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updated 12/13/2012 10:36:00 AM ET 2012-12-13T15:36:00

HARDBALL
December 12, 2012

Guests: Bill Ballenger, Douglas Geiss, Chip Saltsman, Michael Crowley, Jonathan Allen

CHRIS MATTHEWS, HOST: Severely conservative.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews down in Washington.

"Let Me Start" with this tonight. Did you get the impression during
the presidential campaign that the press was trying too hard to be even-
handed? Did you think the people delivering the news were pushing what we
call balance at the expense of the obvious facts, that the day-to-day
stories never got across the obvious big fact, that the Democrats in this
election were like Democrats going back to Jack Kennedy, but the
Republicans were far to the right of anything we`ve seen from that party
ever?

Self-deportation, forget the 47 percent, treat women like they belong
in binders, ignore the rights of gay people, crack down on abortion rights
even in cases of rape -- all those wild statements, all the lingo in the
GOP platform approved in Tampa, and not a word that one of the country`s
two major political parties has gone so far starboard that not even Ronald
Reagan could get aboard, and certainly not -- not by his own admission Jeb
Bush.

So tonight we`re going to nail it. We go to the truth, and why was it
the truth that dared not be reported in the mainstream media. Joining me
now for a brutal autopsy is Joan Walsh of Salon and David Corn of "Mother
Jones," neither of whom can be charged with hiding what`s wrong with the
right. Thank you both for joining us.

Here`s what Norm Ornstein, I guy I really respect, of AEI, the
American Enterprise Institute, told the HuffingtonPost about the broadcast
networks.

Quote, "I can`t recall a campaign where I`ve seen more lying going on,
and it wasn`t symmetric, but it seemed pretty clear to me that the
Republican campaign was just far more over the top. It`s the great
unreported big story of American politics. If voters are going to be able
to hold accountable political figures, they`ve got to know what`s going on.
And if the story that you`re telling repeatedly is that they`re all to
blame -- they`re all equally to blame, then you`re really doing a
disservice to voters and not doing what journalism is supposed to do."

Here on HARDBALL, by the way, we were onto the Republicans throughout
the primaries, very much onto them, and the general election. Take a look
at this look back.

(BEGIN VIDEO CLIP)

MATTHEWS: The crazy right rears its head. Let`s play HARDBALL.

I didn`t know there was a thin (ph) line between Joe Stalin and Barney
Frank!

EUGENE ROBINSON, "WASHINGTON POST," MSNBC POLITICAL ANALYST: Because
there`s not.

MATTHEWS: Now comes this Republican candidate in Missouri, Todd Akin,
talking about "legitimate rape" and spouting some caveman theory that sex
which is forced cannot result in pregnancy. Finally, we meet the missing
link, the evidence that the party of Lincoln cannot get in bed with the
most freakish elements of the right, the birthers and the personhood nuts
and all the rest of this menagerie, and not become itself a freak show.

Romney`s right. It`s not about Big Bird. It`s about the bird-brain
notions you and the hard right are running this campaign on.

They cannot accept the impurity of any policy. It has to be down the
line, which is the definition of a fanatic.

At least week`s debate, Romney showed his willingness to say whatever
would get him through the night. He can Etch-a-Sketch in real time now,
shifting his positions, denying the deals he`s made with the right,
positioning himself just where it works.

Have you seen a single case when Romney`s broken free from the mob
that`s brought him this far, a single Sister Souljah moment, if you will,
when he said to the Trumps, the Sununus, birthers, the Norquists, the
neocons, No, this time you ask too much? No.

(END VIDEO CLIP)

MATTHEWS: Well, I think we`re pretty clean of the argument that we
didn`t tap into the craziness and actually dishonesty of the right, Joan.

But here you have Norm Ornstein coming out with this big book with
Thomas Mann of the Brookings Institution, I believe. These are serious --
and they say, basically -- I think they`re talking about the broadcast nets
here. We haven`t gotten the full text. It seems to me their main thrust
is at the broadcast networks -- that they tried so hard to be, quote,
"balanced," that they missed the true asymmetry of these two political
parties in terms of ideology, where the one party shifted way off to the
right, the other party center-left, where it`s been for what, generations.

JOAN WALSH, SALON.COM, MSNBC POLITICAL ANALYST: Right.

MATTHEWS: And never caught that in the main news stories. Your
thoughts about coverage. I hate to be a media critic, but we`re into it
right now.

WALSH: Well, it`s -- you know, it`s very important, Chris, because --
it`s actually -- I did read the whole piece. It`s by Dan Froomkin. It`s a
really interesting piece, and you would enjoy it.

They are talking about newspapers. They are talking about magazines.
They are talking about cable. It`s not just the broadcast networks. And
they are saying -- you know, it`s a very -- it`s a scholarly book. It`s
very well researched.

And this is the amazing thing. When you read this Dan Froomkin piece,
you get the sense that these men are so wounded by -- now they are being
treated as pariahs. You know that both these guys -- there was once -- I`m
not going to mention the news organization -- it had a fatwa against
quoting Norm Ornstein just because he was such a mainstream guy. He was
the go-to guy. Go get us some other people.

And now Norm Ornstein is like some radical. He talks in the piece --
they both talk in the piece about how they cannot be on a show anymore
unless they`re balanced by Republicans so that they`ve become -- in a
sense, they`ve become the story themselves.

And it`s just -- it`s almost tragic that this very well researched
book that then puts their reputation on the line and says, You know what?
We`ve got to call this out, puts them outside the pale. And then they`re
radicals. It`s really a fascinating process.

MATTHEWS: This is an interesting story because it seems to me that
reporters are always on their good discipline (ph), a lot of good news
organizations (INAUDIBLE) Now, did you hear from the other side? That`s
fair enough.

WALSH: Right.

MATTHEWS: Did you check out the other -- did you hear -- let me see -
- I don`t see any sources here, high-level sources from the other side.
That`s all good journalism.

