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updated 5/22/2012 3:22:09 PM ET 2012-05-22T19:22:09

Guests: Pete Williams, Sue Herera, Howard Fineman, David Corn, Eugene Robinson, Simone Campbell, Erin McPike

CHRIS MATTHEWS, HOST: I`m Chris Matthews in Florida.

Let`s play HARDBALL.

We`re going to now go right now -- we`re going right now to David Corn
and also to Howard Fineman, who are in Washington right now with a response
to the president`s press conference.

Howard, the news there, I think, was probably the president`s deft
handling of that sabotage, intended or not, by Cory Booker the other day on
"MEET THE PRESS." I`ve never seen -- I have to tell you, in the years of
covering politics, I`ve never seen anything like what we saw on "MEET THE
PRESS" there. We should call it "Mess the Press" or "Meet the Mess," I
don`t know what we`re going to call it now.

(LAUGHTER)

MATTHEWS: (INAUDIBLE) are getting worse. This mishegoss never stops.

HOWARD FINEMAN, HUFFINGTON POST MEDIA GROUP, MSNBC POLITICAL ANALYST:
Yes. Well, I think what Cory Booker was doing there is -- after all, from
Newark, across the river from Lower Manhattan, was defending the --
defending the private equity business that supplies jobs in Newark and in
northern New Jersey. But in doing that, he really caused a political
headache for the president.

And I do think the president gave a good explanation of why he thinks
and why his campaign thinks that the question of what private equity firms
do, whether it`s good or bad one week or the next, is central to the
question of how the economy operates and how it can be revived over the
next two years.

So the president didn`t shrink from it. He said, This is not a
distraction, which is the word that I think Cory Booker had used. He said,
It`s central, it`s central to the debate, let`s have the debate.

I don`t think that if Mitt Romney is going to run on the basis of his
business experience, if all of his business experience is in private
equity, in flipping companies, that that`s necessarily the best model for
how to run the American economy.

The president runs the risk, in my view, that he`s got to be careful
here not to seem like he`s against the idea of profit. But if he can make
the surgical distinction between the way the American economy works and the
excesses of private equity, then I think he`ll have a winner. But it`s a
tricky row for him to hoe, I think.

DAVID CORN, "MOTHER JONES," MSNBC POLITICAL ANALYST: Well -- well,
what was interesting...

MATTHEWS: Just a second here, David, David Corn. I want you to just
hold while we watch the president now do this very intricate response to
what the mayor of Newark said yesterday, which I think was an act of
sabotage. Whatever the intention was, he was trashing the entire Obama
campaign of the summer in one appearance on "MEET THE PRESS."

Let`s watch the president today trying to defend himself against what
looked like -- something like a betrayal. Let`s watch.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What I would say is, is
that Mr. Romney is responsible for the proposals he`s putting forward for
how he says he`s going to fix the economy. And if the main basis for him
suggesting he can do a better job is his track record as the head of a
private equity firm, then both the up sides and the down sides are worth
examining.

(END VIDEO CLIP)

MATTHEWS: Let`s recap here for our audience who didn`t watch "MEET
THE PRESS," David, before you come back here. I watched "MEET THE PRESS"
yesterday and I watched Cory Booker, a very impressive fellow with an
incredible education, including Stanford, behind him.

And he went on television and basically said the president`s entire
campaign, which is to go after Bain Capital, to go after Mitt Romney, his
presumed opponent in this election, attacking Romney for destroying jobs as
head of Bain Capital -- he said he was basically a job destroyer. They`ve
been putting on one ad after another making this point.

On comes Cory Booker, supposedly a surrogate for President Obama,
comes on the show listed as a surrogate, points out he`s got surrogate
notes in his hand, says he`s been working as a surrogate, and then trashes
the entire campaign by saying, There`s really nothing wrong with private
capital, nothing wrong with Bain Capital. I fire people. He fires people.
So what? This is all good for American capitalism.

It was an incredible 180 on everything the president stands for in
this campaign. The president just went (ph) and tried to deal with it
right now.

But I`ll tell you, it was astounding that they`ve listed this guy as a
surrogate when he is intending to go on television and trash everything
Obama is making a case for.

Now your thoughts, David? I`ve never seen anything quite like this we
saw on "MEET THE PRESS" yesterday.

CORN: Well, think it was a remarkable performance yesterday, from
Cory Booker`s perspective. And usually, he`s pretty dead on and a sharp
fellow.

But to me, the more important point is what the president got to in
responding to this just a few minutes ago. He made the distinction between
creating jobs and creating wealth and profits. And he said, Listen, if you
think that the only thing you have to do as president is to maximize
profits for the investor class, well, then you really don`t understand this
job.

So this is an argument that he himself, the president, was going to
have to make at some point in time. While his campaign takes all these
anti-Bain ads out and sort of makes the case, he has to get out there and
really sort of deliver it and make this larger point that, yes, you may
have been doing good for investors or not, but there`s something bigger,
that running this government, running this country...

MATTHEWS: OK, why does Mayor Booker...

CORN: ... is not the same...

(CROSSTALK)

MATTHEWS: Just a minute, guys. Just a minute. Why does Mayor
Booker, who`s on the show as a political figure, not as a spokesman for
capitalism or a spokesman for private equity -- why did he choose to choose
sides against the president yesterday and say, I`m with private equity
against the president, the president`s campaign is wrong, I`m with private
equity?

(CROSSTALK)

MATTHEWS: He chose sides yesterday. He didn`t say the president was
part right.

CORN: No, no, no...

FINEMAN: I got two answers to that. One of them is Cory Booker has
positioned himself as someone who, like Barack Obama a few years ago, is
fed up with the way the system runs, the excesses of the system, the
nastiness on both sides. I think he was trying to make that point
yesterday, as well.

And in addition, Cory Booker is from a part of the Democratic Party
that hopes that the estrangement between Wall Street and the Democrats is
not permanent. Don`t forget, what`s going on behind the scenes here,
Chris, is that Wall Street and the banks, which were cozying up to Barack
Obama in the 2008 election, have abandoned him wholesale and are going
after him viciously.

