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updated 8/30/2012 11:38:13 AM ET 2012-08-30T15:38:13

HARDBALL
August 29, 2012

Guests: John Kasich, Reynolds Wolf, Christine O`Donnell, Jenny Beth Martin, Christine O`Donnell, Jonathan Martin, John Nichols

CHRIS MATTHEWS, MSNBC HOST: Bodyguard of lies. Let`s play HARDBALL.

(MUSIC)

MATTHEWS: Good evening. I`m Chris Matthews, down in Tampa, at our
channel side location, just outside of the Tampa Bay Times Forum -- the
site of this year`s Republican National Convention.

Let me start with the assault here in Tampa against the president.
It`s not enough that people resent the economy, I guess. They need to
resent Barack Obama personally.

This must explain the slippery negative case that the Romney people
are making towards him not just Obama himself on his record but the man,
and he is siphoning -- quote, "he is siphoning off Medicare benefits to pay
for his health care program." He is letting welfare recipients out of
their work requirement. He`s disparaging the work ethic and
entrepreneurial guts of business people.

Well, what kind of a person would want to do all that to let for
people sit home and collect checks? What kind of person would disrespect
the American spirit of the person who starts a business? What kind of
politician would skim health benefits from hard-working seniors to fund the
working poor?

Well, the Romney team wants to think that Barack Obama is that kind
of guy. And that`s the strategy in place here. And it may be penetrating
right where this election is being fought right now, among the white
working class.

Joining me right now is Eugene Robinson, the Pulitzer Prize winner
for "The Washington Post", and John Heilemann, the much heralded author of
"Game Change." Both, of course, gentlemen, are essential thinkers for
MSNBC.

Gene, let`s talk about fairness. No accusations of racism. You
never know what`s in another man`s heart.

EUGENE ROBINSON, WASHINGTON POST: Yes.

MATTHEWS: But strictly in terms of the accusations made against the
president, it`s not enough it seems the Republican side to say we`ve got a
weak economy. We`ve got to say we`ve got a weak willed, bad-willed
president here. He wants to get welfare benefits to people that don`t want
to work. He wants to skim Medicare from hard-working people that spent
their whole lives paying into it by shifting off the money, siphoning it
off to the poor people, working poor.

What is else? He doesn`t trust and respect business people,
hardworking people.

Who is he talking to?

ROBINSON: Who is this appeal talking to?

MATTHEWS: The negative --

ROBINSON: It`s speaking to white working class voters and their
resentments, and they`re saying that Barack Obama doesn`t like you. He`s
not your kind of person. He doesn`t like people like you. He doesn`t
respect you, he doesn`t know what you --

MATTHEWS: So, not only he wants to hurt you, he wants to insult you.

ROBINSON: Yes. And it`s all part of the Barack Obama as other sort
of blanket campaign that has been waged by the Republican Party for some
time now with -- may be gaining traction now. Although I wonder why now as
opposed to closer to the election.

MATTHEWS: Yes, well let me ask you about that, John. What about
now? Is this constant barrage of assault, saying the guy is basically
playing an old game of demagoguery politics, where you take the money from
the workers and basically give to it the poor people to buy votes? That`s
basically what they are charging him with. Old big style, big city machine
of 50 years ago.

JOHN HEILEMANN, MSNBC POLITICAL ANALYST: Sure. Look.

MATTHEWS: They can keep saying Chicago, by the way. Have you
noticed? They keep saying Chicago. That sends that message, this guy is
helping the poor people in the bad neighborhoods, screwing us in the burbs.

HEILEMANN: There`s a lot of black people in Chicago.

MATTHEWS: Yes, I think that makes you something different (ph).
They`re ethnic people, yes.

HEILEMANN: Look, it is a -- it is a -- there are two big facts. One
fact is we lived in an age of austerity. There are scarce resources that
are being distributed. In historically speaking, when you are in an era of
austerity, there is a competition for those resources.

And it opens up the ability to pit ethnic groups against each other
and pit classes against each other. So -- that`s happened historically all
through time and happening now is not surprising. Why is it happen thing
week? The convention but more importantly, it is the same reason why Paul
Ryan is on the ticket.

For a year and half, Mitt Romney ran because he -- in a way that made
it clear they thought they could win a pure referendum on Barack Obama`s
economic management. By mid-summer, it was clear they could not win that
race and they had to do various things to change. So they embrace guy like
Paul Ryan, that shifts the conversation away from the economy ask to the
role of government and in society more broadly.

MATTHEWS: The economy is going to get stronger, are they afraid it
might get stronger in the next three months?

HEILEMANN: I think it`s going to be -- it`s going to be weak but
that there is not going to be a precipitous fall off cliff and already
baked the cake for people.

(CROSSTALK)

MATTHEWS: Do you buy that?

ROBINSON: Exactly. Economy is now basically what it is going to be
on Election Day. That`s not bad enough for the Republicans to be able to
run on the poor --

MATTHEWS: OK. Let`s take through what I think is a incisive -- I
think that some of this is working. I call them slippery arguments because
you can always make something out of nothing or about something very small.

First, the argument Obama team is anti-small business. And that`s
based on his "you didn`t build that" line. Republicans have deliberately
represented that and repeated it over and over again, and again last
night`s convention, it was, in fact, the heart of the night, theme of the
might. Second, they claim President Obama wants to waive work
requirements. There is no truth at all on that one. Nobody backs it up.

And today with Chris Jansing, my colleague, Kansas Republican
Governor Sam Brownback, a very conservative Republican, agreed. Here he
is.

(BEGIN VIDEO CLIP)

CHRIS JANSING, MSNBC ANCHOR: Do you agree the claims that the work
requirement has abolished are false?

GOV. SAM BROWNBACK (R), KANSAS: I -- as far as I have seen, but I
don`t know all of the basis to it.

(END VIDEO CLIP)

MATTHEWS: OK, as far as I have seen it. I haven`t seen all the
basis to it. He is the governor of a state. He would know that.

