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updated 1/30/2013 10:15:19 AM ET 2013-01-30T15:15:19

HARDBALL
January 29, 2013

Guests: Robert Costa, Jim Rutenberg, Andrew Kaczynski, Kevin Spacey, Joaquin Castro


CHRIS MATTHEWS, HOST: The reckoning.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

"Let Me Start" with this -- The reckoning, put up or shut up, D-day. In a
shattering moment this afternoon, President Obama threw down the gauntlet.
He demanded Congress pass a potent immigration reform bill, one that fixes
the problem of decades, deals with the 12 million people here illegally,
stops the illegal hiring and exploitation of workers.

So the challenge is out there right now, right there on tonight`s news,
packed and ready for tomorrow`s newspapers. Will it explode into action,
light a firecracker under the Republicans? Will it detonate an avalanche
of action, driving teeth into the reform, ending the perennial talk that`s
led to nothing or to the old bogus reforms of the past?

Will the politicians of this country get real, or play more of the old
games of ethnic fear, economic exploitation and wedge politics? Was today
the end of all that? Could that actually be possible?

Let`s take a first hard look with NBC`s White House correspondent Chuck
Todd. You heard all my questions. I`m older than you. I`ve been through
Simpson-Mazzoli. I know we`re laughing about...

CHUCK TODD, NBC WHITE HOUSE CORRESPONDENT/POLITICAL DIR.: No, I love...

(CROSSTALK)

MATTHEWS: We`ve been trying it all before. We`ve passed bills to say, Oh,
it`s got teeth in it, and it`s got amnesty for people who`ve been here for
a while. Is this going to work politically and substantively?

TODD: Politically I think it`s definitely going to work. Politically,
there is the tone in the immigration debate, the fact that you have
business that needs this, whether it`s agriculture, whether it`s high-tech.
Business community is demanding at Washington to do something about this,
And then you have the politics simply of the Hispanic vote and the tone of
the debate that (INAUDIBLE) So politically, this is going to happen.

MATTHEWS: What are Republicans...

TODD: I kind of doubt...

(CROSSTALK)

MATTHEWS: They control the house. What do they get out of it?

TODD: What do they get out of it? Stop having the Hispanic issue as a
wedge, to actually begin to have a conversation when the new generation of
Hispanic voters...

MATTHEWS: OK.

TODD: ... where immigration...

MATTHEWS: Like George W. tried to do.

TODD: You didn`t have -- here`s the thing. The number one issue -- you
know, Republicans always like to make this point -- Well, the number one
issue with Hispanics is not immigration. They`re right. But they`re not
listening to you. Number one -- the number one issue for suburban working
women isn`t contraception, but if you`re saying weird things like
"legitimate rape," then that voting bloc isn`t going to listen to you on
education, on taxes, on any of this stuff.

That`s what`s going on with the Hispanic...

MATTHEWS: OK, is the Republican...

TODD: So that`s the issue there.

(LAUGHTER)

MATTHEWS: ... politically. What do Democrats get out of it? Why are they
pushing it?

TODD: Well, Hispanics have been demanding something on this, and at some
point...

MATTHEWS: But do they want the teeth, the tough requirements of worker
verification? Do they want all the tough part of the bill?

TODD: I think that there are -- yes, because if you actually go to places
like Arizona and New Mexico and you`ve -- and I`ve seen surveys of Hispanic
Americans, Hispanic American citizens, who third -- you know, say second,
third and fourth generation (INAUDIBLE) Wait a minute. I did it legally.
These folks should have to do it legally. So...

MATTHEWS: OK...

TODD: No, I think that there is a -- and this idea that...

MATTHEWS: I just don`t hear...

(CROSSTALK)

MATTHEWS: I don`t hear that from the Latino groups.

TODD: ... or they want it easy. No, they just -- they...

MATTHEWS: OK, I don`t hear the interest groups pushing for real teeth.
Anyway, let`s take a look at the president`s...

TODD: You`re right, interest groups aren`t. I`m talking about rank and
file Hispanic Americans.

MATTHEWS: Well, that`s very positive. Anyway, let`s look at what he had
to say today. He came out for what he calls comprehensive immigration
reform. It was in a speech in Las Vegas this afternoon. He said the
bipartisan plan put forward by eight senators was in line with the
principles he`s for, which is very interesting -- bipartisan approach.
Let`s listen. Here he is.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But the principles are
pretty straightforward. First, I believe we need to stay focused on
enforcement. That means continuing to strengthen security at our borders.
It means cracking down more forcefully on businesses that knowingly hire
undocumented workers.

We need to implement a national system that allows businesses to quickly
and accurately verify someone`s employment status.

Second, we have to deal with the 11 million individuals who are here
illegally. Now, we all agree that these men and women should have to earn
their way to citizenship. But for comprehensive immigration reform to
work, it must be clear from the outset that there is a pathway to
citizenship.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: OK. Your work, your strength is in politics. He went to an
Hispanic -- a largely Hispanic high school out in Las Vegas...

TODD: You wouldn`t know that by that...

MATTHEWS: Well, the applauded all the positive...

(CROSSTALK)

MATTHEWS: They didn`t applause (SIC) any of the enforcement stuff. But
you`re pointing out the flags. What do they say?