And Cory Booker understands the recent 20 or 30 history -- year
history...

MATTHEWS: OK...

FINEMAN: ... of the Democratic Party, and he`s trying to prevent the
breach, in the process of which...

MATTHEWS: What`s the word "surrogate" mean?

(CROSSTALK)

MATTHEWS: What does the word "surrogate" mean?

CORN: But you know, there`s a third point...

MATTHEWS: What`s a surrogate, Howard? What`s a surrogate?

FINEMAN: Well, I don`t know, Chris, how he came to be defined that
way...

MATTHEWS: He is. The White House calls him a surrogate. He pulled
out the notes on the show yesterday and said, I`ve got my surrogate notes
here, and he showed the notes.

(CROSSTALK)

FINEMAN: Well, that`s what he was saying. I think what he was saying
-- David, I`m sorry -- but I think what he was saying is, I don`t want to
play just the surrogate thing...

CORN: Right.

FINEMAN: ... that this whole surrogate thing...

MATTHEWS: Oh!

FINEMAN: ... is part of what`s wrong with politics.

CORN: But this is -- this is...

FINEMAN: OK? That`s what I think he was doing.

CORN: This is the third point on Howard`s list. Cory Booker was
being Cory Booker, not a surrogate. He has developed this...

MATTHEWS: OK...

(CROSSTALK)

MATTHEWS: Guys, you`re hopeless. Let me just tell you something...

CORN: ... partisan politics.

MATTHEWS: What`s the word "nauseating" mean? He said he was
nauseated. He found Obama`s ads nauseating.

CORN: He is...

(CROSSTALK)

CORN: No, no. It`s not. Cory Booker, though, has defined his
political career as taking on the powers that be, whether they`re in his
own party or not, and putting himself as the truth teller above all this.

Now, if you hire him as your surrogate, you`ve got to be wary of that
because at the end of the day...

MATTHEWS: Oh, OK. You know...

CORN: ... it`s about Cory Booker. He was not serving the president
well, but he thought at the time...

(CROSSTALK)

MATTHEWS: There we are. There we are.

FINEMAN: ... that he was serving himself.

MATTHEWS: Let`s take a look at him. Right. I think he`s the man
that shot Liberty Valance today. But let`s take a look. And here -- here
are the Bookerisms of yesterday, Howard. I want you to go through them.

FINEMAN: OK.

MATTHEWS: First of all, I fire people, like I like firing people. He
quotes himself practically in synch with the -- like he`s synchronized-
swimming with the president. And then he goes on and talks about how
private equity is great and we shouldn`t talk about Bain Capital firing
people.

Let`s let him talk in his own words. I thought it was unbelievable.
Here he is, Cory Booker, mayor of Newark.

(BEGIN VIDEO CLIP)

MAYOR CORY BOOKER (D), NEWARK NJ: I`m not about to sit here and
indict private equity. It`s -- to me, it`s just this -- we`re getting to a
ridiculous point in America. If you look at the totality of Bain Capital`s
record, it -- they`ve done a lot to support businesses, to grow businesses.
And this to me -- I`m very uncomfortable.

This kind of stuff is nauseating to me on both sides. It`s nauseating
to the American public. Enough is enough!

(END VIDEO CLIP)

MATTHEWS: OK, well, now, here he comes back with, I like to fire
people, too. Here he comes.

CORN: OK.

MATTHEWS: More coming here. It never stops.

(CROSSTALK)

CORN: Keeps on coming!

(LAUGHTER)

(BEGIN VIDEO CLIP)

BOOKER: I talk to the White House quite often. I`m a surrogate for
the Obama campaign. The sexy stuff of campaigns that the media plays over
and over again, that we`ve wasted time talking about, is this negative
stuff. The reality is that we have -- and I listen to Obama, and I have
Obama surrogate notes here...

(END VIDEO CLIP)

FINEMAN: All right, he...

(CROSSTALK)

MATTHEWS: OK, I`ve got Obama surrogate notes here, which he`s not
relying on. More coming...

(CROSSTALK)

MATTHEWS: Here comes the fact that, I fire people, too. Let`s watch
this.

FINEMAN: Yes.

(BEGIN VIDEO CLIP)

BOOKER: This is not about what happened in Bain Capital. Heck, I`ve
reduced employees in my city 25 percent because it`s the only way my
government would survive. Call me a job cutter, if you want.

(END VIDEO CLIP)

CORN: He is not...

MATTHEWS: Call me a job cutter. No, let`s not call you a surrogate
anymore. You first...

CORN: No, well, obviously...

MATTHEWS: Who goes first, Howard, David? David, first.

(CROSSTALK)

FINEMAN: I yield time to David.

CORN: He was out there, as I said a moment ago, being Cory Booker and
not really considering how to advance the president`s message. I think,
though, he`s...

MATTHEWS: Yes!

CORN: I think he`s absolutely wrong if he`s saying that Bain Capital
and looking at their record is off-limits because what else is there in
this campaign? Looking at the Massachusetts record of Mitt Romney?

FINEMAN: Well, not only...

CORN: And so in that regard -- in that regard, he was servicing his
own constituency, that is his donors and the people in Manhattan...

(CROSSTALK)

FINEMAN: Not only did he say -- did he say that Bain was off-limits,
he actually also said that Bain overall had done good for the economy...

CORN: Yes.

FINEMAN: ... done a good job for the economy.

CORN: Because he was touting Bain, so...

FINEMAN: He was touting Bain. And more important, I think, than any
of that, is he`s implicitly saying that Barack Obama -- that President
Obama has been caught up in the same old politics of nauseating accusation,
and isn`t this terrible, and Barack Obama isn`t really a change agent.
That -- to me, that, in a way...

MATTHEWS: Right.

FINEMAN: ... was -- was a deeper point he was making.