Third slippery argument that robbed Medicare of $700 billion plus to
pay for Obamacare. Well, the president doesn`t cut money from Medicare`s
budget. He cuts the rise in future costs and more to the point that cuts
are not even beneficiaries, older people, retired people, mostly payments
through insurance companies, and hospitals.

When I first got into politics working on Capitol Hill back in `71,
my good old senator, Frank Moss, the last liberal from Utah, said to me,
during the Eagleton matter, which is a big thing. I said, give this guy a
break.

He said, you know what, Chris? Here is how politics works. You take
the littlest bitty thing in the world and make it into the biggest thing in
the world. It seems like with the Republicans have done -- let`s take
about comment the president saying you didn`t build the highways, you need
to build your business. You weren`t your own school teacher, somebody else
was your school teacher. If you mastered business, somebody helped you
learn it.

Maybe the president forgot to throw in but I admire the
entrepreneurial spirit of the person who actually starts the business
because he didn`t put that in, then jumped and said he doesn`t respect
that.

ROBINSON: Yes, of course. They blow it up into this big thing. But
what I thought fascinating is why didn`t they do that last night during the
10:00 hour? The hour when the broadcast networks were focused on the
convention.

Chris Christie didn`t really pick up and run with it. He was too
busy running with the Chris Christie for 2016 --

MATTHEWS: You know what? That`s so true. You know, i thought it
was relatively positive night except important the barroom comment by
Boehner which was in such bad taste. I will throw the president of the
United States out of the bar like he`s a bum. I mean, that is so -- he is
not a bad guy. That was bad taste.

I guess the question is why didn`t they stick the knife in last might
when everybody was watching?

HEILEMANN: Well, they did -- look, the -- the line that --
misappropriated line of "you didn`t build that" was the theme of the night.
You heard it throughout the entire night. One of the few pieces of
thematic coherence over the course of the night --

MATTHEWS: Didn`t show the president, let`s take a look. As he said,
as I said, actually the Republicans build an entire night`s theme about a
single line President Obama inartfully delivered. I think it`s fair to
say. The Republicans took out of context.

But let`s listen to what he said.

(BEGIN VIDEO CLIP)

REINCE PRIEBUS, RNC CHAIRMAN: The president said, if you`ve got a
business, you didn`t build that.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: You can`t fix the
economy because he doesn`t know how it was built.

GOV. BOB MCDONNELL (R), VIRGINIA: We need a president who will say
to small businesswoman, congratulations, you did build that in America.

GOV. NIKKI HALEY (R). SOUTH CAROLINA: We build planes. We build
cars.

PRIEBUS: You build it, right?

BOEHNER: No government there to hold your head.

A. ROMNEY: Mitt Romney was not handed success. He built it.

BOEHNER: The guy walked into bar and heard that story and he said
well, if you have a business, you didn`t build that. Well, you know what
we would do with him, don`t you? We`d throw him out.

(END VIDEOI CLIP)

MATTHEWS: You throw a guy out because you disagree with his
politics? What bar do you go to?

And here`s what President Obama actually said. Here it is. Let`s
listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If you were successful
somebody along the line gave you some help. There was a great teacher
somewhere in your life. Somebody helped to create this unbelievable
American system that we have that allowed you to thrive. Somebody invested
in roads and bridges. If you`ve got a business, that -- you didn`t build
that. Somebody else made that happen.

The Internet didn`t get invented on its own. Government research
created the Internet so then all the companies could make money off of the
Internet.

The point is, is that when we succeed, we succeed because individual
initiative but also because we do things together.

(END VIDEO CLIP)

MATTHEWS: We succeed because of our individual initiative and also
because we do things together. He didn`t miss the beat. He just didn`t
blow it up loud enough, I suppose.

ROBINSON: Exactly. He did say it. It is right there.

MATTHEWS: And, by the way, Gene, I`m sure as a journalist you have a
teacher had you in South Carolina that got you into writing.

ROBINSON: Absolutely.

MATTHEWS: And you had one, too. I had one.

HEILEMANN: We all have many. And the teachers that got you into
thinking you are worth being taught.

ROBINSON: Exactly. We have all had that. Interesting thematic,
disagreement really, between community and individualism. Clearly, both --
you need both important the American system. You need an individual
initiative, but you also need community and that they could together as a
society.

MATTHEWS: You know who believes that? Members of the LDS Church
more than anybody. They are humanitarian in their thinking, lead society.
All helped on other people climb the mountain with them.

ROBINSON: Absolutely. They get it.

MATTHEWS: You`ve given me the look.

HEILEMANN: No, it`s just absurd dichotomy. This notion there is a
false -- last night Chris Christie made this and mentioned the G.J. bill.
Funny --

MATTHEWS: There`s G.I. Explain the G.I. bill.

HEILEMANN: Well, it was the thing that went servicemen came back
from World War II, the government helped them go to college. They give
them a full ride to college. There is a generation of people --

MATTHEWS: Got people in your family. My dad.

HEILEMANN: People went to college. Yes. Millions and millions of
them.

The point is you can`t have individual initiative without a setting
in which (INAUDIBLE) can thrive. They`re not opposed. It`s not
individualism versus communitarianism, it`s for to it have any effect it
has to have the other.

MATTHEWS: Try to have a free market without contract law.

ROBINSON: As Mitt Romney, by the way, has said, you know, of course
we have to have free market but markets have to be regulated, markets have
to be overseen. Mitt Romney has said that, multiple times.

MATTHEWS: And signatures have to mean something. Let me ask you
about this, will it work? Now, this is a political show. It isn`t about
good and bad. It`s about will it work?

It`s constantly pummeling this guy as somehow being against the
interest of hard working business people against, let`s face it, older,
white recipients of Medicare. And people, who think welfare can be cheated
on, resent it. Is that working with the audience we are working on, non-
college white folk? Because the blacks are just going to be with Obama,
let`s be honest.