But if you torque a piece to the idea that both parties are basically
what they`ve been, you miss a big story. Norm Ornstein`s argument, along
with Thomas Mann, is you can`t look at this past election as the normal
American center-left versus center-right campaign. And if you do, you`re
not telling the big story.

DAVID CORN, "MOTHER JONES," MSNBC POLITICAL ANALYST: Well, there are
two issues here. One is the policy issue, the Republicans moved so far to
the right, which you focused on. One issue that they`re hammering, or that
Dan Froomkin is hammering, that I`ve written a lot about before the
election, too, is that there`s an asymmetry in the amount of actual lying
or the type of lying that was done by -- by...

MATTHEWS: Give me a couple examples so -- refresh us.

CORN: OK. I wrote a piece beforehand which I think -- which is very
much in keeping with their thesis and what Dan wrote, saying that I thought
the Romney campaign was much more foundational in its lies about Obama.

And by that, I mean that the core of his campaign, the core of his
argument -- Obama promised to lower unemployment below 8 percent. Not
true. Obama appeases. Not true. Obama went on an apology tour. Not
true. Obama wants to cut $500 million -- billion, excuse me, out of
Medicare. Not true.

A lot of his key arguments, and of course, the Jeep ad at the end,
which has now been declared the number one lie of the year by...

MATTHEWS: You know which one of them offends me the most?

CORN: Well, you can pick...

MATTHEWS: The one that really offends me is the apology tour because
what it is -- as you say, it`s foundational.

CORN: Yes.

WALSH: Right.

MATTHEWS: He`s launching -- he`s putting that down on the ground,
Joan. I want to get Joan in here. He puts that down on the ground as his
sort of -- his takeoff platform. Oh, he`s apologizing, but I`ll be a
robust patriot. I`ll defend America against fact or -- you know, against
anything, foe or friend, because I`m a real American. And this guy,
because he recognizes we live in a world of other countries that are decent
countries -- they`re not all the enemy out there.

This right-wing attitude, it`s just us...

(CROSSTALK)

MATTHEWS: ... or sometimes just us and Israel against all these evil
third world people, and they`re just crazy about that. And it is so
dangerous.

CORN: But if I could finish this point for one second -- the thing is
-- and this is what Ornstein and Tom Mann are saying, too...

MATTHEWS: Yes.

CORN: ... that his campaign was based on a lot of major, big,
sweeping lies. Now, you can look at Obama and point out that he made a
mistake or he misrepresented Obama`s policy in this way or that way, but
his -- you know, his overall case was not based on a series of falsehoods
against Mitt Romney, while, indeed, that was true on the Republican side.
And that`s the asymmetry.

And they point out that the media has a really hard time saying that.
It`s much easier to say everybody lies on both sides.

WALSH: Right. The false equivalence.

CORN: But not all lies are created equal or have equal impact.

MATTHEWS: Joan?

WALSH: Well, yes. I mean, there`s this constant false equivalence
that we`re always trying to fight here, Chris. And I think you do a good
job of it, but it`s really ingrained in the Beltway culture...

MATTHEWS: OK...

WALSH: ... to say that they`re both as radical, they`re both -- you
know, even in the debt ceiling debate or in the fiscal cliff negotiations,
that neither side will give and they`re both being unreasonable, and really
not drilling down.

The other thing they do is they really go back to Newt Gingrich and
Grover Norquist, changing -- as you`ve talked about both these things --
changing the culture of Washington and really making compromise impossible.

MATTHEWS: Yes. I agree. Here`s something people left, right and
center can buy. Here`s something really naughty, I think, in terms of
politics, to use a nice little high school or grade school term. Who can
forget back in August, not a million years ago, when the Romney pollster,
Neil Newhouse, said the following. "We`re not going to let our campaign be
dictated by fact checkers."

I mean, think about what that says -- fact checkers meaning facts.

CORN: Yes.

WALSH: Right.

CORN: We were on the -- I was on the show with you the other night,
and we talked about the quotes of the year, 47 percent...

MATTHEWS: That`s a good one.

CORN: I thought this should be the top two or three...

WALSH: Yes.

CORN: ... because that just showed their whole attitude towards
reality, towards being vetted. It was sort of an arrogance that, We can
say whatever we want to say. And I think in years past -- this is what`s
changed -- campaigns would not be so brazen. If they`re caught in a lie,
they try to wiggle around it. They maybe feel some shame. But here was
Neil Newhouse telling reporters -- he said this at a breakfast meeting at
the convention to a group of reporters...

WALSH: Right.

CORN: ... that, We don`t care what you say about our facts. We`re
going to use them anywhere. Good example was what they said about Barack
Obama changing Welfare rules...

WALSH: That`s my favorite.

CORN: ... so that people don`t have to work. And that`s what he was
referring to...

MATTHEWS: OK, let`s go back to...

(CROSSTALK)

MATTHEWS: You`ve got people like Michele Bachmann, who would say just
casually that we should begin an investigation of members of Congress for
their anti-American attitudes. That was followed up by Adam -- Allen West,
who`s just been defeated, Allen West saying there are 79 to 81
communists...

WALSH: Right.

MATTHEWS: So it was just a little escalation. It was an easy jump.
That was the alley-oop play. He got the ball from Michele...

(CROSSTALK)

MATTHEWS: Yes, he confirmed the news.

WALSH: Right.

MATTHEWS: But nobody -- you know, you would think that "THE NIGHTLY
NEWS" would come on or any -- evening news or any of the news organization,
whether "The New York Times" -- say, Wait a minute. This is so frickin`
far out. This kind of claim goes back at least to Joe McCarthy. But the
idea of the specificity of it -- there`s 81. The idea -- and that somehow
-- well, some people believe there are 81 communists in the Democratic
Party in Congress. Some don`t agree.

WALSH: Some don`t agree.

MATTHEWS: Let`s hear from the pros...

(CROSSTALK)

MATTHEWS: Let`s hear from the cons here. Yes?