CORN: Well, he was -- he was -- he was equating the Jeremiah Wright
character assassination ads with...

FINEMAN: With the Bain Capital...

CORN: ... with the Bain Capital ads! And that`s...

(CROSSTALK)

MATTHEWS: That`s cute. What exactly...

(CROSSTALK)

MATTHEWS: Let me ask you, Howard. What would a surrogate -- what
would a surrogate for Mitt Romney have said yesterday?

FINEMAN: Well, I -- I...

MATTHEWS: He sounds like...

FINEMAN: First of all...

MATTHEWS: ... he was a surrogate for Romney!

FINEMAN: All I can say is -- well, first of all, Jim Kaplan -- I
mean, Jim Cramer had the most amused and bemused look on his face while he
was listening to that...

MATTHEWS: Right.

FINEMAN: ... the guy from CNBC...

MATTHEWS: Well, he was looking like I was looking at home, watching
this thing. I have never seen anything like it. This guy is your best
friend...

(CROSSTALK)

MATTHEWS: ... and he goes on and destroys the underpinning of your
whole campaign.

FINEMAN: With surrogates like that...

MATTHEWS: All right, well, let`s go on. Here he is...

FINEMAN: ... you don`t need -- you don`t need enemies.

MATTHEWS: Gentlemen, here he is admitting his failure, basically,
with this YouTube he put on a little bit later, after he was -- this has
been called the "POW statement." Here it is, later on in the day.

(BEGIN VIDEO CLIP)

BOOKER: Let me be clear. Mitt Romney has made his business record a
centerpiece of his campaign. He`s talked about himself as a job creator.
And therefore, it is reasonable -- and in fact I encourage it -- for the
Obama campaign to examine that record. In fact, I believe that Mitt Romney
in many ways is not being completely honest with his role and his record
even while a business person.

(END VIDEO CLIP)

MATTHEWS: Well, David Corn, he was for -- he was for Bain Capital...

CORN: Before he was against it!

MATTHEWS: ... a few minutes before he was against it. What do we
make of this performance?

CORN: Well, he got at least one, if not 20, phone calls from the
campaign afterwards. But if you look at his whole demeanor in that ad, it
looks like he doesn`t want to be there.

And don`t forget, "MEET THE PRESS" had millions of people watching.
Last time I checked, a little earlier this afternoon, 11,000 people had
watched that YouTube clip. So the damage was certainly done. And we`ll
see Cory Booker`s...

MATTHEWS: OK...

CORN: ... statement...

FINEMAN: Chris...

CORN: ... again and again and again in Mitt Romney ads.

(CROSSTALK)

MATTHEWS: Let`s take a look at the Romney ad. You just jumped ahead.
Here`s the Romney ad, already proving they`ve got a hell of a war room.
Here they are, already using Cory Booker, mayor of Newark, as their
surrogate. Already, he`s been enlisted in the army because here`s the ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Have you had enough of President Obama`s attacks
on free enterprise? His own key supporters have. Democrat mayor Cory
Booker of New Jersey.

BOOKER: I have to say, from a very personal level, I`m not about to
sit here and indict private equity.

UNIDENTIFIED MALE: Former congressman Harold Ford, Jr., Democrat from
Tennessee.

HAROLD FORD, JR. (D), FORMER CONGRESSMAN: Private equity is not a bad
thing. Matter of fact, private equity is a good thing in many, many
instances.

(END VIDEO CLIP)

MATTHEWS: Well, there you have Harold Ford jumping in with the back-
up, the double down, Howard. I mean, this is just an astounding set of 24
hours, starting with "MEET THE PRESS." It keeps making news of this kind.

FINEMAN: Well, I -- Chris -- Chris, I`ve spent a lot of time in
Newark with Cory Booker. I`ve seen him in other situations. He`s a very
impressive guy.

People are always telling him that he`s got a huge future ahead of
him, that he needs to be a national change agent in the way Barack Obama
pledged to be, but that some of his own supporters don`t think he is. This
is a guy who`s very ambitious, who wants to set out his own marker on
things.

I don`t think of him as anybody`s surrogate. He`s not going to be
anybody`s surrogate. He`s certainly not going to be Barack Obama`s
anymore. And that`s where he was coming from.

I think -- I think it`s pretty devastating. It`s short term, of
course, but I do think there`s a risk here. I`ve got to say, I think
there`s a risk for the president if the president`s opponents can make him
seem like a foe of free enterprise, like a guy who doesn`t understand the
idea of profit and how business works, and so on. That can have an impact.

That`s dangerous for the president. When somebody like Cory Booker
and Harold Ford come forward to testify on the notion that the president,
in effect, doesn`t understand how business works, that`s dangerous.

(CROSSTALK)

CORN: But at the same time, the president can`t let Mitt Romney
campaign as the Mr. Fix-it who knows the economy...

FINEMAN: Yes.

CORN: ... better than he does...

MATTHEWS: Yes.

CORN: ... on the basis of his Bain Capital experience.

FINEMAN: Well, that`s why this is devastating.

(CROSSTALK)

CORN: He has to be able to go at Mitt Romney because otherwise, Mitt
Romney -- the idea of Mitt Romney is very popular, a guy who knows
business, who can create jobs. People don`t like him that much, but they
like the idea of Mitt Romney.

That`s why these Bain ads are important. That`s why what Cory Booker
did yesterday I think is really damaging, maybe even over the long run, to
the president.

MATTHEWS: Well, let`s ask now both of you -- Howard first and then --
by the way, Steve Kornacki has taken (ph) a terrible shot, a really strong
shot at Cory Booker, saying what Cory was out for the other day on "MEET
THE PRESS" was Cory, that he was...

FINEMAN: That`s what I just said.

MATTHEWS: ... down the line trying to build up his support base
financially...

(CROSSTALK)

FINEMAN: I think we all just said that.

MATTHEWS: He wants -- yes, he was basically servicing his donor base,
not the president.

FINEMAN: Yes.