TODD: I think, visually -- you know, what`s amazing, you know, and --
politics is a visual game sometimes, and you know, what message is someone
trying to say if you turn the sound down? I guess the president is
patriotic. He`s sitting in front of American flags. Beyond that, I have
no idea...

MATTHEWS: Would it have been better if we could have seen the young
Hispanic high school kids?

TODD: I think it would be. I think that that`s what this is about, right?
This is about particular a younger generation of Hispanics who -- why are
they coming to America? They`re coming to America for the -- you know, for
all of the right reasons that we want America to be...

MATTHEWS: Yes, I know.

TODD: ... the shining city on the hill, particularly in...

MATTHEWS: OK, let`s talk about the key guy here...

(CROSSTALK)

MATTHEWS: ... besides the president, who`s always the key guy. Here`s
Marco Rubio. I think he may have split ambitions because if he does it
right with the eight senators, the four Democrats, the four Republicans,
and they coalesce with the president, the president will get credit. He
may be willing to share the headline here. Here he is. He spoke to Rush
Limbaugh today. This is Marco Rubio of Florida. Here he is.

(BEGIN VIDEO CLIP)

SEN. MARCO RUBIO (R), FLORIDA: I know this is a tough issue. I do. I
know why people are uncomfortable about it. It doesn`t feel right to -- in
some instances to, you know, allow people who have come here undocumented
to be able to stay. I know that for some people, they`re uncomfortable
with that notion. This is a tough issue to work through.

I think this is a significant challenge that we face. I know the president
is going to take us in a direction that I would not be comfortable with and
I don`t think it`s good for America. I`m just trying to do the best I can
with what`s already a tough situation.

(END VIDEO CLIP)

MATTHEWS: Well, he`s probably the only guest on Rush Limbaugh`s show ever
to say "undocumented workers," rather than "aliens," which is Limbaugh`s
favorite.

Anyway, Limbaugh questioned the motives of immigrants today coming to the
country illegally. Listen to how he looked at it.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: I have seen a number of research,
scholarly research data, which says that vast majority of arriving
immigrants today come here because they believe that government is the
source of prosperity, and that`s what they support. It`s not about
conservative principles, and so forth, not the way it used to be.

RUBIO: Look, I don`t know. I don`t have -- I`m not a -- I haven`t done a
scholarly study on the makeup. I can only tell you about the people I
interact with. And I can tell you that the folks I interact with, once
they get into this country and they start to work and they open up their
own business, they start to understand the cost of big government.

(END VIDEO CLIP)

MATTHEWS: You know, there`s such a thing in politics and public affairs
and commentary -- it`s a lie. And what he just said was a lie. If you
look at any road gang in America out there working on the roads, Hispanics
(INAUDIBLE) if you go to all the guys doing housing, roofing, guys doing
lawns, guys doing sophisticated, hard, you know, craftsman work in this
country, all over the burbs, all over the country, Beverly Hills, Chevy
Chase, anywhere you go, they`re all Spanish-speaking. And the idea they
all came here for welfare checks...

TODD: No.

MATTHEWS: Where`d he get...

TODD: You know what almost all...

MATTHEWS: Where`s he get this stuff from?

TODD: You know how many of them send money -- they come here to earn
money...

MATTHEWS: (INAUDIBLE) crafts job!

TODD: ... to send it back.

MATTHEWS: Right.

TODD: By the way, to take that money, and they`re sending, say, half of it
-- they live on what they have to, and they`re sending it back to try to
support family...

MATTHEWS: I don`t think -- I don`t think Hispanics are big on government
anyway. I think they`re trying to get away from lousy governments, most of
them.

TODD: But honestly, every immigrant group -- and I`ve studied this, and
you have, too, over 200 years in this country, it`s been the same thing.
You know, during the -- Garfield`s election -- I love to bring this up.
During James Garfield`s election, the state of California almost -- you
know, was teetering on the edge over the issue of illegal Chinese
immigration.

You know, we go through this as a society. We have these issues. But
every immigrant population that`s come to the United States has come here
for the same reason, looking for work! That`s all!

MATTHEWS: They`re...

TODD: For work!

MATTHEWS: The Chinese were the most crime-free community in history,
anyway. They don`t cause anybody any trouble.

Anyway, thank you, Chuck Todd.

Let`s turn now to somebody who knows. He`s a member of Congress from that
part of the country, right down near the border, Joaquin Castro, Democrat
from Texas.

Sir, this is HARDBALL, and we`re talking about whether they`re going to
get, A, bill that passes both houses, one of which is controlled by
Republicans, one controlled by the Senate -- the one you work in happens to
be -- well, you`re a minority members.

Do you think the majority led by people like, well, John Boehner and Cantor
are actually going to put their fingers on an immigration bill and pass it?

REP. JOAQUIN CASTRO (D), TEXAS: I think they will, Chris, and I hope they
will. I think, especially with the November election, the American people
made it clear, I believe, that they want the Congress and they want the
president to tackle this issue and to finally get it done.

I think what we`ve seen in the last few days is very promising, first with
the Senate proposal and now the president`s proposal. At least we know
we`re having a serious discussion about it, and we`re more or less on the
same field.

MATTHEWS: I like Schumer -- I`ve always liked him politically, and Rubio,
the fact that he`s with them, with Lindsey Graham and John McCain -- I
respect them all, given who they are. They`re all different politics, but
I do respect them, their integrity.