HEILEMANN: Well, look, the -- Mitt Romney has number he has to get
to. He`s basically got to win about 60 percent of the white vote. And if
he gets to 6 1 percent there is a good chance he wins the election, pretty
good chance. If President Obama winds up at 39.5 percent, or 40 percent,
41 percent -- got 43 percent of the white vote last time.

MATTHEWS: Seventy percent of the white -- he does get 70 percent in
the Deep South, doesn`t he?

HEILEMANN: Seventy percent of what?

MATTHEWS: The white vote.

HEILEMANN: Who are we talking about? Romney?

MATTHEWS: Republicans.

HEILEMANN: Yes, I`m talking about the national -- it is an issue
that worked in the past to Republicans and it may yet work in this
election. There are signs it looks like it is working. What the president
and his people do to respond to those ads, the Medicare ad, the welfare ad,
what they do with that argument over if next two months could make the
difference in the election.

ROBINSON: And timing is important. I do think that this Republican
campaign has gotten some traction. I think you`re seeing some movement in
the polls. But the fact that it is happening now and the fact that it is
being -- you know, newspapers now are running head lines saying, you know,
Santorum repeats inaccurate attack on Obama. I mean, it --

MATTHEWS: I`m willing to ask myself, you drive by this route 40s and
route 1s. You look at the bars (ph) and say chopped steaks, cocktails.
There`s a light in the window, trucks are out front. In there, around
11:00 on a Friday night, I always want know what people are talking about.
Are they repeating these Republican lines?

ROBINSON: Exactly. If this were closer to election I would see it.
There is a lot of time still left to correct the record.

MATTHEWS: OK. Anyway -- you know, I think President Obama is one of
the most middle class people we have a president, one of the most regular.
He has done -- I said it today. Without being a big lib about it, He`s
done everything anybody has ever asked African-Americans to do in this
country, perfect family, perfect record, clean as a whistle. All he has
done is work for people that need help. He has never grabbed the money.
He as -- you are laughing.

(CROSSTALK)

ROBINSON: I`m the one that wrote he -- he had to be the least agreed
black man in America. And that`s what he`s been.

HEILEMANN: You can even say that he built that.

(LAUGHTER)

MATTHEWS: Well said, John Heilemann. Well-argued, Gene Robinson,
the pros, they are always the best.

Coming up from the Republican National Convention here in Tampa,
whose party is this, anyway? Chris Christie and most of last night`s
speakers barely mentioned the name Mitt Romney. Is he really their leader
or just the guy they have to run or really looking for it themselves to
2016? Could they be thinking of themselves?

Also, can Mitt Romney win over the Tea Party this week? It was never
exactly a match made in heaven between him. Christine O`Donnell, the
former Tea Party Senate candidates from Delaware, is here to give us her
take. It`s going to be spooky.

Plus, Paul Ryan is set for a big night when he speaks here in Tampa.
But don`t expect him to talk about his record in Congress because he was
somewhat of a party politician who voted for all the spending and tax cuts.
He wasn`t a fiscal hawk.

And all night tonight, we`re going to have continuing life coverage
of the Republican convention including Ryan`s big speech tonight.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. JOHN KASICH (R), OHIO: Ladies and gentlemen, we`ve got to lead
here and march and get to everybody to make sure that Mitt Romney and Paul
Ryan are president and vice president of the United States.

(END VIDEO CLIP)

MATTHEWS: Welcome back to HARDBALL.

That was Ohio Governor John Kasich last might here in Tampa,
concluding a real barnburner of his speech, I thought. And one thing is
clear: this governor is proud of his record in his home state and isn`t
afraid to talk about it. Perhaps he can lend a little advice to Mitt
Romney. We`ll see.

Here with me now, window into the minds of Rustbelt voters, is my old
friend and now Ohio governor, I`m so proud of you, John Kasich, to have
known you all these years and seen you rise to this position. I said
despite some discordance among of my colleagues, I thought you gave a
barnburner last night. I thought it was meat and potatoes, as we say in
Massachusetts, potatoes.

It was real bass your record.

Why can you nominate a guy for president as you are going to do this
week who can`t do the same thing about his record as governor?

KASICH: Well, Chris, first of all, let me just take people back for
a second and let them know that I first met you in 1983 when you worked for
Tip O`Neill and we had a great relationship and did build into a
friendship. I`m always glad to come on the show with you.

In terms of Romney, look, I -- Chris, let me tell you, he is a guy
who is always pretty level. He looks at the glass as half full. But
beneath that when I`m with him and he tells me things and what he is
passionate about, I hear it. He has this deep passion.

But at the surface, when you look at him, he is a pretty pleasant guy
all the time. I think that`s not something to be misunderstood. But I
understand why people say they don`t know him.

MATTHEWS: Well, that`s what they say about Charlie Manuel, manager
of the Phillies. He`s very even tempered. John Glenn from your state is
very much like that.

My question goes back to this. He was governor of Massachusetts and
he was pro-choice and he had a big health care plan. By moderate or
liberal standards, he was a hell of a good governor.

And yet, when he gets here, or he gets to Republican places, the
campaign for president, silencia -- nothing about his record.

KASICH: Well, you know, Chris, when I look at his record in
Massachusetts, with two Democratic houses, I think, you know, they went
from billions in the hole to billions in the black, you know, $2 billion,
$3 billion surplus, and he went from the loss of thousands of jobs to the
gain of about 40,000 jobs.

You know, I have been saying all along, and I will do it with you, you
know, the only thing that matters in the election is the wallet. If this
wallet is fatter, and you remember old Jim Rhodes, four-time governor of
Ohio -- if the wallet is fat, you win. If the wallet is skinny, you lose.
And that`s what we have to be talking about here. That`s what matters to
people.

MATTHEWS: OK. Let`s talk about the welfare charge in all the Romney
ads right now. Is it true that the president has dropped the work
requirement?