MATTHEWS: But what about this problem with the president? If all
Obama has to face is the possibility that -- somebody`s running against
him, brand X. His name is Mitt Romney. He just offers himself up as, I
can do a better job because I`ve made a lot of money, I made a quarter
billion bucks, billion bucks. I`m good at business. That means I`m good
at job creating because all businessmen create jobs.

In a sense, the president has to take on that argument because
otherwise, people buy it because it sounds facilely true. Sure, if you
want a guy to create jobs, bring a guy in who`s created jobs. Obama has to
come in and say, He didn`t create jobs. That wasn`t his job description.

(CROSSTALK)

FINEMAN: Yes, but what that means is, the president has to dive
systemically into a careful explanation of how the economy works for good
or ill, how jobs, in fact, are created. What`s the good part of business?
What`s the responsible part of business?

MATTHEWS: Yes.

FINEMAN: What`s the irresponsible part of it? He`s got to get down
in the weeds with this. If this is going to be a debate over how economic
principles are applied, how the economy really works, then he`s got to
really get into it. And the president said today this is not a
distraction. This is the central debate. So -- and I think...

MATTHEWS: That`s what the president said, Howard...

(CROSSTALK)

MATTHEWS: This is what the campaign...

FINEMAN: This is what the campaign is about.

CORN: There is -- there is...

FINEMAN: It`s going to be like an economics course.

MATTHEWS: What an amazing statement!

CORN: There is -- there is a backdrop to all this, and that is what
happened with the economy and private business in 2008. And so if the
president -- if there was ever a campaign when you can come in and make a
distinction, as even Newt Gingrich did, between different types of economic
activity, now is the time to do it.

And Bain Capital, I think, gives the president a lot of running room,
given the record they had for companies that went under...

MATTHEWS: OK...

CORN: ... while Bain still made tens of millions of dollars. Compare
that to what happened with the subprime crisis.

FINEMAN: He`s got to do it...

MATTHEWS: OK, Howard...

(CROSSTALK)

FINEMAN: He`s got to do it in a detailed way, and he can`t look
like...

MATTHEWS: Got to get a break.

FINEMAN: ... he`s taking on all of free enterprise.

MATTHEWS: I agree, Howard. You`re making your point. But let me
tell you, before he does that, he has a preliminary challenge. He has to
review his list of surrogates.

(LAUGHTER)

MATTHEWS: The president has to go through his list of surrogates and
decide which of them he`s going to try to get on "MEET THE PRESS" or
whatever else he wants to get them -- maybe get -- he`s going to allow to
call themselves his surrogates and decide which of them are carrying
explosive devices.

(LAUGHTER)

MATTHEWS: Who is going to go on television and destroy him...

(CROSSTALK)

FINEMAN: All I know is, Chris, they wouldn`t do it that way in
Philly.

MATTHEWS: I have never seen anything like it.

FINEMAN: They wouldn`t do it that way in Philly or in Boston.

MATTHEWS: I have to tell you, this is going to be a -- the fact that,
Howard, you made a very eloquent case about how much harder Obama`s
challenge is now to isolate what problem he has with Bain Capital than he
had just 48 hours ago.

FINEMAN: Exactly.

MATTHEWS: Thank you, Howard. You`ve explained why Cory Booker`s made
it all the more tougher for the president to get reelected. And a couple
more Sundays like this, by the way we`re going, the president won`t make it
past August.

Anyway, thank you, guys, very much. Howard Fineman, my buddy. Thank
you, David Corn. You guys are great. We`ll be back with you later tonight
on our first -- our second edition at 7:00 o`clock tonight, when we go much
more into detail about the horror of Cory Booker. We`ll be right back.

Coming up, by the way, Notre Dame -- not the football team, the
university -- is suing the Obama administration over this requirement that
insurance companies and universities, Catholic universities included, carry
contraception as part of their insurance. We`re back into that fight
again, and it`s hotter than ever.

We`ll be right back with HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS: OK, we`re back.

We have got a big fight brewing tonight.

The University of Notre Dame, joined by the Archdiocese of New York
and Washington, D.C., and the Catholic University of America, are all suing
the Obama administration over this contraception issue, the requirement
that insurance companies and Catholic institutions like universities and
hospitals have to carry insurance which includes contraceptive coverage.

So we have joining us right now Pete Williams, who is the justice
correspondent of NBC News, also Sister Simone Campbell, who has joined us
on these issues before.

Pete, what is the litigation here involved? Will it ever get to a
head during the campaign? What are we looking at here in terms of this
legal fight?

PETE WILLIAMS, NBC NEWS JUSTICE CHIEF CORRESPONDENT: No, I doubt it
will get to a head during the campaign, and you have to remember that there
were lawsuits already filed over this issue -- 43 more today organizations,
12 separate lawsuits.

And what they are arguing about or what they claim is wrong here is a
couple of things. First of all, as a practical matter, they think that the
exemption policy here is wrong. You may recall that the Obama
administration made two concessions here. First of all, it said that the
religious institutions themselves would not have to pay for contraceptive
coverage, that that would be paid for by the insurers.

In the lawsuit today, the organizations say they think they will end
up paying for part of that. Secondly, it made an exemption for churches,
but the groups today that sued said that exemption isn`t broad enough, that
if a Catholic organization, for example, serves non-Catholics, and that
would be true in a university like Notre Dame or Catholic here in
Washington, it doesn`t get the exemption.

So there are two basic problems, two problems they raise in the
lawsuit. One is a practical one. They think the exemption isn`t broad
enough. But, Chris, the second thing they say -- let me quote from Father
John Jenkins, the president of Notre Dame -- it`s the principle.

He says: "If we can concede that the government can decide which
religious organizations deserve to be awarded the freedom to follow their
principles, then we have begun to walk down a path that ultimately leads to
undermining those institutions."

So, that`s their problem here. It`s a practical as well as a
principled one.

MATTHEWS: OK, Pete.