And my -- are you surprised that Rubio, who`s obviously gunning for the
presidency, has been able to make a deal with someone like Chuck Schumer of
New York, who`s a liberal? Is this something that can be done now across
the country, liberal/conservative compromise with teeth, and also with
something for people who have been here a long time and want to become
American?

CASTRO: Well, there`s no question. You know, it`s a wonderful turn of
events, especially because of all the stalemates on a number of issues
we`ve had in Washington over the last few years. And so I was a bit
surprised to see all eight of them standing up there at the podium, locked
in arms, coming out with this bipartisan proposal. So I think it bodes
well for the issue.

MATTHEWS: Do you think we`re going to get to the point, if this thing`s in
effect, or something like it, in the next couple of years, where we won`t
be embarrassed by people racing across the border down the Arizona line,
the Texas line, where people are racing for their life to get jobs? I know
their motives are good. They need a job. But the idea of a country where
you race across fences and sneak in, you have to come in illegally- is that
going to ever stop, do you think? I know it`s petered down because of the
economy.

Will we be able to have people come in, turn over their ID cards, become
either guest workers or applicants for long-term stays here, where it`s
actually done like a modern society ought to operate?

CASTRO: I hope that we can get to that point. You know, as you and Chuck
were talking about, these folks who come over, 90-something percent of them
come with the best of intentions. They want to work. They want to support
their families.

And quite frankly, Chris, these are folks that are desperate people,
oftentimes whose kids are starving, don`t have much to eat. They`re not
able to make a living in Mexico or another country where they`re from. And
so they come to the United States in the same spirit that the Irish and the
Germans and the Italians came, and that is for opportunity. And it`s not
to get rich, it`s an opportunity just to survive.

MATTHEWS: Let me ask you about guest workers. It`s always been a tricky
thing because in the old days of Nixon and all, they said Brasseros (ph),
it had a negative connotation.

TODD: Right.

MATTHEWS: Is part of the answer temporary workers that come up here for
the season, they may work in agriculture, make a bundle of money by their
standards, head back with it to their families? That way you don`t have --
you don`t combine working with immigration in every situation.

Are you happy with that, or does that seem discriminatory to you? How do
you react to it?

CASTRO: Well, I think -- and you see in both proposals this path to
citizenship. I think that path to citizenship should be available for
undocumented immigrants. You know, there should be an option, I think, or
there could be an option for them to have temporary worker status, if
they`re choosing not to become residents or citizens.

But you know, when you think about the dreamers and other folks who are not
-- you know, kids who are dreamers but are -- maybe have been here 10 or 15
years and paid taxes and essentially have lived out many years as
Americans, we should give them a path to citizenship.

MATTHEWS: You know, the hardest thing about this is trust. The
conservatives -- and you know it better than I do, you represent people
down there in that part of the country, where it`s a touchy issue. A lot
of the conservatives will say, yes, I want enforcement first. I want that
border sealed up, and then we`ll talk about amnesty or whatever we`re going
to call it.

CASTRO: Right.

MATTHEWS: Long-term path to citizenship. And then you -- Wait a minute.
If you do that, if you seal up the border right now, and, which is maybe
not the most important thing, you insist on e-verify right now really
working -- you can`t work in this country unless you`re here legally --
what happens to the 12 million people in the meantime? They can`t work.
In other words, it`s the chicken and the egg problem.

How do you get to a better world in this country step by step in a way that
conservatives will go along with, middle of the roaders, and liberals who
really want to see something done in terms of helping the people here? How
do you stop the illegal action in the meantime? I mean, I don`t know how
you -- tell me what you think about the sequence because I think it`s going
to be a hot part of this issue, what comes first.

CASTRO: Sure. No, and I think you`re right, you know? And the argument
that you`ve had mostly from folks on the right is, Look, we can`t create
any guest worker program or a path to citizenship until we secure the
border. And that argument has a lot of resonance, but we`ve got to
consider the moment that we`re in.

It`s a fact that this president has committed more resources to the border
than any president in American history. Chris, in 2004, when President
Bush was reelected, there were 10,000 border patrol agents on the border.
Today there are more than 21,000. There are 652 miles of border barriers,
including fencing, along the border. So this president has committed not
only money but also manpower to securing the border.

If we`re going to hold this thing up, a path to citizenship, until we
secure the border, then we`ve got to have objective measures about what
that means because I promise you, if you put Rick Perry and Jan Brewer on
that Southwestern commission to determine when the border has been secured,
they`re never going to approve it because it`s not in their political
interest to approve it. So we`ve got to be very careful if we operate in
phases.

MATTHEWS: Be interesting how we do this. Anyway -- I hope it works. We
tried it before with Simpson-Mazzoli back in the `80s. It didn`t get
enforced. I think you need enforcement plus the opportunity for
citizenship. I think we all agree on the elements. It`s putting this
thing together I think will matter, as you pointed out.

It`s great to have you on, by the way, Congressman.

CASTRO: Thank you.

MATTHEWS: Your brother is great, too. Your brother`s very good.

CASTRO: Thank you.

MATTHEWS: He had a -- he gave a great speech at the convention, Julio --
anyway -- Julian.