KASICH: Chris, I haven`t studied it in detail, but my understanding
is that they have. They have eroded it away.

This was a fight that we had back in the days of the old welfare
reform that we didn`t want to weaken the work requirement. And frankly the
welfare reform bill I think you have to agree worked pretty darned well,
because a lot of people said that it ended generational dependency in many,
many cases.

So, the idea that you want to change that law now without talking to
the Republicans that put it together I just think is a mistake.

MATTHEWS: Well, here`s talking to one Republican.

My colleague Chris Jansing spoke this morning with Kansas Governor Sam
Brownback, a conservative Republican. And she asked him a very direct
question like I just asked you. Has the work requirement for welfare been
abolished? Let`s hear what he said to her this morning.

(BEGIN VIDEO CLIP)

CHRIS JANSING, MSNBC ANCHOR: But do you agree that these claims that
the work requirement has been abolished are false?

GOV. SAM BROWNBACK (R), KANSAS: As far as I have seen, but I don`t
know all of the bases to it.

(END VIDEO CLIP)

MATTHEWS: Can you give that same answer from what you have seen?
They haven`t removed welfare requirement -- the work requirement yet? They
haven`t done it yet? You say eroded. I don`t know what that means. Is it
gone or is it still in place? Can you get welfare without working?

(CROSSTALK)

KASICH: I don`t know the answer to that, Chris. In fact, I was asked
to sign a letter as I was going out the door to head down to this
convention and before I had a chance to study the whole issue, I said,
look, I`m going the pass on this letter until I understand the whole issue.

You know, look, what I will tell you is this, that the campaign is
really, in my opinion, about getting people to work, giving people a
chance.

MATTHEWS: I agree.

KASICH: And that`s what it should be about. In terms of that, I have
just got to tell you I haven`t studied the details of it and I`m not going
to make a statement until I do.

MATTHEWS: Let`s take a look at your state. I have always been
fascinating.

I`m not from Ohio, but I have always loved its politics, going back to
Frank Lausche, the last Northern conservative in the Democratic Party. I
have always found your politics fascinating. You -- it is said that you
have to be for the Republican candidate in Ohio for the Republican
candidate for president to win. Is that your understanding historically?
Your state must go for Romney for Romney to be President Romney?

KASICH: I guess people have put together some other kind of
mathematics, Chris, that shows him getting there. But clearly, without
Ohio, it makes it a lot more difficult.

MATTHEWS: Let me ask you about do you believe the number is 50-44 in
the Quinnipiac? Do you believe that`s accurate? The "New York
Times"/Quinnipiac number has just come out, six-point spread for Obama.
Right now in late August, do you think that`s accurate?

KASICH: Well, "The Columbus Dispatch" just did a poll and their polls
have been pretty good, which shows the race basically dead-even.

Chris, let me give you a couple analysis. Chillicothe, Ohio, 5,000
people, great enthusiasm for Romney. Powell, Ohio, the suburb of Columbus,
5,000 people, great excitement. He`s getting bigger crowds than Obama is
right now. And, you know, I get a sense that there`s real momentum.

But I think at the end of the day, it is going to be tight as a tick
and it`s going to get down to whoever can convince the people that they
have the answer to really spur on the economy. Obama will say four more
years and Romney will say I have the experience and the record to say give
me a shot. Whoever wins that debate will be president.

MATTHEWS: Yes. Can you give me -- I`m going to give you some bad
news right now. Jack Kennedy got the biggest crowds of the campaign in
Ohio and lost Ohio. He could never figure it out. You know the history
like I do. So crowds are no indicator.

(CROSSTALK)

KASICH: No, no, but Jack Kennedy said he got the loudest cheers in
Columbus and the fewest votes. I understand that.

(LAUGHTER)

KASICH: But, look, hey, Chris, Ohio has come out of, you know, a real
-- almost near-death experience.

And we are now starting to get our momentum back because we have
diversified our economy. Our biggest growth in the last couple of months
has been like health care and business services. Interesting. Not just
manufacturing.

Now, the real key is who can convince people in our great state that
they are going to help us to do even better. That`s really going to be the
question.

MATTHEWS: OK. One last quickie, yes or no. Was Romney right when he
said that the auto industry should go to the bankruptcy route rather than
the way the president went?

KASICH: Well, my view on that, Chris, is I`m glad it survived.

The auto industry survived. And I`m thrilled we have got a more solid
base in auto, and, you know, I`m going to have to leave it right there.

MATTHEWS: That`s why you are a great politician, sir. You are
becoming better all the time.

(LAUGHTER)

KASICH: Oh, I don`t know. I don`t know about that. Thank you,
Chris.

(CROSSTALK)

MATTHEWS: John Kasich, a great man.

KASICH: We will see you.

MATTHEWS: I loved your speech last night.

KASICH: Thanks, Chris.

MATTHEWS: I liked everything until you got the Romney right at the
end. I thought you were great.

Anyway, we will bring you an update.

(CROSSTALK)

(LAUGHTER)

KASICH: Hey, Chris, one thing. Listen to this one, no teleprompter
and no script. They let me do what I wanted to do. That`s amazing at a
national convention.

MATTHEWS: It really was. Well, you did a great job.

KASICH: Thank you.

MATTHEWS: Thank you, John Kasich, governor of Ohio, for coming on.

We will give you an update in just a minute on the tropical storm
hitting New Orleans right now.

This is HARDBALL, the place for politics.

(CHEERING AND APPLAUSE)

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE)

MATTHEWS: Welcome back to HARDBALL.

We`re closely watching of course that tropical storm right now
pounding the Gulf Coast. Well, today, on the seventh anniversary of
Hurricane Katrina, Isaac was downgraded to a tropical storm just this
afternoon.

But its destruction is evident. And it is not over.

For more -- for me, we go right now to the Weather Channel`s Reynolds
Wolf. He is in New Orleans himself.