WALSH: But my -- really, one of my favorites, Chris, was when Rick
Santorum insisted that President Kennedy`s religion speech in Houston put
religion out of the public sphere and it made him want to throw up.

MATTHEWS: Yes.

WALSH: And not one reporter who recorded that remark in real time
said -- went to Google -- which I did -- I said, I know it didn`t -- it
didn`t do anything of the kind -- went to Google, looked at that speech and
said, As a matter of fact, he talks about the role of religion. He talks
about the priests in his life.

You know, so it`s sort of like you`re just -- I understand that on
deadline it can be very difficult, but you`re just allowed to spew this
stuff, and people don`t even sometimes use the basic tools of journalism to
say, Really? Is that what President Kennedy said?

(CROSSTALK)

MATTHEWS: The best line in that speech, which may be Jack Kennedy`s
best speech of the campaign, was, The issue here is not what church I go
to, it`s what kind of America I believe in.

CORN: Yes.

MATTHEWS: And I think -- it just said, The issue on the table here is
not my theology or my beliefs or my faith or lack thereof, it`s about this
country and what this country should say to people of faith or no faith.
It should be how we treat as Americans all the different belief systems.

CORN: Let me up the ante...

MATTHEWS: Your thoughts.

CORN: Let me up the ante on what Joan just said because that`s right,
you know, people didn`t check. And on deadline, there may be an excuse.
What to me happened a lot during this campaign is even when politicians --
and I think Romney did this more than Obama -- I think you can make that
case -- are called out on lies -- just say what they are -- they still kept
repeating them...

WALSH: Yes.

CORN: ... the Welfare lie, which I mentioned earlier, cutting
Medicare by $500 billion...

MATTHEWS: Yes, I know.

CORN: Again and again. It didn`t matter when they...

MATTHEWS: I know, and you know, we have more freedom here, guys. We
have more freedom here on HARDBALL, I admit. I don`t write the main bar of
"The New York Times." I couldn`t say something like, Newt Gingrich will
never be president of the United States. Let`s start with that as the
first lead sentence. Rick Santorum is never going to be nominated even by
today`s Republican Party. He`s too far out. But you can`t do that because
in fairness and balance, you have to assume, Hey, there might be a chance
this guy will win. Who knows?

Anyway, thank you, Joan...

WALSH: You can`t call him Mephistopheles...

(CROSSTALK)

MATTHEWS: I think I called Newt...

(CROSSTALK)

MATTHEWS: But I said -- I also said, in all fairness, he can`t be the
devil because he looks like the devil.

(LAUGHTER)

MATTHEWS: And we all know from grade school the devil looks like
Marilyn Monroe. Anyway, thank you, Joan Walsh, and thank you, David Corn.
The devil`s deceitful. Newt always looks like Newt -- Mephistopheles!

Coming up: If you`re pro-labor, this is the kind of image you don`t
want broadcast all around the country.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Get the (EXPLETIVE DELETED) out of my face! Get
the (EXPLETIVE DELETED) out of my face!

UNIDENTIFIED MALE: You hurt a lady in there!

UNIDENTIFIED MALE: I didn`t hurt nobody! Get out of my face!

(END VIDEO CLIP)

MATTHEWS: It gets worse. That`s video of a Fox News contributor
being harassed, beaten and eventually punched in the face by union workers
yesterday in Michigan. Nothing that happened inside the Michigan
statehouse, unfortunately for labor, will have the same lasting impact as
what happened right there outside the statehouse yesterday. Labor has
plans to fight back against anti-union governors, but first they`ve got to
do some explaining about that. Do you think?

Also, Mitch McConnell seems to be doubling down on the fiscal cliff
debate, saying he`s out to use the debt ceiling to blackmail the country
into deep cuts to Medicare and Medicaid. Would the Republicans really jump
from one crisis to another and kill the recovery of this country just to
get their political game (ph)?

And meanwhile, when Mitt Romney said this is about President Obama,
listen.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R-MA), FMR. GOV., FMR. PRES. CANDIDATE: Speaking about
small business and businesses of all kinds, he said this. If you`ve got a
business, you didn`t build that. Somebody else made that happen.

(END VIDEO CLIP)

MATTHEWS: Well, that was just one of the top 10 finalists in
Politifact`s "Lies of the Year" list. We`ll get to that and we`ll count
down the top finishers and reveal the winner at the end of our show
tonight.

Finally, "Let Me Finish" tonight -- you`ll love to hear this -- with
the ultimate victory of truth.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Who`s the least popular U.S. senator in the United States?
Well, according to PPP`s polling, it`s Mitch McConnell of Kentucky. The
Republican leader isn`t loved in his home state. Only 37 percent of
Kentucky voters approve of McConnell, 55 percent in Kentucky disapprove.
Before President Obama was inaugurated, McConnell famously or infamously
announced his top priority, make Obama a one-term president.

Guess what? Oprah won on that one. And Democrats have a chance for
some payback. McConnell`s up for reelection in 2014. Come on, Ashley
Judd!

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. Well, things got ugly yesterday
in Michigan as the home of the American auto industry became the 24th right
to work state in a huge blow to labor. About 10,000 protesters were
outside the capitol, and some even brought down a tent housing right to
work supporters from the Koch brothers group, Americans for Prosperity.
And a Fox News contributor, Steven Crowder, suffered a cracked tooth as a
result of a punch from a union protester.

Here`s a video Crowder posted on line.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Get the (EXPLETIVE DELETED) out of my face!

STEVEN CROWDER, FOX CONTRIBUTOR: Don`t tear down the tent!

UNIDENTIFIED MALE: Get the (EXPLETIVE DELETED) out of my face!

CROWDER: You hurt a lady in there!

UNIDENTIFIED MALE: (INAUDIBLE) I didn`t hurt nobody! Get the
(EXPLETIVE DELETED) out of my face! Back the (EXPLETIVE DELETED) up!

UNIDENTIFIED MALE: Stop tearing down the tent!