Well, coming up: Civil war in the Republican Party. One side says only a
moderate, sensible GOP will ever be able to compete in the Northeast or the
Midwest of this country. On the other side are wingers like Glenn Beck,
who celebrate the death of the establishment wing of the Republican Party
with cake and confetti, and I think a dead body.

Plus, who`s behind the strange alliance of neocons and gays trying to kill
Chuck Hagel`s nomination for defense secretary? We`re going to get into
that one. That`s a favorite of mine. Among those opposing Hagel is a
shadowy group out there that says it`s pro-gay but buys its ad through a
top Republican firm.

And "Argo," "Lincoln," "The Good Wife," "Veep" -- there`s no denying that
movies and shows about politics are suddenly hot. The great Kevin Spacey
sits in this chair in a few minutes. He`s got a new political show called
"House of Cards." It reminds me of what might have happened if John Kerry
had not been made secretary of state.

Finally, "Let Me Finish" tonight with Kerry`s confirmation -- it happened
just an hour ago -- as secretary of state, and Thursday`s hearing for Chuck
Hagel as secretary of defense. I support both of them.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: As I mentioned John Kerry has now been confirmed by the United
States Senate. Happened late this afternoon. He`s the next secretary of
state. In fact, he is secretary of state. The vote was 94 to 3. The only
no votes came from both from Texas senators, John Cornyn and Ted Cruz, also
and Oklahoma`s James Inhofe. What a trio that is.

Anyway, earlier today, the Senate Foreign Relations Committee, which Kerry
chaired for the past four years, voted for him unanimously.

Well, today -- actually, tomorrow, Massachusetts Governor Deval Patrick is
expected to name Kerry`s replacement to the Senate. That`ll be a big
headline in Massachusetts and around the country, the new senator from
Massachusetts.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. For months now, we`ve been watching
the growing gap between the establishment Republican Party and the Tea
Party wings of that party. The Tea Party types are now the party`s
dominant force, of course. They have little use for establishment
Republicans who preach moderation and compromise.

Well, here`s what David Brooks wrote in "The New York Times" today. Quote,
"It`s probably futile to try to change current Republicans. It`s smarter
to build a new wing of the Republican Party, one that can compete in the
Northeast and mid-Atlantic states, in the upper Midwest, along the West
Coast, as well. It could be filled with people who recoiled at President
Obama`s second inaugural address because of its excessive faith in
centralized power, but who don`t share the absolute anti-government story
of the current GOP. Would a coastal and Midwestern GOP sit easily with the
Southern and Western one? No. But majority parties are usually coalitions
of the incompatible. This is really the only chance Republicans have. The
answer is it`s going to be -- the only way to build a second GOP," and that
is the answer (ph).

Anyway, good question for my two guests, both excellent. On the center
right, Michael Steele is former chair of the Republican Party, now an MSNBC
contributor, and Bob Costa, Washington editor for the great "National
Review."

Gentlemen, you`re reasonable men. The Democratic Party for years was an
unbelievably absurd coalition, Northern liberals, minorities where they
were able to vote in that part of the country, Southern segregationists,
and then they all put together (ph) together for -- for like Adlai
Stevenson even, and certainly for Roosevelt and Harry Truman and all the
rest, and Wilson.

Can the Republican Party rebuild itself to get a majority by building a
coalition where they don`t all agree with each other, where you have the
soddy-busters, the rural people, plus the more, if you will -- this will
drive people crazy -- sophisticated suburbanites.

MICHAEL STEELE, MSNBC POLITICAL ANALYST: Sophisticated suburbanites.

Yes, I think they absolutely can. And for going back to my days as a
county chairman in Prince George`s County, Maryland, to being national
chairman, I preached that same thing. Northeastern Republicans are not
Southern Republicans aren`t Midwestern Republicans aren`t Western
Republicans. They all wear a different hat. But they wear them in their
own style.

MATTHEWS: You mean all politics is local.

STEELE: All politics is local, and I think the more the party recognizes
that this is not about a national Republican Party, but a coalition of
independent-minded individuals who happen to be Republican in some cases,
you might say...

MATTHEWS: What about all those moderates that are told they can join the
party and be part of the coalition? You know, that`s nice, Bob, but if
they`re not pro-life, if they`re not against gay marriage, if they don`t
buckle to the rural Republican Party, the Tea Party point of view, they
ain`t ever going to be on the national ticket. So, why would they join a
party that wouldn`t accept them as a member, and certainly not as a leader?

ROBERT COSTA, "NATIONAL REVIEW": It`s a fair question.

It`s something the Republicans are going to have to grapple with over the
next few years.

MATTHEWS: Well, how do you grapple with it? You`re here.

COSTA: But you and I both grew up in the Philadelphia suburbs. My big
question is, is the party going to elevate leaders who come from the
Northeast?

Is a Chris Christie, for example, going to be able to be a true national
voice in leading the party in the coming years, or is it just going to be
Republicans from other parts of the country...

(CROSSTALK)

MATTHEWS: Well, wait a minute. I know the answer because we had governors
like Tom Ridge, a war veteran, combat veteran in Vietnam, worked his way
through Harvard, admirable person.

STEELE: Right.

MATTHEWS: He wasn`t right on abortion rights. So, he ain`t going anywhere
nationally, because Cheney zapped him when he went up for V.P.