Reynolds, give us an update on the danger we are still facing.

REYNOLDS WOLF, THE WEATHER CHANNEL: Absolutely.

You know, Chris, biggest danger we are facing from this at the time is
really the issue not of the wind, which has begun to subside a little bit,
but rather the heavy rain that we anticipate in and around the New Orleans
area.

In fact, some computer models, Chris, are showing the possibility of
anywhere from 20 to 30 inches of rainfall. It is not necessarily due to
the intensity, but rather the slow movement of the system as it chugs its
way to the north to northwest. So that water is really going to begin to
pile up in a lot of places that have poor drainage, low-lying spots.

It will definitely will stack up. Already there have been reports of
some flooding along I-10, and many of the back roads, a lot of side
streets, you have had some flooding and some of the roadways, especially
the causeway that goes across Lake Pontchartrain. That was open earlier
for just law enforcement. Now it is closed for everyone until the storm
passes.

There was reports of flooding -- there was flooding, rather,
overtopped levees south of this area in Plaquemines Parish. There were
evacuations. There were rescues. So far though in and around the city of
New Orleans, the levees have been holding. They have been doing fine. No
major flooding here for the time being, but of course that can change,
Chris, as this thing marches its way towards the north-northwest.

Let`s send it back to you.

MATTHEWS: OK. So it`s the heavy water fall -- rainfall more than the
wind right now. Thank you, Reynolds Wolf.

Up next, don`t miss my interview with former Senate candidate
Christine O`Donnell.

(CHEERING AND APPLAUSE)

MATTHEWS: She`s a star down here.

You`re watching HARDBALL, the place for politics.

(CHEERING AND APPLAUSE)

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE)

MATTHEWS: Welcome back to HARDBALL and to Tampa.

The convention is a prime opportunity to rally supporters around Mitt
Romney. But the Tea Party leaders here are not ready to let the Republican
establishment forget who rallied them to sweep all those candidates into
office in 2010. That was a Tea Party win the year.

And as the convention gets under way right now, is it becoming less
about Romney or perhaps not so much about Romney and more about the
strength of the next-generation GOP leaders we saw on the bench last night?

With me now is Jenny Beth Martin, a co-founder of Tea Party Patriots,
and Christine O`Donnell, the former Republican Senate candidate from
Delaware, who is heading up a festival called appropriately the
Troublemaker Fest.

(CHEERING AND APPLAUSE)

MATTHEWS: Thank you very much. It is nice to meet you, finally.

Let me -- if these people would quiet down, we could have a
conversation here.

(LAUGHTER)

MATTHEWS: Let me ask you about the establishment Republican. I don`t
want to ask to tie you down on this issue of Todd Akin and his
controversial remarks.

But there seems to be a fight in this party -- maybe it is a healthy
one -- between the establishment, the big shots who always want to win
elections at all costs, the money people in some cases,and the grassroots
Tea Party people who may not have any money except a vote. Who is the
boss?

(CROSSTALK)

CHRISTINE O`DONNELL (R), FORMER DELAWARE SENATORIAL CANDIDATE: Oh,
sorry.

MATTHEWS: Well, Christine first, and then the same question.

O`DONNELL: Well, I think what we have seen here happening at the
convention is a perfect marriage of both of them. And I think the Romney
campaign has done a beautiful job of embracing this Tea Party --

(CROSSTALK)

MATTHEWS: OK. Where is Sarah Palin? Where is Michele Bachmann?

O`DONNELL: Sarah Palin and Michele Bachmann spoke in 2008.

And, instead, we have the new generation of constitutional champions
that they have passed the baton on to. We have Nikki Haley. We have Scott
Walker. We have Marco Rubio. We have Ted Cruz. I mean, they are giving
these people prime-time slots. When you think about in 2008 --

MATTHEWS: So Sarah Palin is passe?

O`DONNELL: No, not that at all. It is time for a new round of
leaders. These are the people who are serving in office right now.

MATTHEWS: Have you become a flack for the establishment? You sound
like such a Romney --

O`DONNELL: No, not at all.

MATTHEWS: What, do you want to be ambassador to the Vatican?

O`DONNELL: No.

(LAUGHTER)

MATTHEWS: What do you want out of this thing?

O`DONNELL: Not at all. I generally like Mitt Romney. I think he is
a good guy and I think he`s the right man for the job.

And what I want to remind people of is, in 2008, Nikki Haley was
either just running for the state legislature or -- state legislature --

MATTHEWS: No, I`m impressed with what she did last night.

But I also think there`s been shutouts here.

Let me ask you your thoughts about this, Jenny Beth. You are a
Southern woman, right? That`s why I said Jenny Beth, both names, right?

JENNY BETH MARTIN, CO-FOUNDER, TEA PARTY PATRIOTS: Yes.

MATTHEWS: OK. I`m serious.

So, Jenny Beth, what ever happened to Palin? She was on the ticket
just four years ago, a hero to the convention. Right? And now gone.

MARTIN: Yes.

It is what they have done. But the thing is our people in the Tea
Party movement, and Tea Party Patriots, we don`t need any one person --

MATTHEWS: You don`t need Sarah?

MARTIN: We don`t need any person out there to energize us. We are
energized on our own.

(CROSSTALK)

(CHEERING AND APPLAUSE)

(CROSSTALK)

UNIDENTIFIED MALE: Tea Party!

MATTHEWS: OK. Let me ask this crowd since it wants to be
participating here, how you would like to hear -- would you like to see
Sarah Palin walk out on that stage tonight?

UNIDENTIFIED FEMALE: No!

CROWD: No!

(LAUGHTER)

MATTHEWS: No? What`s that about? What`s that about?

O`DONNELL: Well, I think that they are ready for -- to pass the
baton.

Sarah is still speaking. Governor Palin still has a role.

MATTHEWS: When?

O`DONNELL: You see her on the TV all the time.

MATTHEWS: Oh, yes, I know. She is on FOX. She gets paid to do it.
Yes.