UNIDENTIFIED MALE: Back the (EXPLETIVE DELETED) up!

(END VIDEO CLIP)

MATTHEWS: Let`s go to Michigan, where I`m joined by Bill Ballenger.
He`s editor of "Inside Michigan Politics." We also have Doug Geiss. He`s
a Democratic representative in the Michigan statehouse.

Mr. Ballenger, thank you. I hear you`re a good reporter. What
happened there yesterday? Can you give us a good report on what we saw in
words?

BILL BALLENGER, "INSIDE MICHIGAN POLITICS": Not really. I think with
12,500 people milling around the capitol and inside the capitol, it`s a
miracle there wasn`t more of this than there was. I think there were only
three arrests, three pepper spray attacks by the police. So I think you
could have expected this, and I don`t think we should be upset.

MATTHEWS: Well, let me ask you -- whether you`re upset or not, I want
to know what happened. So what happened? There you have a reporter from -
- all right, a conservative organization, Fox, punched in the mouth by a
union supporter. You don`t think that`s significant? That`s not going to
be used against the labor movement for months and years ahead?

BALLENGER: Oh, I think it`s possible it will be, sure. Yes. I
mean...

MATTHEWS: Why would it be used? It will be used for a reason. It`s
iconic. And you say it shouldn`t upset people. Don`t you think it will?

BALLENGER: Well, no, I`m just saying that violence in the capitol in
general yesterday under those circumstances I think could have been
expected, and it could have been a lot worse.

I agree with you. There will be things extracted from confrontations,
whether they were in the legislature, outside the legislature, between
demonstrators and the press that can be used by one side or the other as
political ammunition, and it probably will be.

Is it fair? No, it isn`t. But this is American politics, as you
know. Happens all the time.

MATTHEWS: Well, let me go to a politician. Representative Geiss,
thanks for joining us. You had a statement out there. Let me -- or here
you are on the floor of the Michigan legislature. Let`s watch what you
said here. Listen.

(BEGIN VIDEO CLIP)

DOUGLAS GEISS (D), MICHIGAN STATE REPRESENTATIVE: There will be
blood. There will be repercussions. We know that we have got a hundred
representative folks intending to walk into the job and say I`m not going
to pay any dues anymore. There`s going to be bodies.

(END VIDEO CLIP)

MATTHEWS: There will be blood. What do you make of that? What are we
to take from that, there will be blood? Was that a premonition? Were you
suspecting it would get this violent?

GEISS: The full seven-minute video kind of leads up to this point to
state that this is one of the most important and divisive issues that the
Michigan House of Representatives could have taken up.

I personally do not condone violence. I do not condone...

MATTHEWS: Well, what did you mean by blood? I`m sorry. Just tell...

(CROSSTALK)

MATTHEWS: ... came to mind for you?

GEISS: Yes. What came to mind for me is, if you don`t learn from
history, you`re bound to repeat the mistakes of history. And in the speech
that I gave, I talked about the battle of the overpass.

We know that when we have two sides that are ferociously battling on
the right to work, the right to unionize, the polar opposites on this
issue, what are the possible outcomes? And we have to look back to history
to understand what it took to get us to this point.

And what I was trying to say to my colleagues was, when we came in as
freshmen four years ago, we said that we would work together in a
bipartisan manner. And I learned that lesson from Tip O`Neill, Chris. I
was one of three pages that boxed up Tip O`Neill`s belongings up and sent
it off to Boston College in December of 1986.

And I always believed that we should be able, much like Tip O`Neill
always said, to leave the issues on the floor and be able to go and have a
beer at 5: 00.

(CROSSTALK)

MATTHEWS: Well, having a beer is a far cry from punching somebody in
the face.

GEISS: Well, I agree, and I do not condone punching anybody in the
face.

But we know -- I don`t know what the equivalent issue would be on the
far right. But, on the left and...

(CROSSTALK)

MATTHEWS: While I have got you there, while I have got you -- I`m
glad to have you on because you`re right in the middle of this. Where is
this going to end up? Michigan was way ahead of everybody else with
collective bargaining. Way back in `37, you got the UAW recognized. It`s
one of the finest unions we have ever had in this country, clean as a
whistle all these years, Reuther brothers, Walter Reuther, Victor, they
were great men.

Is this going to be the face of -- that guy may be IBEW. We don`t
know who he`s from. You got to look at that sweatshirt, I guess, to figure
out who he is. But what`s going on in labor? Is it this angry that we`re
not going to have that finer labor movement look we have had in the past
where it looks like the people who care about health care, looks like the
people who are looking out for the whole economy, not just their
membership? Can you get past that picture we`re looking at?

GEISS: Well, I don`t think you ever take one or two or three people
and try to paint everybody that`s in that union with the same brush stroke.

Of course people will try to do it. But there are those hardworking
union members that will fight for what`s right in a nonviolent manner. And
that`s what I believe you will see as the continuing face.

(CROSSTALK)

MATTHEWS: OK. OK. Look, can we just talk about what I`m going to
do? I`m going to invite that guy who threw that punch to come on this show
and tell us why he did it, because if he singles himself out, he won`t
represent labor anymore.

As long as that picture is just an unidentified member of a labor
union, if he is a member of a labor union, it`s going to hurt labor
generally. I should he should step forward and say, if there`s no charges
made here, I will tell you who I am.

Let me ask you, Bill, just thoughtful here. The history of these
industrial states, which we all root for here, working states, what built
this country, industrial unions that really build things, manufacturing
states, is this a long trend line we`re looking at or is it a cycle of
right-wing movement here?

BALLENGER: I`m afraid it`s probably a long trend line. Our
percentage of union membership in the state is supposedly down to around 17
percent, if you can believe that.

MATTHEWS: Really?

BALLENGER: And Michigan was considered the cradle of unionism. So,
you know, unions are under assault, not just in the private sector, Chris,
but the public sector unions.

Remember, right-to-work yesterday has affected the entire public
sector union movement. And that`s where most of the membership and growth
has been in the union movement in the last decade or two.