So, the guys -- you name me a guy. Now, of course, Christie is OK because
he`s pro-life supposedly, but all the other guys in the Northeast aren`t.
So they`re not eligible.

COSTA: It`s a fair point.

MATTHEWS: I know. I keep making fair points. You have got to answer
them.

(LAUGHTER)

(CROSSTALK)

COSTA: "National Review" had a big summit over the weekend in Washington.
We had a lot different people come and speak, pro-choice people, pro-life
people.

Social issues, economic issues, Republicans are grappling with all these
issues. And you have got to talk about taxes. Where are Republicans going
to be open on revenue, on gay marriage, and on abortion? Are
Republicans...

MATTHEWS: What`s the answer?

COSTA: The answer is unsure.

(CROSSTALK)

MATTHEWS: OK. Let`s take a look at it`s.

(CROSSTALK)

MATTHEWS: Here is Bobby Jindal, who has really got an ambition going.
This guy is burning down here. He took on his own party last week at an
RNC meeting when he said it was time for the stupid party -- that stupid
party talk to end. Let`s listen.

(BEGIN VIDEO CLIP)

GOV. BOBBY JINDAL (R), LOUISIANA: We have got to stop being the stupid
party.

(LAUGHTER)

JINDAL: I`m serious. It`s time for a new Republican Party that talks like
adults. It`s time for us to articulate our plans and our visions for
America in real terms.

It`s no secret we had a number of Republicans that damaged the brand this
year with offensive and bizarre comments. I`m here to say we have had
enough of that.

(END VIDEO CLIP)

MATTHEWS: Mourdock and Akin he was talking about.

(CROSSTALK)

MATTHEWS: But, anyway, last night, Karl Rove, who is now, by the way, an
umpire, he agreed with Jindal and said Republicans must have more than an
anti-Obama message. Let`s listen to the oracle, the architect, Karl Rove.

(BEGIN VIDEO CLIP)

KARL ROVE, FORMER SENIOR ADVISER TO PRESIDENT GEORGE W. BUSH: I think he`s
right. He was talking about Todd Akin of Missouri and Richard Mourdock of
Indiana and their terrible comments on abortions.

The Republican can`t simply be in mindless opposition to Barack Obama. It
has to offer a vision of the future that is attractive and compelling for
Americans to associate with.

(END VIDEO CLIP)

MATTHEWS: Well, the problem is that the vision Jindal and Rove are talking
about hasn`t changed. Only their messaging has.

While Jindal talks a good game, Paul Krugman of "The New York Times"
pointed out yesterday that Jindal is proposing eliminating Louisiana`s
incomes tax, which is paid primarily by the wealthy, and replacing it with
a sales tax designed to hit the poor and the working poor the hardest.

Now, when you start going through regressive taxes if you`re a Republican,
you`re doing the same old Hoover stuff, tax the people that get hit the
hardest by economic recession and exempt the top people who make incomes,
big incomes.

STEELE: Well, but that`s not necessarily been borne out in states like
Texas and New Hampshire and elsewhere that don`t have a state income tax,
that do have a higher sales tax. So, you know, I get the...

MATTHEWS: If you have a lot of tourism.

STEELE: I get the partisan line that you want. And I think Louisiana has
a bit of tourism.

So the fact of the matter is, you know, Bobby Jindal represents, I think,
as Susana Martinez does and others...

MATTHEWS: Yes, OK.

STEELE: ... this next generation of Republican leaders out there who are
doing it. They`re creating...

(CROSSTALK)

COSTA: But listen to Jindal`s message.

STEELE: They`re creating the laboratory in the states, which is why I go
back to my point that this is not about a national messaging. This is
finding and accepting Republicans where they are.

MATTHEWS: So, you buy this as an intellectual who writes for "The National
Review," which is intellectual? You buy the fact that the Republican Party
can become a coalition party, not a homogeneous right-wing party?

COSTA: I think the Republican Party...

MATTHEWS: Can you answer that question yes or no?

COSTA: Yes. I think the Republican Party can succeed.

But if you listen to Bobby Jindal`s speech, he`s asking a big question.
Too often, he says, the party is becoming a fiscal conservative party.
It`s talking too much about budgets. He`s saying Republicans aren`t going
to back away on their position on taxes. Talk more about growth, more
about tax cuts, less about austerity.

MATTHEWS: OK. One way to kill prosperity, by the way, is tax people for
what they spend. That`s the dumbest thing in the world. Raise the sales
tax, so if you save your little money, you keep it in your pocketbook,
right, you have more money.

(CROSSTALK)

MATTHEWS: If you tax spending, you`re bringing down consumption.

Anyway, let`s take a look at -- here is Jindal and Chris Christie and Marco
Rubio, who are thinking about bringing the party together at least, and
then there`s this. Take a look at Glenn Beck. He is dressed as a doctor
here pronouncing the Republican establishment dead.

Let`s watch Glenn Beck.

(BEGIN VIDEO CLIP)

GLENN BECK, RADIO TALK SHOW HOST: Here is what the media and the president
still don`t understand. We`re celebrating the death of the establishment
GOP right along with them. Yes.

I have got a cake and hats and, like, party streamers and everything today,
because they`re dead. The GOP hasn`t stuck to its guns or its policies or
its principles in I don`t know how long.