O`DONNELL: Yes. She is still out there. She is still championing
the right cause. But it is not a single person. And I think it gives the
movement greater strength.

MATTHEWS: OK.

Jenny Beth, do you think it would be good if Palin could come out and
speak tonight and tomorrow night?

MARTIN: Well, it is not going to happen. So I think what one way on
the other doesn`t matter.

MATTHEWS: OK.

(CROSSTALK)

MATTHEWS: Let me ask you about Ryan tonight. That`s a big story
tonight. I you can all agree on that.

Ryan grabbed me. When he was first picked, I thought Romney was at
his absolute best that day. I thought Ryan was fabulous. He was gung-ho
and he was over-the-top exciting. He was young. And he had a true belief
in what he was saying.

Romney for that momentary hour or so seemed to share the true belief.
It is like he invaded the soul of Romney. Well, you know that kind of
stuff.

Anyway --

(LAUGHTER)

O`DONNELL: Like I said, so 2010. So 2010.

MATTHEWS: And they seemed to both be great. They were fabulous
together. So, how does he make -- how does Ryan make Romney as inspiring a
leader as Ryan is?

O`DONNELL: I think Romney is.

And when you get a glimpse of who Governor Romney truly is, people
will get excited about it. We saw Ann Romney last night. And watching
that speech from the forum, I think I saw a marked difference in the energy
in that room when she walked out, the emotion and the excitement when she
was speaking.

And as --

MATTHEWS: You know when the excitement ended? When he walked out.

O`DONNELL: No, no, no. As a matter of fact -- no. Listen. Let me
tell you something.

I loved that moment. Chris, let me tell you. I loved that moment.
And if you watch -- if you watch the replay, he embraced her, kissed her.
He said, oh, you were so fabulous.

They probably had a great time when they got home. I mean, they had
such love between each other. It was beautiful.

(CROSSTALK)

MATTHEWS: Thanks for the portrait you just gave us.

(LAUGHTER)

MATTHEWS: I think she`s very attractive. I think that he is lucky to
have her as a wife. Look at this. These people are all the Ann freaks
here.

(LAUGHTER)

MATTHEWS: Let me ask you about the Tea Party and its future.

Is the Tea Party going to be some day the dominate force within the
Republican Party?

MARTIN: I think we are the dominant force right now in the political
atmosphere, period.

(CHEERING AND APPLAUSE)

MARTIN: Everyone is talking about our values.

Eighty percent of the American people agree with us. It is time to
return to a fiscally responsible, constitutionally limited government.
They agree with us. We`re -- we dominate the political spectrum right now.
And where we go, the politics follow us.

O`DONNELL: She`s right. The course of the country is head order now
is mutually assured economic destruction. And common sense Americans,
independent voters are recognizing --

MATTHEWS: How do you have -- how do you avoid a collision between right
and left or center right and center left or whatever, left and right, if
the Tea Party people say our way or the highway?

O`DONNELL: Because what`s happening --

MARTIN: Here is what you do. You stick to your principles.

MATTHEWS: How do you --

MARTIN: We don`t endorse parties.

MATTHEWS: If you don`t compromise, how do you reduce the size of the
budget?

MARTIN: Compromises what has gotten us here. Where we are --

MATTHEWS: How do we reduce it without passing bills getting signed
by the president?

MARTIN: Here is the way to do it. One penny out of every single
dollar the government spends this year, next year, for five years, and it
will be at a about a balanced budget. One penny.

MATTHEWS: How do you get the Democrats to do that?

MARTIN: How do you? What Democrat wouldn`t want to do that? It is
a common sense solution.

MATTHEWS: If they won`t what do you get? It sounds reasonable. If
it is not going anywhere, how does it reduce the deficit?

O`DONNELL: Well, that`s where we come in. We have to make sure we
educate voters, so they understand what we stand for and have true
solutions that aren`t radical or draconian that actually will address the
problems the Americans care about.

(CROSSTALK)

MATTHEWS: Until the Tea Party (INAUDIBLE) dominates the Congress and
White House, you don`t get anything done.

MARTIN: I don`t know that it dominates a Congress. It is a matter
of making sure we can convince Americans and Americans are willing to stand
up for our values.

(CROSSTALK)

MATTHEWS: I just want to know where it goes to. Every political
party, abolitionists said we would get rid of slavery. Prohibitions, what
do you call it -- let`s see, civil rights wants to -- they all have a goal
in mind. What I don`t understand with the Tea Party is I know your
posture, against government spending.

What`s your goal? To reach a passage on the floor and signed by a
president, gradual reduction of the dealt.

MARTIN: Balanced budget within five years, cuts the overspending.
Stops the overspending.

MATTHEWS: Doesn`t Ryan promised it in 20 years?

MARTIN: Twenty, 30 years. I appreciate the fact that he`s put that
plan forward. He`s put a plan forward. But 20, 30 years, we can`t --

MATTHEWS: Let`s -- please come back to the show, because I want to
talk about how it gets done. There`s so much posturing. Nancy Pelosi can
posture. Everybody can posture.

O`DONNELL: Anyone can posture, we are worried about three S`s --
strong, solvent, sovereign once again. That`s what happened under Reagan.
Reagan inherited a horrible economy and he fixed it. In just about two
years` time, he was able to campaign with it is Morning in America again.

Obama is hoping Americans don`t recognize the fact that government
actions do directly have an impact on whether a recession is prolonged or
shortened. Barack Obama could have done something and he chose not to. He
chose to make the problem worse.

(CROSSTALK)

MATTHEWS: He`s tried his way. If you get elected, you`ll try it
your way.

Anyway, thank you, Christine O`Donnell from Delaware. A great state.
First state.

And Jenny Beth Martin from Georgia. Jenny Beth -- I love the double
names.

Feature speaker tonight is going to be Paul Ryan. We`re going to
talk about him, big story. This is his record, by the way.