MATTHEWS: OK.

It`s great having you on. Bill, I hear you`re a great reporter.
Thank you.

And, Mr. Geiss, thank you for your -- good luck with your political
career.

Doug Geiss and Bill Ballenger.

Up next, one of the vanguards of the far right, Richard Mourdock, is
still pointing fingers after losing that Senate race in Indiana. And he
sounds like -- let`s put it this way -- a sore loser.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. And now to the "Sideshow."

A merry cliff-mas from Stephen Colbert.

(BEGIN VIDEO CLIP, "THE COLBERT REPORT")

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": Everywhere you go, you
could see the twinkle in little children`s eyes because they know that in
just a few short weeks, the fiscal cliff is coming to town.

(LAUGHTER)

COLBERT: Merry cliff-mas.

(LAUGHTER)

COLBERT: If the parties here cannot agree to a budget deal by January
1, automatic spending cuts will kick in and plunge America into a second
recession.

And things are not looking too good.

WOLF BLITZER, CNN: Democrats and Republicans are blaming each other
for the stalled negotiations.

SOLEDAD O`BRIEN, CNN: Who`s going to blink first?

ANDREA MITCHELL, NBC CHIEF FOREIGN AFFAIRS CORRESPONDENT: Who`s going
to blink first?

UNIDENTIFIED MALE: The White House is daring Republicans literally to
blink.

(LAUGHTER)

COLBERT: Obama is daring Republicans literally to blink.

(LAUGHTER)

COLBERT: Well, the joke`s on him because I know some Republicans who
have had their eyelids surgically removed.

(LAUGHTER)

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Also, what caused former Indiana Senate candidate Richard
Mourdock, at first the likely winner in that race, to wind up losing to
Democrat Joe Donnelly?

You might well point to this moment from a Mourdock/Donnelly debate.

(BEGIN VIDEO CLIP)

RICHARD MOURDOCK (R), FORMER INDIANA SENATORIAL CANDIDATE: I
struggled with it myself for a long time, but I came to realize life is
that gift from God. And I think even when life begins in that horrible
situation of rape, that it is something that God intended to happen.

(END VIDEO CLIP)

MATTHEWS: Mourdock`s popularity plummeted after that comment.

Now Mourdock is trying to pay down some campaign expenses, his debt,
in fact. Guess who`s getting blamed for his reelection -- or his election
loss in the fund raising e-mail? Quote -- this is from him -- "Republicans
all over the country were forced to accept defeat rather than celebrate
victory. In our case, we found our campaign caught in the liberal media
crosshairs. Never has Indiana seen a more obvious example of media bias by
reporters more interested in defeating conservatives than reporting the
news."

Well, it`s the liberal media`s fault. And that settles that, I guess,
in Indiana. There`s a chance that RNC chair Reince Priebus had Mourdock in
mind yesterday, however, when he said this while reflecting on some of the
2012 Republican candidates.

(BEGIN VIDEO CLIP)

REINCE PRIEBUS, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: I think we
were pretty clear on some of the dumb things that were said over the last
cycle.

(END VIDEO CLIP)

MATTHEWS: Not a good sign when a look back at your party`s candidates
includes the word dumb.

Next, when in doubt, blame the welfare state. That is what happened
on CNBC Today when Mitt Romney`s former economic adviser, Glen Hubbard,
fell victim to an unexpected interruption.

(BEGIN VIDEO CLIP)

GLENN HUBBARD, FORMER MITT ROMNEY ECONOMIC ADVISER: They either have
to raise taxes or cut some other spending. That forces the Congress to
think about the mix between taxes, spending outside of the entitlements and
spending on the entitlements.

That`s just not something that our framers thought about, because we -
- we didn`t have a welfare state in those days.

UNIDENTIFIED FEMALE: Glen, are you all right?

HUBBARD: I`m fine.

UNIDENTIFIED FEMALE: OK. Good.

HUBBARD: That`s what happens when you criticize the welfare state.

(END VIDEO CLIP)

MATTHEWS: Wow. Somehow, he`s completely unfazed after the fact
there. And that video went viral just about instantly.

Finally, a PPP poll last week showed that 25 percent of Republicans
want their state to secede from the union. I guess that means most of us
oppose it.

A quick status update from David Letterman`s "Late Show."

(BEGIN VIDEO CLIP, "LATE SHOW WITH DAVID LETTERMAN")

ANNOUNCER: Secession update, still holding steady at 50 states.

UNIDENTIFIED MALE: Whew. That was close.

(END VIDEO CLIP)

MATTHEWS: Still in the clear, I guess.

Up next: Are the Republicans planning on using the debt ceiling
deadline to blackmail the country into cutting Social Security and Medicare
and Medicaid? That`s ahead.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

HAMPTON PEARSON, CNBC CORRESPONDENT: I`m Hampton Pearson with your
CNBC "Market Wrap."

Stocks turned lower on comments from Fed Chairman Ben Bernanke. The
Dow falls three. The S&P ended flat, the Nasdaq down eight points. At
today`s news conference, the Central Bank chair said interest rates would
stay low as long as unemployment remains above 6.5 percent. And American
Airlines has a new fare structure. It will charge $88 more for a basic
ticket that includes checked baggage and no fees for flight changes.

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

MATTHEWS: Welcome back to HARDBALL.

There was a hint of movement on the fiscal cliff deal between
President Obama and Speaker Boehner yesterday. Here`s where things stand
for now. The White House sent over a proposal that lowered the revenue
target for the president from $1.6 trillion over 10 years to $1.4 trillion.
He also increased, the president did, spending cuts from $400 billion to
$600 billion, plus a promise to achieve corporate tax reform.

So you have three things he`s moving on there. Speaker Boehner was
not impressed, sending over basically his original offer of $800 billion in
revenue. He had that -- by the, way that was the number last summer,
summer of `11 -- and acknowledged there`s a long way to go. Let`s listen
to him.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I remain the most
optimistic person in this town, but we have got some serious differences.
The president and I had a pretty frank conversation about just how far
apart we are.

