dead.

KATE COYNE, PEOPLE MAGAZINE: Absolutely. I mean, no matter what
people knew of the problems she`d had over the years, the struggles, both
with Bobby Brown and really struggles that she had that had nothing to do
with Bobby Brown and it existed long after that marriage ended. You just
did not expect this. You didn`t see this coming.

There was perpetual hope where Whitney was concerned.

MATTHEWS: I agree.

COYNE: She was always going to be able to turn it around. You just
always felt that at some point, the real comeback would occur. That the
prime Whitney who everybody loved from that decade, from `85 to `95,
roughly, would once again be back. And it hadn`t happened yet, but there
was always that hope that it was going to happen.

MATTHEWS: Well, I love the movies "The Bodyguard" with Costner and,
of course, with Denzel, "The Preacher`s Wife" -- fabulous movies. And this
thing about the way these guys go, and I was thinking of Janis Joplin and
Jimi Hendrix and all, Kate, you cover the business, the industry, the music
business. It`s only when they die we realize how badly they lived.

COYNE: How badly they lived, but also now, there`s more recent
phenomenon. It`s only when these people die that we`re coming to
understand how serious prescription drugs are, not saying that they
necessarily played a role in Whitney`s actual death, but, you know, the
sort of epic drug abuse stories we`re used to from, you know, years past.
These are now the stories --

MATTHEWS: Judy Garland. It goes all the way back.

COYNE: Exactly. These are now the stories with Heath Ledger,
Brittany Murphy, Amy Winehouse. You know, the toxicology reports on those
cases showed not heroin, not cocaine but valium, Xanax, Ambien, these are
the sorts of drugs now that are claiming lives.

MATTHEWS: VIP drugs. VIP drugs. Do you know anything about that,
David?

We don`t know anything about -- I was watching the assistant chief
coroner today. And he`s a very -- I listened to him, he`s a very good, it
seems like. He`s not ready to say anything yet as of tonight. But it does
seem like this story of Joplin and Hendrix and Morrison, what a pattern.

WILSON: Yes, and it`s very important. I know it`s very tough to
talk about, especially right after someone just passes. But I think we
have to remember -- in as much as her voice was an inspiration to so many
people, her life and the way she led her life should be a cautionary tale
to so many folks who want to get into this business and who just want to
advance their life, that you know, drug addiction, if it doesn`t kill you,
it can kill your talent.

And so, I think that`s very important for us to reflect. I know it`s
uncomfortable to talk about.

MATTHEWS: Yes.

WILSON: But it`s also a very teachable moment for so many people who
looked up to her.

MATTHEWS: I think the rule is take the fantasy as it comes. Don`t
try to create it.

Hey, Kate Coyne, thank you so much. Thank you, David Wilson. It`s
great. I don`t like having you on for this reason, but thanks for coming
on.

Now, here`s one of Whitney Houston`s most iconic moments, of course,
when she sang the national anthem at the Super Bowl in 1991.

(VIDEO CLIP PLAYS)

(COMMERCIAL BREAK)

MATTHEWS: "Let Me Finish" tonight with this:

President Obama has two jobs on his hands right now -- lucky for him
and historically he tends to be lucky -- the two work in tandem.

Job one: get people back to work. He can do this in three ways.

He can use the government. He`s doing that with his American jobs
bill which he`s been pushing since last September.

He can do it by encouraging business to hire people. He`s been doing
that by pushing for a continuing cut in the payroll tax rate.

He can do it by increasing consumer confidence. He`s getting that
job done by cutting the jobless rate. Good economic news leads to good
economic news. The more people read about the jobless rate coming down as
they have, the more lucky they are to take chances on buying decisions.
The more they do that, the better it is for the economy.

So, today, he put out a budget that continues doing what he`s doing:
creating jobs. It spends a half trillion dollars on highways and rail --
real good investments in our country`s future, investments that get people
where they have to get, to do business and spend money. It creates lots of
good high-paying jobs getting those roads built and fixed and those rails
laid.

The Republican opposition has its own goals. Does the Republican
philosophy of lower deficits coincide with its ambition to keep Obama from
a second term? Well, as Sarah Palin might put it: "You betcha." If Mitch
McConnell and John Boehner can crunch government spending in the short run,
they can cut off the growth in jobs. If they can do that, they can help
bring about the defeat of their political opponent, Barack Obama.

So, it`s clear as far as we can see right now, the politics and
philosophies of the two parties are clearly at odds with each other.
President Obama wants jobs. Republicans want to cut spending right now.

Don`t kid yourself. This is the name of the game and both sides
intend to win it.

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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