Well, the only question there is who does get to decide what`s a
religious institution? Would the religious institution -- is the father --
is the president of Notre Dame saying that they get to decide?

WILLIAMS: No, the law decides. It`s in -- well, yes, I guess in the
ultimate they want to decide if their principles are strong enough that
they think forced -- being forced to abide by a government program that
violates the principles, they think that should be enough.

Now, I should point out here, Chris, the Supreme Court just recently
ruled on a case involving whether somebody can sue for job discrimination,
and the Supreme Court then tried to draw a line between when it is a
violation of religious freedom to let somebody sue and when it isn`t.

So this isn`t the first time the government has made these
distinctions.

MATTHEWS: OK, thanks very much, Pete.

We`re going to bring on -- stay -- stay with us if you can.

WILLIAMS: You bet.

MATTHEWS: Melinda -- I`m going to bring right now Sister Simone
Campbell here.

Sister, it seems to me that this fight isn`t going to end, because
apart from the church`s opposition, the Catholic Church`s opposition to
birth control, period, which is always going to be out there -- that`s just
the -- that`s the philosophy and belief of the church and it`s doctrine.

This issue of whether an institution is religious or not, that is a
legal question. I mean, how is that going to be revolved? If a school
like I went to college, Holy Cross, where you pray at every class, where
you have the crucifix, where most of the students are Catholic, where I had
to take a course in philosophy and in theology every semester, how could
you call that not a religious institution? It seems to me it is.

SISTER SIMONE CAMPBELL, EXECUTIVE DIRECTOR, NETWORK: I think it is a
religious institution, but I believe that the accommodation that was
created by the administration accounts for this.

I think there are two factors here that make it challenging. One is
that these very same institutions, and I would imagine Holy Cross does
this, too, accepts federal funding for much of the work that they do.

MATTHEWS: Yes, OK.

CAMPBELL: And once they accept federal funding for the work that they
do, then the federal government cannot be involved in establishing a
religion, so they can`t pay for their religious activity.

So, I think that sets up one conundrum. The second piece is that
it`s, how do we as a nation in a diverse society as ours accommodate both
people`s -- or consciences, that of those who run the institution, as well
as those of the employees?

I think the accommodation did a fabulous job, but no one acknowledges
the benefit that the Obama administration created with that accommodation.

MATTHEWS: Well, I liked it, too. I liked the idea that the Obama
administration had walked back to an extent their initial charge that
institutions had to insure themselves for contraception by saying the
government would do that, the institution wouldn`t have to have its hands
on that at all. But what about these schools like Notre Dame that are
self-insured?

CAMPBELL: They are still working on the solution for self-insured.

They have proposed four possible fixes for that, but they have made
the absolute commitment that it will be fixed, so I think the question is,
do you trust the administration or don`t you to follow through on their
word? Additionally, Notre Dame says, well, time was of the essence. It
was really important that we get this fixed.

The fact is, these regulations for religious institutes don`t go into
effect until August of 2013. There is plenty of time to get this right and
to get an insurance contract that works.

MATTHEWS: Yes.

(CROSSTALK)

MATTHEWS: Well, what`s the politics here between it seems to me the
universities and the older Catholics, more conservative Catholics, and this
administration and the younger people that go to these schools and a lot
who work at these schools? What`s the real politics going on here, Sister?

CAMPBELL: I think that this is mostly related to the project that the
bishops have coming out in June, which they`re calling the Fortnight of
Freedom.

They want to raise up this idea that we in the United States are
religiously persecuted. I, quite frankly, find that quite offensive
because we have connections with people all around the world who are
actually persecuted. And so the Catholic bishops saying that they are
suffering under this persecution from this administration, I think, is more
fueled politically, and is their effort to draw attention to what I
understand is going to be quite a P.R. blitz that they`re paying for.

MATTHEWS: Do you think they`re all Republican, the bishops?

(LAUGHTER)

CAMPBELL: Oh, I don`t know if they`re all Republican, but I -- it
sure seems that they`re speaking from the playbook sort of possibly as
surrogates for the Republican Party. I don`t know.

But they certainly are engaged in politics that seem much more aligned
with the right.

MATTHEWS: This challenge -- Pete Williams, I want to go back to you
on this -- this is one heck of a challenge, because we all grew up,
Catholics especially -- I think everybody did -- watching "Man for All
Seasons" and watching "Becket" (ph) and these age-old fights between the
power of the church and the power of the state.

And we all still -- always thought you could divide it the way Jesus
did, by saying render under Caesar the things that are Caesar`s and to God
the things that are God. And then you get to something like education and
it`s a hard one, because when it comes to education, you could be teaching
two or three classes in philosophy and theology, but the rest of the school
is learning physics and engineering.

WILLIAMS: Right.

MATTHEWS: And what point does it become a secular institution, right?

WILLIAMS: That is the hard thing. And it all comes back to the First
Amendment and freedom of religion and state entanglement.

Now, what the Supreme Court did in this job discrimination case
earlier this year -- you may remember this was a woman who taught at a
Lutheran school. She sued for job discrimination. The school went to the
Supreme Court and said, look, we can`t have the courts getting involved in
our religious decisions about who we want to be spreading our message.

And what the Supreme Court said is, if -- and this is how they tried
to draw the line -- if an employee is primarily involved in spreading the
religious mission, in essence, is ministering, then, yes, they can`t sue
for job discrimination.

But if they`re not, if they`re working the cafeteria, they`re a
janitor or something, then they can. Now, that`s clear, so we`re obviously
in the future is -- we`re going to come in drawing this line when you get
near the gray dividing point.

As for the birth control thing, what the rule says is that to be
exempt, a school must have the primary purpose of inculcating religious
values, employ primarily people who share those values and serve primarily
people who share those values, so that gets you closer to the church.
That`s where the rule says you`re exempt. When you get away from that,
like a university, where you have lay teachers, you have students who
aren`t Catholic, then they don`t get the exemption, and that`s where the
line drawing is.