Is he -- the guy we are looking at now with all the pompoms there --
is he actually the fiscal conservative he claims he is? Is he another
party hack who votes for anything the president wants? All the war he
wants, all the prescription drugs he wants, all the tax cuts he wants. Is
he more like a regular pol, or a true philosopher?

We`re going to get to that in a minute on HARDBALL, the place for
politics.

(COMMERCIAL BREAK)

MATTHEWS: We are back.

In just a few hours, Paul Ryan will give the most important speech
for his political career. For a lot of delegates here in Tampa, it`s Ryan,
not his boss now, Mitt Romney, who is the big draw on the ticket.

"Politico`s" Jonathan Martin writes about the young Republicans, they
see their Ryan as their heir, in fact the heir of Ronald Reagan and the
future of their party. Quote, "The two bookends, Reagan and Ryan,
represent a party that`s unmistakably moving from George W. Bush`s
compassionate conservativism, to a new Republicanism that sounds a lot like
the old-time religion. With fresher packaging and to use the language of
their youth, these children of the `80s want to dispense for good with new
Coke, (INAUDIBLE) brand. And return to Coca-Cola classic."

I understand -- how about zero? Anyway -- at the same time, though,
while Ryan may play the role of the party`s chief deficit hawk, is history.
Specifically his 14-year record in Congress paints very different future,
actually very different picture.

There was a writing slip. We`re going to ask him about that.

Jonathan Martin is senior political reporter for "Politico". And
John Nichols is Washington correspondent for "The Nation."

Gentlemen, it`s great to have you.

UNIDENTIFIED MALE: Hi, Chris.

MATTHEWS: I was surprised in reading that Ryan voted for the Bush
tax cuts, voted for prescription drugs, voted for the wars. Voted for the
auto bailout. Never once for the bridge to nowhere.

Never once saying, well, wait a minute, I`m a fiscal conservative.
He said: yes, boss, yes, boss, yes, boss, yes, boss -- to every spending
and tax cut that enlarged the debt, actually accelerated the growth of the
debt under W.

How do you explain it?

JONATHAN MARTIN, POLITICO: That`s the chief critique, Chris, of Paul
Ryan, is that he didn`t get religion when it came to deficits until a
Democrat became president. Look, I think if he had to do it over again, he
would have been -- much more fiscally conservative member of Congress
during the Bush years. I think there`s huge regret among a lot of
Republicans about the spending during the Bush years.

But there`s no question that his record on spending is mixed given
the fact he did walk the line, as they say in Congress, on a lot of those
tough votes during the Bush years.

MATTHEWS: That`s what -- the Tea Party people are -- lot of them
don`t like. They don`t like people that just do the party business.

MARTIN: And -- that -- Tea Party crowd is as upset with President
Bush as they were. Keep in mind Tea Party started with TARP in the fall of
`08 when Bush was still president. That`s what really started this
movement was the spending and it began under Bush.

MATTHEWS: Let me talk to you -- my daughter worked for the Simpson-
Bowles. I wasn`t` for it at the time, but looking back, I think that could
have been a smart move for the president, to say, it`s not my budget but a
compromised budget. Paul Ryan wouldn`t be for it. He said no. He could
have made it happen.

Guys like Durbin voted for it. Tom Coburn voted for it -- far right
and liberal senator. So, it wasn`t impossible to vote for it. He wouldn`t
do it.

There is another cause he didn`t do what it took to be a true leader.
So, is Ryan the real Ryan, or is he a guy that pretends to be the real
Ryan?

JOHN NICHOLS, THE NATION: Look, I don`t think he knows who the real
Ryan is. This is a Washington careerist. He came there right out of
college. He was working with Jack Kemp.

You know, he helped write Kemp`s speeches in the `96 --

MATTHEWS: Kemp was never a deficit hawk.

NICHOLS: That`s what I`m saying. This is a guy who has believed a
lot of things for a long time.

But the one thing that he has always done is default to the Chamber
of Commerce position. He`s always done what Wall Street CEOs ask. To look
at this budget even now, you`re not going to find much different than that
now.

So, I somewhat disagree with my friend here.

MATTHEWS: It`s full of Babbittry.

NICHOLS: I do believe it. And I was with his mom this afternoon. I
don`t think he`s a bad guy.

MATTHEWS: Let me ask the other guy. A lot of us grew up, maybe guys
your age, you`re old for it. But most of us fell in love with Ayn Rand.
We read "The Fountain Head." Some of us read "Atlas Shrugged."

People like Alan Greenspan still believe that stuff. Is that
something that guides Paul Ryan? That true ideological belief in
individual?

MARTIN: Well, if you look at some of the votes that he took during
the Bush years, you would think otherwise. He was a party man during a lot
of those years.

Look, I think he is driven. Go back to his college year when he
started reading these books. I think he -- more than most politicians,
more than most members of Congress certainly -- is somebody who`s driven
less by quarterly fund raising numbers and polling in his direct and more
by issues and ideas and trying to get things done.

Now, that`s a pretty low bar given that most members of Congress are
chiefly interested. They are political creatures. That`s not a criticism.
That`s who they are.

So, I think he`s more of an ideas guy. But in terms of application,
you know, during the Bush years it wasn`t quite the true believer. I think
you`re seeing that more now. It`s going to be fascinating to see what
happens here on the years ahead. How he does vote.

MATTHEWS: Let`s talk about stakes here. I don`t disguise the fact I
like Obama. But I also look to the possibility if you get a Republican
victory for the presidency by Romney, he could easily win. He could win.
He would bring the Senate with him. Fifty votes, all it takes for
reconciliation. They could use that procedure to cut taxes for the rich,
cut corporate, cut cap gains, keep the Bush tax cuts and begin to cut the
programs they want to cut and go after entitlements except for Social
Security. They could do all that, OK?

So we could have a real one-party government for awhile, right? Do
you think Ryan would go and do it even if it means risking defeat in 2014,
come after that?