(END VIDEO CLIP)

MATTHEWS: And in an interview with Barbara Walters, the president
held firm on taxes and said time is running out.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Taxes are going to go
up one way or the other.

BARBARA WALTERS, CO-HOST, "THE VIEW": On the -- they are.

OBAMA: And I think the key is to make sure that taxes go up on the
high-end individuals like you and me, Barbara. We can afford it. It is
entirely possible for us to come up with a deal, but time is running short.

(END VIDEO CLIP)

MATTHEWS: Joining me right now is Pulitzer Prize-winning "Washington
Post" columnist and MSNBC political analyst Eugene Robinson, also
Republican strategist and former Huckabee, Mike Huckabee, presidential
campaign manager Chip Saltsman.

I am always impressed, Chip, by people who have actually been campaign
managers, not these people that call themselves Republican or Democratic
strategists, which meant they drove a car for somebody once.

(LAUGHTER)

MATTHEWS: My theory there.

But let me get you to because you`re a Republican.

I think -- look, I think the president`s trying here, but I can`t tell
what`s going on. He`s lowered his revenue demand to 1.4. It`s working its
way down to where I think it will end up, 1.2. He`s also increased his
commitment to cutting spending, without really defining where it`s going to
come from, from where he was last year, about 350, up to about 800.

So he`s moving. I`m sorry. He`s up to about 600. So he`s moving. I
didn`t think he would get past 400 in terms of spending cuts.

What`s the Republican position as you read it right now?

CHIP SALTSMAN, FORMER MIKE HUCKABEE CAMPAIGN MANAGER: Well, I think
the good news is that they`re actually talking.

I always jokingly say the more staff you see in the room negotiating,
the less likely there`s going to be a deal.

MATTHEWS: Yes.

SALTSMAN: And, at the end of the day, these are the two folks that
are going to have to be in the room to have this deal.

And what are their have-tos? And I can tell you from where the
Republican Conference is, the appetite for tax increases of any sort aren`t
really high. And I think, as you have seen some senators kind of cross
that line and say, yes, let`s talk about that, let`s talk about the top 2
percent, they`re slowly -- some of them are going that way.

But the bulk of the conference is not there. But, really, they need -
- my guess is, I`m counting right -- maybe 40 or 50 House Republicans to
get some kind of deal done of which they have got maybe 20 lame-ducks that
will vote for anything.

MATTHEWS: Gotcha.

SALTSMAN: So they really need to convince about 30 maybe at the most.

MATTHEWS: So, they will corral -- as they say, they`re going to
corral 30 or 40 to add to the lame-ducks. And that will be enough, maybe.

Gene, do you read it that way, it`s going to have to be a horse and
rabbit stew, it`s going to have be a lot more Democrats?

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Oh, I think absolutely. I
think it passes with Democrats and some Republicans is the only way it gets
through the House.

MATTHEWS: So, it`s easier for a Democrat to buy into something that
raises the taxes on the rich, is what they campaigned on, at the price of
some cuts of indefinite nature to these big entitlement programs.

ROBINSON: Or even if they get a bit more definite. I think you could
get Democrats to buy into some cuts that technically don`t touch the sacred
cows or don`t touch them in the wrong place.

MATTHEWS: Yes.

(CROSSTALK)

MATTHEWS: Touch beneficiaries.

(CROSSTALK)

MATTHEWS: Anyway, a piece in today`s Talking Points Memo headline,
"McConnell-Obama. Obama wins the tax fight. Now on to the debt limit,"
indicates that McConnell is not averse to using the debt limit, which comes
up in February, apparently, as a negotiating tool right now.

He says: "We`re going to insist that we have another discussion about
the future of our country in connection with the request of U.S. to raise
the debt ceiling."

Anyway, this was a reinforcement of what he said last week on the
Senate floor. Let`s listen to what he said last week on tape.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: For months, the
president`s been saying all he wants is to raise taxes on the top 2 percent
so he can tackle the debt and the deficit.

However, yesterday, he finally revealed that`s not really his true
intent. By demanding the power to raise the debt limit whenever he wants
by as much as he wants, he showed what he`s really after is assuming
unprecedented power to spend taxpayer dollars without any limit at all.

(END VIDEO CLIP)

MATTHEWS: Chip, is that accurate what he just said that? I think the
president means how about a ceasefire the next time this thing comes around
in two months. He`s not going to get a law that gets rid of the debt
ceiling requirement. It`s a law that Congress passed years ago that says
they`ve got to raise it every time they have to borrow more money.

He`s -- I don`t think he`s asking to get rid of the law. He`s simply
saying, next time around, guys, let`s not have another stop the government
game, another hostage situation.

How do you read what McConnell said there? I think he misrepresented
the president.

SALTSMAN: Well, I think there`s a little bit of both on right on this
kind of thing. I think McConnell sees this as an opportunity to make some
political hay out of the president saying I don`t want to have this
discussion over the debt limit anymore. And I think the president says
let`s not have this fight anymore.

And I think for Republicans, look, we both know how great the
Congress is at solving solutions when there`s no pressure points, right?
They just talk and talk and nothing gets happened.

Well, they say obviously the end of the year, there`s a pressure
point with the fiscal cliff. They see the next pressure point being
February with the debt limit to try to get some serious spending cuts and
really go after the big three entitlements to get what they want, which is
to lower deficit through spending cuts.

MATTHEWS: Let`s go to McConnell. He`s not a popular guy anywhere,
least of all right here.

EUGENE ROBINSON, THE WASHINGTON POST: Correct.

MATTHEWS: But let me ask you this. Is he stupid? He`s not a stupid
man.

Why would he say he would stop the government, have us risk another
lowered credit rating in order to cut programs which are essential to so
many people like Social Security and Medicare? Why would he hang that out
as a goal?