(CROSSTALK)

MATTHEWS: Yes, boy, it`s not so neat. You guys, I think you`re beg -
- Sister, you know how complicated it is.

You have schools like my college. You have schools that are like
Georgetown Law, which is pretty much secular. And then you have Georgetown
undergraduate, which is less secular. It`s more Catholic.

You have got all this complication here. And the Catholic Church is
saying, treat us as religious.

(CROSSTALK)

MATTHEWS: Go ahead. Pete, go ahead.

WILLIAMS: Well, neither would be exempt. Georgetown would clearly
not be -- would not have the exemption here.

It would be covered by the rule.

CAMPBELL: Except -- no, except the accommodation makes it abundantly
clear that an organization that is primarily religious, has a religious
motivation, all they have to do is they have to claim the exception, that
they`re claiming their religious right as their religious right, obligation
not to give contraceptives, then that shifts the responsibility to the
insurer.

MATTHEWS: That`s what I thought.

CAMPBELL: So Georgetown can do that. Georgetown is not left out of
this rule. It`s amply provided for. The question is, do you trust that
it`s going to work or not? And the bishops are saying, no, we don`t trust
it`s going to work. That`s the deal. They`re accommodated.

MATTHEWS: OK. well, thank you, Sister.

CAMPBELL: You are very welcome.

MATTHEWS: You have done a good job here of explaining it. It is
rather clear, because churches are exempt. Catholic institutions, like
universities and hospitals, are not exempt, but they are exempt from having
to put their name to it. The insurance companies are required to pay for
the kind of coverage, not the institution.

I thought that was the deal. It looks like a good deal to me. The
only tricky part is this boring fact that some of these universities are
self-insuring and we have to deal with that. But this is the stuff we`re
entangling here and I wonder about all this effort.

Anyway, thank you so much, Sister.

And thank you, Pete, for explaining the law here.

(CROSSTALK)

MATTHEWS: We will be right back with more HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS: We will back in just a moment to talk about this disaster
on "Meet the Press" yesterday where the president`s surrogate basically
trashed his entire campaign.

We will be back in a minute with that hot one.

(COMMERCIAL BREAK)

SUE HERERA, CNBC CORRESPONDENT: I`m Sue Herera with your CNBC "Market
Wrap."

Stocks have their best trading session of the month. The Dow gained
135 point, the S&P up 21, and the Nasdaq jumped better than 2 percent, or
68 points. Not a great day, however, for Facebook. Shares skidded about
11 percent on their second day of trading.

J.P. Morgan Chase slipped nearly 3 percent after CEO Jamie Dimon said
the company was suspending its share buybacks. And Lowe`s said profits
rose 14 percent. That beat estimates, but it cut its full-year forecast,
sending the shares down a full 10 percent.

And that`s it from CNBC. We are first in business worldwide -- and
now back to HARDBALL and Chris.

MATTHEWS: We`re back with Eugene Robinson and Erin McPike.

It`s great to have some people joining us on this topic on the day
after one of the most amazing "Meet the Press"es I have seen, well, since
Joe Biden was on the last time.

(LAUGHTER)

MATTHEWS: Eugene, thank you.

And then, Erin, I want your thoughts on this. I watched this show.
I watched Cory Booker. I`ve always been impressed with him.

I met him in person. He`s a Stanford guy, amazing character.
Everything about him was amazing except what he did this Sunday.

He basically was given a chance to react to what the president is
doing on his campaign, which is to go after Bain Capital and its killing of
jobs, and to basically go after Governor Romney`s entire claim to fame,
which is that he can create jobs because of what he did at Bain Capital.

He came on and said, "Stop making fun of Bain Capital. Bain Capital
does a lot of good work. I`ve had to fire people. Private equity is a
good thing overall. This is a nauseating campaign."

And then he reminded everybody, I have here my surrogate notes, I`m
an official surrogate for the campaign.

I don`t know how to put it together, Eugene. You`ve seen some of
this before. I`ve never seen anything like this, ever in my life.

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Well, sometimes the train
goes off the tracks. He clearly was not on the message of the campaign he
wanted to be on.

It is not unusual, Chris, and you know this very well, for Democrats
and Republicans from the New York metropolitan area to be, say, friendlier
to the financial services sector than Democrats elsewhere. It`s like Iowa
and farm supports, right, ethanol supports. I mean, you`ll find bipartisan
issue out there.

But, Mayor Booker was not adroit, to say the least, in what he said.
And then later the way he took it back. It was kind of clumsy in both
directions, I thought.

MATTHEWS: And let me go to you, Erin. It seems not only was he not
adroit, I thought he made a very good pro-Romney argument. I think he came
on as a surrogate for Romney.

He basically said Romney has done a good job. He said cutting jobs
was a good thing for efficiency purposes. He said private equity is good
thing. Bain Capital is a good thing and it`s wrong to be doing what Obama
is doing. He gave the case for Bain and for Romney, just short of saying
Romney ought to be president.

ERIN MCPIKE, REAL CLEAR POLITICS: And I talked to some Republican
national committee officials yesterday who said they were popping champagne
corks after "Meet the Press" yesterday, because yes, indeed, Mayor Booker
made their points to him.

And, look, when Mitt Romney campaigns, he talks about his private
sector experience, that he spent 25 years doing that, but he doesn`t talk a
lot about what he did exactly. He`ll mention a couple things like Sports
Authority and the office supply chain Staples and Domino`s, to say that
here are some very successful companies that, with my leadership at Bain,
we helped make successful.

But that`s the extent of it. He only talks about the successes and
not the failures, and here you have Mayor Booker making the point for him
and neutralizing that as an issue, so he doesn`t have to talk about the
failures.

MATTHEWS: But why did he do it? Why did he come on and trash the
entire Obama campaign? I don`t get -- this is fundamental here. This is
something that normally doesn`t happen in American politics, where a
surrogate changes sides on the main argument of the campaign.