NICHOLS: No. I think he would be what he`s not always been. Not a
deficit hawk, but a political guy. He`s a Republican.

(CROSSTALK)

MATTHEWS: Soft to it.

NICHOLS: I think he likes to believe he is a guy who would be a bold
Reaganesque leader. And it`s important to remember that Reagan
compromised.

MATTHEWS: You and I cover politics, will this next administration,
if it`s Republican, be a true ideological administration or would it play
football, play politics and not really do it?

MARTIN: If Washington is based on compromise, if you want anything
done you have to compromise somewhat. This next administration be it
Romney, be it Obama term two, they`re going to compromise with the other
party to get some type of a package.

MATTHEWS: I disagree with you. I think they`re going to go for it.

MARTIN: Then otherwise, it`s gridlock.

MATTHEWS: I think they`re going for it. I think they`ll get through
one big smashing right wing move, then they`ll pay for it in 2014.

MARTIN: How do you do it?

MATTHEWS: Fifty votes it all it takes for cutting taxes and cutting
spending. They`re not creating anything. It takes 60 votes to do
something. It takes 50 to screw it and get rid of it.

Anyway, thank you, J. Martin. We`re all learning these procedures.
Thank you. But you can`t use it on Social Security Act.

MARTIN: Reconciliation.

MATTHEWS: Isn`t that boring?

Anyway, John Nichols, thank you, of "The Nation."

And be sure to tune in Monday night at 10:00 p.m. Eastern for my
documentary, "Barack Obama: Making History." It`s a hell of a lot better
than Dinesh D`Souza. I can tell you that.

That`s HARDBALL. By the way, this is the place for politics. Stay
tuned tonight for Rachel Maddow and myself and all the others on this team.
We`re going to be here all night.

(COMMERCIAL BREAK)

MATTHEWS: We`re back out here with the real people. It`s a mixed
bag tonight.

Sir, who are you for for president and why? Quickly.

UNIDENTIFIED MALE: Romney, of course, because only conservative
principles promote liberty, freedom, and prosperity. Only conservatives.

MATTHEWS: Madam?

UNIDENTIFIED FEMALE: Democrats. For Obama. For America.

UNIDENTIFIED FEMALE: Obama, no more deregulation.

(CHEERS)

MATTHEWS: Tell me who you are, sir.

UNIDENTIFIED MALE: I`m Mark (INAUDIBLE), minister from North
Carolina.

MATTHEWS: And who are you for?

UNIDENTIFIED MALE: I`m for Mitt Romney and Paul Ryan.

MATTHEWS: OK. Why?

UNIDENTIFIED MALE: The reason why we elected a president based on
perception instead of substance our economy is out of control to the place
it has become a security issue. And finally Romney has the experience to
get this country back to where it needs to be.

MATTHEWS: Are you a minister?

UNIDENTIFIED MALE: I am.

MATTHEWS: You sound like one.

UNIDENTIFIED MALE: (INAUDIBLE), Hampton Road --

MATTHEWS: You`re with one of the largest Tea Party organizations.

UNIDENTIFIED MALE: We are one of the largest Tea Party
organizations.

MATTHEWS: What do you think it`s about? Is the Tea Party running
the Republican Party, or is the Republican Party running the Tea Party?

UNIDENTIFIED MALE: We don`t want to repudiate the Republicans. We
want to redeem them.

MATTHEWS: You want to run it, don`t you?

UNIDENTIFIED MALE: We don`t want to run anything. We just want to
support conservative candidates.

MATTHEWS: How are you going to get something done though? I mean, I
understand your posture -- lower spending, lower taxes. But how do you get
that through the government, how do you get that through congress and get
it signed into law and actually do something? Or is it just a protest
movement?

UNIDENTIFIED MALE: You hold the politicians accountable when you
express to them how many members you have. You tell them the political
clout. They understand that.

They want votes. They`ll adhere to the Constitution from that point
on.

MATTHEWS: Are you worried you get Tea Party people nominated and
they get blown away in the general election like in Nevada and Delaware?
We just had Christine O`Donnell here. You have people too far right for
the voters and end up with nothing.

UNIDENTIFIED MALE: Well, sometimes it happens but it happens in any
election. We`ll see what happens in Texas with Cruz. I believe you`ll see
a different story there.

MATTHEWS: OK. Thank you. Thanks for coming here.

Who are you for and why?

UNIDENTIFIED FEMALE: I`m for Obama. I think he`s done wonderful
things for the middle class for the people who need health care. I`m for
pro-Obamacare. He`s made great strides in immigration.

I`m looking forward to seeing him win another term.

MATTHEWS: OK. And you young ladies are traveling the country
talking about the importance of having fair taxes on the upper 2 percent.
Right?

UNIDENTIFIED FEMALE: We are. We`re touring around. We`re called if
I were A Rich Man Tour. We are sponsored by Bend the Arc, a Jewish
partnership for justice. We`ve been traveling around. We`ve been in
California. We`ve been in Texas. We`re heading all the way to the DNC.

And we really believe that the Bush tax cuts need to be subsidized.

MATTHEWS: You`re all Jewish?

UNIDENTIFIED FEMALE: Yes, we are.

MATTHEWS: Are you Jewish too?

UNDENTIFIED FEMALE: I am too.

(INAUDIBLE)

MATTHEWS: You must be a Palacio (ph).

Anyway, from -- anyway, last question here. Same deal?

UNIDENTIFIED FEMALE: Same tour.

MATTHEWS: Who`s side here?

(CROSSTALK)

MATTHEWS: One last word.

UNIDENTIFIED MALE: I`m here for Obama because I have a pre-existing
condition and I need Obamacare.

(CHEERS)

MATTHEWS: Rachel Maddow and myself and all the other folks will be
back at 7:00 throughout the evening. Paul Ryan`s the big speaker tonight.

Up next "POLITICS NATION" with Al Sharpton.

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

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