All they are -- all they are is about winning. Who should be in the tent?
We need a bigger tent. That`s the wrong angle. While the elephant may be
dying -- and it`s not dying -- it`s dead -- what isn`t dying in America is
personal responsibility.

(END VIDEO CLIP)

MATTHEWS: Is he part of your crowd, Glenn Beck? Is he part of the
Republican big tent, that guy, that train wreck?

STEELE: If he wants to -- look, see, I`m not going to make a judgment on
what brings and motivates people to join the party.

MATTHEWS: But is he in or out?

STEELE: I don`t know. I don`t get to make that judgment.

MATTHEWS: OK.

STEELE: He gets to make that decision for himself. And if he wants to
pronounce the party as dead, that`s fine for him. I would have my issues.

(CROSSTALK)

COSTA: But you are hearing this from a lot of conservatives.

STEELE: Right.

COSTA: They`re happy the party is struggling.

MATTHEWS: Do you like him?

COSTA: Not like Glenn Beck, but they want to see a revival.

MATTHEWS: OK. I don`t like him. I don`t know how to make an answer work.
No, I don`t like him. Anyway...

STEELE: Well, that`s you. But that`s your...

(CROSSTALK)

MATTHEWS: That`s right. But you won`t answer the question.

STEELE: I did answer the question.

MATTHEWS: Is he part of your party or not?

STEELE: What is his party registration? I don`t know.

COSTA: He seems like he doesn`t even want to be a part of the party.

(CROSSTALK)

STEELE: He doesn`t want to be a part of it.

(CROSSTALK)

MATTHEWS: Who did he vote for? Mitt Romney or Obama?

STEELE: You have to ask him. I don`t know.

MATTHEWS: OK. I think I know. I think he voted for Mitt Romney. If he
didn`t, call me up.

Anyway, Michael...

COSTA: Pretty good guess.

MATTHEWS: Pretty good guess. Good answer, finally.

Robert Costa with "The National Review," the once proud "National Journal."

COSTA: Always proud.

MATTHEWS: Up next: Who is Ted Cruz to criticize John Kerry and Chuck
Hagel`s dedication to the military, when Cruz never even saw a uniform
close up?

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL.

First up: Texas senator Ted Cruz is pushing the idea that if President
Obama supports something, it means a weaker America. Well, he`s talking
about the nominations of John Kerry and Chuck Hagel.

Here is Cruz speaking at an event put on by the conservative National
Review Institute over the weekend.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), TEXAS: OK. We have got two pending nominations, John
Kerry, Chuck Hagel, both of whom are very prominently anti-us, less than
ardent fans of the U.S. military.

My view of the military and foreign policy is exactly that of Reagan`s,
that it should be driven by the national security interests of the United
States, that we should go in with clear, defined objectives, overwhelming
force, and then, when we`re done, get the heck out.

(END VIDEO CLIP)

MATTHEWS: Does anyone believe Paul Ryan would have taken us into a hawkish
war like Iraq?

Oh, by the way, John Kerry and Chuck Hagel aren`t fans of the U.S.
military? Oh? Someone remind the president -- or remind the senator from
Texas that both Hagel and Kerry volunteered to serve in Vietnam and have
been awarded five Purple Hearts between them. Senator Cruz has no
experience personally in the U.S. military and, as I said earlier, was one
of the three senators who voted against confirming John Kerry earlier
today.

Also, Hillary Clinton unites -- or reunites with Australian comedy duo
Hamish and Andy. She first met them back in 2010 during a visit to
Australia and today they popped up at what`s being called a global town
interview, or townterview, with the secretary of state.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Madam Secretary, obviously, a lot of good questions we
had were taken earlier tonight by some of the wonderful participants around
the world, but, luckily, we still have a few.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: Probably, the big question on everyone`s lips is when
you step back from being secretary of state...

UNIDENTIFIED MALE: Well, she won`t be able to be called Madam Secretary.

UNIDENTIFIED MALE: No longer Madam Secretary.

I think on behalf of all the global citizens joining the town hall meeting
tonight, which of these three names would you like to adopt?

UNIDENTIFIED MALE: We spent three or four months on this.

UNIDENTIFIED MALE: The incredible Hillary? The artist formerly known as
the secretary? Or just Hill Clinton? But it does sound a bit like your
husband.

UNIDENTIFIED MALE: Yes.

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: Yes. I think we`re going
to have to work on that list.

(LAUGHTER)

UNIDENTIFIED MALE: None.

UNIDENTIFIED MALE: None. OK.

UNIDENTIFIED MALE: We will need another four or five months then.

(END VIDEO CLIP)

MATTHEWS: Well, Secretary Clinton took questions from young people around
the world over the course of that event.

Up next: a strange alliance of neocons and gay groups trying to kill Chuck
Hagel`s nomination later this week. That`s ahead, and you`re watching
HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MARY THOMPSON, CNBC CORRESPONDENT: I`m Mary Thompson with your CNBC
"Market Wrap."

Another winning session for stocks. The Dow rises 72 points, within
striking distance of the 14000 level. The S&P finishes up seven, now above
1500, and the Nasdaq ends flat.

Investors are shifting their focus to the Federal Reserve. Its decision on
interest rates comes tomorrow. And Amazon shares are higher after hours,
despite sliding initially. The company`s earnings were weaker than
expected, but revenue was up strongly.