ROBINSON: Well, to throw the debt ceiling thing out there might be
popular among some Republican officeholders in the city. I don`t think
it`s really popular beyond that. What he said is a complete
misrepresentation because after all, raising the debt ceiling is to pay for
what Congress has already authorized.

MATTHEWS: Paying your bill.

ROBINSON: Pay the bills that Congress has already incurred.

And I don`t think this is a fight you really want to have with
President Obama. He -- as a point of principle, he really does believe --

MATTHEWS: There`s one reason to have it -- bring on a second
recession. Screw up the economy so bad that Obama`s record in history
doesn`t make sense.

ROBINSON: This is one of the things, it`s really hard for him to bet
on it.

MATTHEWS: He`s a real bad guy lately. I think McConnell stopped
being a real conservative and simply being a guy who wants to bring down
Obama.

Anyway, the new NBC "Wall Street Journal" poll shows Democratic Party
approval far higher than Republican Party. Look at this, they`re usually
as far as neck and neck. Look at this, 44 percent approval of the
Democrats, 30 percent, just 30, a 14-point difference.

The poll also shows that 59 percent say President Obama has a mandate
to eliminate tax cuts for the rich. Just 36 percent.

So, look at that number -- how do you look at that, Chip? That`s
pretty solid at 59 percent. How can the Republicans on the Hill deny it?

SALTSMAN: Well, we lost a major -- we lost a national election,
obviously. We didn`t gain control of the Senate when we said that. We did
get control of the House.

President Obama is the guy that beat us. And so they`re riding high
right now. And they have framed this issue about tax increases on the
rich.

And as I jokingly say, when you polled 98 percent of the people they
always agree tax the other guys. And when we --

MATTHEWS: I know. Don`t tax me. Tax the guy behind the tree.

SALTSMAN: Yes. That`s exactly right.

MATTHEWS: Let me ask you a question. You`re a great guest. Would
Mike Huckabee had won this general election had he the candidate of the
Republican Party? Mike Huckabee? He`s a real conservative.

SALTSMAN: Well, I`m awful biased, but I really think he would have
had an opportunity to win and beat Obama for one simple reason. He`s a
conservative but he`s not angry about it. And he`s able to discuss what he
believes in a way that doesn`t make people mad and really opens him up to a
conservative way of thinking. And he`s the guy who can connect.

MATTHEWS: Yes or no, would he have won? Would he have won, yes or
no?

SALTSMAN: I think yes. I think yes.

MATTHEWS: I want to make news around here, Chip. You`re a big show.
We want you on more often.

Thank you, Chip Saltsman, who ran --

SALTSMAN: Yes, sir.

MATTHEWS: -- the almost happened Mike Huckabee campaign.

Gene Robinson, sir, thank you.

ROBINSON: Thanks.

MATTHEWS: Up next, "PolitiFact" lists the lies of the year. This
will perk you up actually. It sounds negative. It`s positive.

In the year of distortion and dishonesty, which lie tops the list?
These are lies that got caught, of course. That`s why they`re good.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Coming up, the biggest lies of this election year.
"PolitiFact`s" got the list and it`s coming up next.

You`re watching HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL.

Each year, the editors and reporters at "PolitiFact," the fact-
checking Web site run by the "Tampa Bay Times", shows their lie of the
year. And there was plenty of competition this year, of course. We`re
going to count down to the winner tonight.

But we selected a few nominees that got a lot of coverage here on
HARDBALL.

The first is that under -- actually that under President Obama,
welfare recipients would get welfare checks without doing anything. The
Romney campaign turned it into an ad.

Here`s part of it.

(BEGIN VIDEO CLIP)

AD NARRATOR: Under Obama`s plan, you wouldn`t have to work and
wouldn`t have to train for a job. They just send you your welfare check.
And welfare to work goes back to being plain old welfare.

(END VIDEO CLIP)

MATTHEWS: Joining me here to hear the nominees and the winner of
"Politifact`s" lie of the year are "Time" magazine`s Michael Crowley and
"Politico`s" Jonathan Allen.

Let`s go right now.

What do you think, Michael, of that one? That was the one that said
welfare -- you get the check out the work. It turns out a bunch of
Republican or several Republican governors had said, you know, we want to
change the rules so we get more education to work permanently and it`ll be
more effective, nothing about welfare without work requirement.

MICHAEL CROWLEY, TIME MAGAZINE: Yes. I think it was a couple
Republican governors. This was a minor thing they wanted waivers from the
administration. The administration said they might be willing to give them
if they came up with good plans.

And the ad -- what was so misleading about the ad was the implication
that Obama had this plan. I mean, the clear implication was that Obama had
this sweeping plan that was going to undo the welfare from the `90s that
everyone was so familiar with. So, the administration said they might give
waivers to a good plan in the states presented. But there was no sweeping
plan. There was no overhaul and so there was a grain of truth to it, but
the basic overall message was wildly misleading.

MATTHEWS: Let`s face it. It made the president look like he was in
favor of the people who are welfare cheats basically. I want to give them
something free, right?

JONATHAN ALLEN, POLITICO: Of course, that would be a great position
for him to have in an election.

MATTHEWS: So I hear about it.

It`s also separated from Clinton, which was smart, I guess.

The other real entry that got to me and it got a lot of mileage out
there was Mitt Romney`s assertion that President Obama had gone on an
apology tour overseas. Romney even included it in his acceptance speech at
the Republican National Convention. Let`s listen to this one.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: I will begin my
presidency with a jobs tour. President Obama began his presidency with an
apology tour. America, he said, dictated to other nations.

No, Mr. President, America has freed other nations from dictators.

(END VIDEO CLIP)

MATTHEWS: You like the way he gets a little lachrymose? He gets
teary-eyed. A little mucus there. He`s apologizing -- a lie.

ALLEN: No apology. No tour. The only thing that the Democrats were
saying when they came in -- what Obama was saying when he came in was,
look, George Bush alienated a lot of our friends and certainly further
alienated some of our enemies. We`ve got to get back only a path where the
United States is in a better place, vis-a-vis the rest of the world. And
you did see some of that.