MCPIKE: He was being honest. I mean, as a New Jersey --

MATTHEWS: What?

MCPIKE: -- elected official, that`s what he believes. I mean, a lot
of people who work in the financial sector live in his state, and yes, Cory
Booker is looking at statewide runs. We`ve been talking about Cory Booker
as both a statewide potential --

MATTHEWS: I guess I missed the point here. He said he`s a surrogate
for Obama`s campaign, Erin. Was he a surrogate for the campaign on Sunday
or he was basically a saboteur?

MCPIKE: He was freelancing. He was freelancing.

MATTHEWS: Freelancing? I disagree. I think he was attacking the
main heart of the Obama campaign. Attacking.

(CROSSTALK)

MATTHEWS: Wasn`t he, Erin? Isn`t that what he was doing?

ROBINSON: Well, that`s certainly the impact of what he did. Now,
did he sit down before the show and say, I`m going to go out and I`m going
to sabotage the Obama campaign? I kind of doubt that he did that.

Anything is possible, but if you`re kind of looking for the de-
machinations and what was in the back of his mind, is he kind of staking
out in some radical direction, I think that`s what he meant to do. I think
he wouldn`t have come back later in the day with a YouTube video that
sought to take back what he said.

I think he was trying to walk a line, not insulting the people who
were going to fund his statewide campaigns when he gets around to running
one --

MATTHEWS: OK.

ROBINSON: -- while at the same time I don`t know what, because he
didn`t do anything on the other side, he just went out of his way with the
other people.

MATTHEWS: Here`s the president tonight -- Gene, here`s the president
tonight trying to do damage control on what was done yesterday. Here`s the
president in the late this afternoon press conference out of Chicago.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is not a
distraction. This is what this campaign is going to be about, is what is a
strategy for us to move this country forward in a way where everybody can
succeed. And that means I`ve got to think about those workers in that
video just as much as I`m thinking about folks who have been much more
successful.

(END VIDEO CLIP)

MATTHEWS: Well, there you have it, Erin. I guess I`m watching this,
I watched it yesterday, I watched the president today, and what I saw was a
disaster. Your thoughts?

This will be used by the Mitt Romney campaign for not just weeks but
for months. I wouldn`t be surprised to see it in October -- Cory Booker
destroying the president`s main argument. Your thoughts?

MCPIKE: Just a few minutes ago, the Romney campaign put out a
statement from Mitt Romney and it used Cory Booker by name to say that this
is what the campaign was going to be about. Yes, exactly, they will be
using that footage throughout the rest of the campaign.

I talked to the campaign just an hour or so ago, and they`re gleeful
about this. They do intend to use it. Now, I think what they`re not sure
yet is how much this neutralizes Bain as an issue for them and will they
have to go out and make their own case? I think they want to take this
back to the president and talk about the economy some more, but whether or
not they have to offer their own case, that`s still up in the air.

MATTHEWS: Well, Gene, I think it`s very important for me now instead
of paraphrasing, I want to take a look at what Mr. Booker said yesterday.
I want to see all three bites if we can show them in a row now of how he
went after the main three points.

The first point he made was that private equity is a good thing and
creates a lot of jobs. Bain creates a lot of jobs. He later got into some
of the other topics saying, I`ve fired people. It`s good because it
creates efficiencies, it`s good for the city and it`s good for private
enterprise to be firing people.

He also -- I mean, he made a point that he was, in fact, speaking as
a surrogate for the Obama campaign. He went into detail about saying I
have here in my hands the surrogate notes that were provided me by the
campaign for this appearance here, which -- here we go, let`s take a look
at this. I`ve never seen anything quite as well done as what Cory Booker
did to Obama yesterday. Here he is, Mayor Booker.

(BEGIN VIDEO CLIP)

MAYOR CORY BOOKER (D), NEWARK, NJ: I`m not about to sit here and
indict private equity. To me, it`s just this -- we`re getting to a
ridiculous point in America. If you look at the totality of Bain Capital`s
record, they`ve done a lot to support businesses, to grow businesses. And
this to me -- I`m very uncomfortable.

This kind of stuff is nauseating on both sides. It`s nauseating to
the American public. Enough is enough.

(END VIDEO CLIP)

MATTHEWS: It`s nauseating, Erin, to what they`re doing in the Obama
campaign. It`s nauseating against Bain.

He`s not being subtle here, Gene and Erin. I -- I mean, I know it
well because I watch television, I keep waiting for these bicentennial
moments in politics, and once in a while they plot point. This is a plot
point. When everything that the Obama campaign spending lots of time and
effort developing their main summer campaign, that basically brush back,
this guy Romney from claiming to be a job creator, and along comes one of
the most impressive stars of the Democratic Party, billed as a surrogate,
and trashes the whole campaign -- Erin.

ROBINSON: Well, here`s the question, Chris. "Meet the Press" is
"Meet the Press." It has nationwide impact. It gets picked up in the
newspapers in the next day. It gets picked up on television around the
country the next day.

However, Cory Booker as a national figure isn`t quite there yet. And
so, what I wonder --

MATTHEWS: He will be.

ROBINSON: I`m agreeing with you that this certainly undermines the
message that the Obama campaign has been trying to get out all summer, to
what is the national impact of Cory Booker versus the president`s pulpit
which he used today and which he`s going to continue to use until November.

MATTHEWS: Eugene, my friend, my colleague, my esteemed colleague,
when I look to it -- how many times tonight on FOX television do you think
we`ll be hearing from Cory Booker, and how long do you think they`ll
serenade this with his words?

ROBINSON: Not just tonight, from tonight until November. So, you`re
absolutely right we`re going to hear this again and again and again.

Now, does it have -- my question is, does it have the sort of
piercing quality a couple months from now that it has today? It`s fresh,
it`s out there, it`s so counter to the message that, of course, it`s all
anybody is talking about.

Does it sustain that quality or does it become part of the cacophony
that we will hear between now an election day? That`s a question.