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

MATTHEWS: Welcome back to HARDBALL.

After New York Senator Chuck Schumer gave his blessing to the nomination of
Chuck Hagel for defense secretary, his path to confirmation was essentially
cleared. But the hawks who oppose Hagel have only dug in deeper. And the
latest evidence comes from a newly created anti-Hagel group called Use Your
Mandate, a group that has no Web site, an address that exists only as a
P.O. Box and anonymous backers who have claimed to be Obama allies.

Here is their anti-Hagel ad. It`s been on TV. Let`s watch it.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Chuck Hagel, he`s been nominated to be secretary of defense, and
President Obama nominated him with the best of intentions. But it`s still
a bad choice.

Hagel is anti-woman, anti-choice, anti-Israel, anti-gay, and pro-assault
weapon. That`s just not what we voted for in November. Chuck Hagel
doesn`t share our values. There are other people who can do the job. Why
do we need someone like this? We don`t. Urge your senator to vote no on
Hagel.

(END VIDEO CLIP)

MATTHEWS: So why are the anti-Hagel backers and the group Use Your Mandate
so shy? Well, a source close to the group told Huffington Post -- quote --
"Those involved are choosing to stay anonymous because they`re allies with
the Obama administration and hesitant to criticize the president publicly,
for fear of retribution or pressure from the White House."

The source characterized members as a concerned group of people who have
some questions about Chuck Hagel, including individuals who have fought for
LGBT rights for a long time.

Oh, really? Well, that just doesn`t sound right to a lot of people,
including many reporters and our own Rachel Maddow. Let`s listen to
Rachel.

(BEGIN VIDEO CLIP)

RACHEL MADDOW, HOST, "THE RACHEL MADDOW SHOW": More probably, they`re
asserting that there`s some kind of broad Democrat opposition to Chuck
Hagel. We`re just not allowed to know who it is.

I`m not buying it. I call bull-pucky. I say it`s even money that this is
the right running ads against Hagel while pretending to be the left. I
might be wrong, but I call bull-pucky. And if I am wrong, there`s an easy
way to prove it. Come out, come out, whoever you are.

(END VIDEO CLIP)

MATTHEWS: God, Rachel as smoky.

Anyway, joining me right now, two reporters who have done the legwork to
investigate just who is behind this group and what they might be up to, is
the great Jim Rutenberg of "New York Times" and Andrew Kaczynski of
BuzzFeed.

Jim, thank you.

I know you don`t do much television. I appreciate you coming on tonight.

And I was curious when I saw some of those Log Cabin ads. I know Log Cabin
is not a well-funded organization. It`s gay Republicans. They have been
on the show. They will be on forever on this program, but they seem to
have an enormous amount of money to pay for a "New York Times" ad at one
point. I said, well, where is that all money coming from?

It`s apparently -- I don`t know if you know this part of your newspaper,
but it`s $140,000 to put one of those full-page ads in. And I said, well,
that`s interesting. Somebody is -- somebody is feeding them from the
backroom.

What`s going on here? Are these hawks, neocons, so-called, people that
just want to go to war, they don`t like Hagel`s geopolitics? Is that what
is going on here?

JIM RUTENBERG, "THE NEW YORK TIMES": Well, there are definitely hawks who
don`t like his politics who say -- who are out in the open saying we don`t
want this to go forward.

But then there are people in the shadows who are giving a lot of money for
these ads who don`t say who they are, so we`re only left to speculate.

MATTHEWS: You were able in your reporting to come across the ad group --
rather, the group that makes the ads, which is a Republican group. There`s
also a group called the Emergency Committee, whatever it is, for Israel.
They -- that`s two pieces, one partisan, one ideological, to tell you where
they`re coming from, right?

RUTENBERG: Yes. And they happen to share the same firm to buy their
media. So, these are the firms that kind of put television ads on the air.

And some of these firms are partisan. And it so happens that the group
they use, Smart Media, actually an arm of Smart Media, is a Republican
group. They buy for Republicans and Republicans only more or less.

MATTHEWS: Well, let me be the most naive person in the history of
television, Andrew, and ask you why don`t they come out and say who they
are and why they`re opposing this guy?

ANDREW KACZYNSKI, BUZZFEED: Well, I think in "the Huffington Post" report
they said they`re gay rights Democrats --

MATTHEWS: OK.

KACZYNKSI: But --

MATTHEWS: HRC, a group I have worked with for years, almost two decades,
is with them. They accept the man`s change of heart as part of the
country`s change of heart about gay rights and certainly marriage equality
and who are these people that stay in the shadows and say they have a
problem with his positions on guns, on Israel, on gay rights, on
everything? It just seems like quite a potpourri and, therefore,
suspicious I think.

KACZYNSKI: I mean, you look at the list of groups that would oppose Chuck
Hagel who are gay rights groups who would be willing to spend hundreds of
thousands of dollars, who don`t want to alienate the White House, and you
think maybe the list is down here. You think of conservatives who are
willing to do that, and the list is a little bit higher.

So, I mean, I think the point is, people are spending hundreds of thousands
of dollars. We don`t know who it is. I mean, they`re saying they`re gay
rights Democrats but the fact they use a media firm with ties to the RNC,
the NRCC, the RGA, Christine O`Donnell, and -- I mean, it`s very sketchy.