Nothing like an apology tour. And, by the way, President Obama did,
in fact, take out some dictators himself.

MATTHEWS: I know.

ALLEN: Moammar Gadhafi --

MATTHEWS: That`s the one that disturbs me, Michael, because I think
he was setting that up as a predicate for he was going to be one a "America
firster" and he was going to be one of these American exceptionalists that
went around saying, we`re always right, you`re always wrong. Get out of
the way.

That was I was afraid of. I thought it was war talk.

Your thoughts?

CROWLEY: Yes. Well, you know, Romney`s foreign policy message never
made a lot of sense because on the specifics, there was not much difference
with Obama. His message essentially seemed to be, I`m going to talk
tougher. I`m somehow going to twist Putin`s arm a little bit harder.

So, it was very much tonal. It was very much this machismo. I`ll
never apologize. I`ll be stronger.

But there was no there there. There was nothing really to it. So
that was a good example of it, kind of having to cook up this idea that
Obama, you know, was an apologist and accepting American decline.

It wasn`t really true. He ginned it up.

That`s why he was so obsessed with Benghazi, because that was really,
he had nothing else. And even Benghazi, of course, was overblown.

MATTHEWS: Let`s take a look at this. This is an ad by the super PAC
supporting President Obama was also singled out by "PolitiFact" for being
false. It was a devastating but powerful ad that left the impression that
Mitt Romney and Bain Capital had the responsibility for a woman`s death.
Let`s listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: When Mitt Romney and Bain closed the plant, I
lost my health care and my family lost their health care. And a short time
after that, my wife became ill.

I don`t know how long she was sick. And I think maybe she didn`t say
anything because she knew that we couldn`t afford the insurance.

And then one day, she became ill and then I took her up to the
Jackson County Hospital and admitted her for pneumonia and that`s when they
found the cancer. And by then, it was stage four. There was nothing they
could do for her. And she passed away in 22 days.

I do not think Mitt Romney realizes what he`s done to anyone. And I
-- furthermore, I do not think Mitt Romney is concerned.

(END VIDEO CLIP)

MATTHEWS: Over the top, Jon?

ALLEN: I mean, it`s a very tragic story. It`s easy to feel for this
guy. But Mitt Romney had nothing to do with -- certainly didn`t have
anything to do with his wife getting cancer. Certainly, didn`t have
anything to do with her dying.

And, you know, this is one of those super PACs, Democrats were so
angry about new money coming in, these super PACs. And then they go ahead
and raise money for these guys at Priorities USA and they come out with an
ad like this. But I think if it was run on the other side saying Obama had
killed people with his health care plan, you`d hear the cry about death
panels and, you know, black helicopter crowds.

MATTHEWS: And you don`t have the president coming out saying I paid
for this ad because he didn`t even look at it.

Anyway, and the winner of "PolitiFact`s" lie of the year comes from
the Romney campaign and it`s an ad that basically said President Obama was
responsible for jobs, Jeep jobs, being sent over to China, something that
never happened. Here`s part of it. Let`s listen.

(BEGIN VIDEO CLIP)

AD NARRATOR: Obama took G.M. and Chrysler into bankruptcy and sold
Chrysler to Italians who were going to build Jeeps in China. Mitt Romney
will fight for every American job.

ROMNEY: I`m Mitt Romney and I approve this message.

(END VIDEO CLIP)

MATTHEWS: Of course, that`s the Jeep ad, Michael Crowley. Sometimes
these guys get caught in real time because the governor of the state and
everybody said didn`t happen.

CROWLEY: Right. Well, Chris, this is one of those wonderful
examples where something can be factually accurate and still a complete
lie. In other words, the language in that ad I believe stands up, that
Chrysler was going to begin again making Jeeps in China.

MATTHEWS: For Chinese.

CROWLEY: Right. Right. For Chinese -- it made perfect sense. A
lot of auto-companies do this. They weren`t going to be moving jobs from
the U.S. to China. But, obviously, that`s the clear implication of the ad.

So the fundamental message is a lie. They just covered themselves
enough with the language. Maybe they thought they wouldn`t get called out
on it.

I think this ended up back firing on them. They were desperate at
that point. They were desperate to win Ohio. I think it was actually a
net loss. They got killed as you say, and it backfired.

MATTHEWS: I think it`s one of those things like voter suppression,
it worked the other -- whiplash against it.

Thank you so much, Michael Crowley. Great reporting.

Thank you, Jonathan Allen. Same deal with you.

ALLEN: Thank you, Chris.

MATTHEWS: When we return, let me finish with the ultimate triumph
this year, believe it or not, of truth.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this: Memory is a fascinating
thing. What we choose to hang onto hangs on in our mind no matter what we
choose.

If you`re like me, you remember the big ones, you remember the
president`s bad night in that first debate. Actually, that`s what I`m
trying hard to get out of my mind. It`s punishing just to think about.

You remember the oddness of watching Mitt Romney standing in front of
those rich people in Florida talking trash about the folks who can`t afford
to pay $10,000 to sit all dressed up listening to this stuff and feeling
so, so successful in life.

You remember the times that one side or the other said something in a
TV ad you knew was wrong and it bothered you? If you`re like me, you
remember that occasion when the side you often agree with said something
that just isn`t fair.

So it`s a real battle of impressions and which of them get to stay in
your head. I think the good news for the country this year is that the
side told the truth more often than the others, although not always, won
the election. And the side that said things that were dead-wrong about the
Jeep factory heading to China and the nonsense of getting rid of the work
requirement for welfare and the pathetic claim that President Obama spends
his time out there in the world apologizing lost. It really did.

And maybe, just maybe, the reason the people telling the most truth
won. And the people telling the most untruth lost. It`s for that very
reason. We were, all of us, paying attention because it really mattered.

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

"POLITICS NATION" with Al Sharpton starts right now.

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

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