MATTHEWS: Yes. Well, Erin, I start my Sunday show every week with a
line: to ask not what your country can do for you -- I get the feeling this
is going to resonate with the right wing of this country just as much of a
fashion. They`re going to love it, because there you have the man who
should be the president`s ally, the man who is billed as a surrogate,
coming on saying, I`ve heard everything Obama has to say, I`ve listened
closely to his message of why he should be reelected, and it`s not true.

MCPIKE: It is just one person though, let`s remember that. The
Obama campaign is not going to suddenly recalibrate and stop talks about
Bain Capital. They have ads about specific companies that failed with
Bain, and they`re not going to end that.

And just tomorrow, we`re going to see a lot of New York Democrats
come out and hold a press conference and talk more about how Romney`s
influence with Bain Capital has hurt certain companies in New York.
They`re not done with this. They`re not backing down from their strategy.

So, we`ll continue to hear about it. But now, we`re going to hear
about both sides of it.

MATTHEWS: OK. I like. Thank you -- we`re going to take a little
break right now. Erin McPike, it`s great to have you on.

I agree with everything you guys say tonight because we all agree.
This has been a bad day for the Obama campaign effort. Not exactly -- I
think as I said early in the program tonight, they ought to take a look
before they get too sophisticated about it, take a close look at their list
of surrogates, you might call up and ask if they agree with the campaign or
not. That would be my first question to everybody, before they put that
surrogate badge on.

Eugene Robinson of "The Washington Post", Erin McPike of "Real Clear
Politics" -- we`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Let me go back with Gene Robinson and Erin McPike of "Real
Clear Politics".

Gene of "The Washington Post" -- just to finish this off, what do you
think is going on in the Obama campaign right now, given the fact that
president had to address that question about Cory Booker, the mayor of
Newark, in his very first answer out of Chicago, with that NATO press
conference?

ROBINSON: I think they`re doing what you suggested in the list,
Chris. I think they got out the list of surrogates and they`re on the
phone going down the whole sort of catechism, you know, the whole sort of
liturgy -- do you believe in this? Do you believe in that?

MATTHEWS: They`re vetting their surrogates.

ROBINSON: Right, exactly. And making sure they intend to stay more
or less on the track rather than veering off in a radically different
direction.

MATTHEWS: Yes.

Erin, I think the good thing about this event was the president was
forced to clarify what was wrong with the guy coming from private equity,
Bain Capital, of being a president, by saying they`re totally different job
descriptions. One is about maximizing profit, and the other one is about
creating more opportunity for more Americans. He did a good job, I
thought.

MCPIKE: He did. And it`s something that Mitt Romney hasn`t yet
clarified for himself. He just talked about being, again, a successful
business, but he is -- you and I have talked about this: what did define
success?

MATTHEWS: Yes.

MCPIKE: Was it wealth or was it job creation?

And just today, his advisor, Eric Fehrnstrom said that he created
more than 100,000 jobs, which is a claim that is yet disputed and not
something we`ve heard Mitt Romney go into great detail about. And so,
right now --

MATTHEWS: That`s claim.

MCPIKE: It`s a claim, and Romney himself now as an opportunity to
explain what he did for 25 years and why it qualifies him to be the steward
of the American economy. Whether or not he does that or whether or not he
turns it back to simply a referendum on President Obama remains to be seen.

Now, the Romney campaign does not want to talk in deep about Bain
Capital. But I think a lot of Republicans in Washington right now think
that this is his moment to do so and to put an end to this.

MATTHEWS: OK. Erin McPike, it`s great to have you on, from "Real
Clear Politics".

And, Eugene Robinson of "The Washington Post" -- thank you, buddy,
for being on tonight. It`s an interesting night.

Let me finish tonight where I began tonight.

Whatever you say about Joe Biden getting ahead on his skis, as the
president put it, I`m talking about his speaking from the heart about
marriage equality -- at least, he was saying what the president believed.

This latest "Meet the Press" meshugge (ph) is a different league
altogether. Again, I ask, who booked Booker? Who put a guy the mayor of
Newark out there on national television to speak for the Obama campaign?
Who put a guy out there who totally disagrees with the Obama campaign, to
speak for the Obama campaign? Who -- if you don`t mind me saying so -- is
nutty enough to ask an eloquent defender of Bain Capital to be out there on
a campaign focused entirely on attacking Bain Capital?

I`m appalled by this, of course. Hear me? You don`t screw up like
this in the big leagues. But I don`t want to put -- let Booker himself
off. He knew exactly what he was doing out there on "Meet the Press". By
defending Bain, he was going at war with the Obama campaign.

He was saying what they were saying was wrong, dead wrong, and they
should stop saying it. He was saying the main message this whole summer
should be buried, placed in a deep hole with dirt thrown on it. Explain to
me how a grown man, a political man like Cory Booker could think that he
was doing anything else.

Obama`s got a good chance of getting reelected right now. A couple
more Sundays like yesterday, and he won`t. You don`t win elections when
the main thing your campaign is being dumped on by someone people think is
on your side.

Wait a minute, Cory Booker is on Obama`s side, he`s an official
surrogate -- someone chosen by the Obama people to get out there and speak
for the president`s reelection.

Then, why is he attacking Obama`s reelection campaign? Why is he
called a surrogate when he just walked away with, for the most effective
bit of campaign sabotage of the season so far? If he didn`t mean to do it,
then he isn`t paying attention. If he isn`t paying attention, he just did
Romney the biggest favor of the campaign. If he isn`t paying attention,
I`m afraid it`s time for someone for someone on the reelection campaign to
do just that -- before certifying another surrogate, check out where they
stand on the main issue of the summer campaign.

Bain remains no matter what Romney says the name of Romney`s pain.

And that`s HARDBALL for now. Thanks for being with us. Join us
again in one hour, at 7:00 Eastern for a live edition of HARDBALL and Cory
Booker thrashing the message of the Obama campaign, the side he`s supposed
to be supporting.

"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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