I mean, I think people want to spend all this money to oppose Chuck Hagel,
that`s fine. But the fact we don`t know who it is, is a little
disconcerting.

MATTHEWS: Well, here is a statement from a friend of mine, Chad Griffin,
he`s president of the Human Rights Campaign, one of the largest gay groups
in the country, rights groups. He was conciliatory after Hagel apologized
for his anti comments of years ago.

Here`s what Chad said: "Senator Hagel`s apology and his statement of
support for LGBT equality is appreciated and shows just how far as a
country we`ve come when a conservative former senator from Nebraska can
have a change of heart on LGBT issues. Our community continues to add
allies to our ranks and we`re proud that Senator Hagel is one of them."

There they are talking about conciliation there, Jim. The LGBT community
and under the name there of the great organization, Human Rights Campaign,
are accepting him as an ally. Whereas these people on the shadow -- let me
get back to you because you`re a student now as a reporter of media. You
have always been a great reporter of media.

Now, how media works into politics -- are we seeing more of this subterfuge
like this, apparent subterfuge?

RUTENBERG: I think this is just the way it`s going to be unless there`s a
new law, the DISCLOSE Act in the Senate that we`re talking about that would
make -- the donors have to step forward. If that doesn`t happen, this is
the way it`s going to be done now definitely for the next few years.
Expect more of it in the next two campaigns.

MATTHEWS: People like the Koch brothers, I`ve heard them. And I don`t
know, I don`t think Adelson from the gambling business is the name, he
doesn`t mind having his name out there. But the Koch brothers believe, I
know this, that they have the right to influence American politics big time
with lots of spending, bigger promotion of certain candidates, big
opposition to people like the president, and not to have any investigation
of who they are, any exposure of their own personal or political
involvement.

Is that a reasonable thing to believe in? They can have this power without
any identity? Your -- last question to you, Andrew?

KACZYNSKI: Well, I think there are a lot of -- I mean, someone like
Sheldon Adelson or other groups, you think about -- do they mind spending
tons of money against Chuck Hagel? No. I mean, but are they going to do
it disguising as LGBT Democrats and you wonder if they`re willing to go
that far.

But, I mean, like I said, who is willing to spend hundreds of thousands of
dollars and not have their name out there who is powerful enough that they
don`t want to alienate the White House? I mean, it really -- it really, it
doesn`t -- it`s very sketchy like I said. We don`t know who is behind it.

MATTHEWS: Well, they`re not the first wolves in sheep`s clothing. Anyway,
that probably doesn`t fit but it sounds like a historic combination.

Anyway, thank you, Jim Rutenberg, sir, a great reporter for "The New York
Times".

RUTENBERG: Thank you.

MATTHEWS: And, Andrew Kaczynski, congratulations for coming on.

Just a reminder, by the way, tomorrow, Andrea Mitchell will interview the
outgoing secretary of state, what a great get for our colleague Andrea.
That`s coming up at 1:00 p.m. tomorrow here on MSNBC. We`ll be using parts
of that. But if you want to catch the whole thing, you watch Andrea at
1:00.

Up next, political movies are hot stuff right now, and when we come back,
the great Kevin Spacey is going to be here. He`s going to sit right here.
He`s got a new political show called "House of Cards", which is almost
ripped from tomorrow`s headlines if these headlines had actually occurred.
Maybe they won`t occur but his show is.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Senate Republican leader Mitch McConnell famously vowed to make
Barack Obama a one-term president. And now, McConnell finds some tough
sledding in his own bid for re-election.

A new poll by the Louisville "Courier-Journal" finds just 17 percent of
Kentucky voters, about one in six, plan to support the senator when he runs
for re-election. Not a good start, Mitch. Twice as many say they`re going
to vote against him. Again, not a good start, Senator.

And to make things worse for McConnell, Democratic groups on the left, if
there are any out there in Kentucky, are vowing to work with Tea Party
groups on the right to oust him during the Republican primary. They`re
going to double-team this guy.

Good luck there, Mitch.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL.

Anybody who watches HARDBALL knows I love politics. Another thing I love
are movies and TV shows about politics, and I can`t remember a time when
there were more great films and shows to choose from.

Look at this, "Lincoln", "Argo," all on the big screen. Sitcoms like "1600
Penn" and dramas like "Homeland", the president`s favorite on TV. What
this tells me is I`m not alone. Americans are into politics right now,
including the dramatic kind.

Now, the great Kevin Spacey has joined in with his own entry, the political
drama "House of Cards." He plays a house majority whip who has been passed
over to be secretary of state, a slight that teased up the conflict to
come. He didn`t like being treated like this.

Let`s watch.

(BEGIN VIDEO CLIP, "HOUSE OF CARDS")

KEVIN SPACEY, ACTOR: Is the president-elect running late?

UNIDENTIFIED FEMALE: No, he couldn`t make. I`ll brief him, though.

SPACEY: OK. This is the memo I`ve drafted on our Middle East policy we`ve
been developing. Now, I want to borrow from Reagan. I`d like to coin the
phrase "trickle down diplomacy."

UNIDENTIFIED FEMALE: Right. I`m going to stop you there. We`re not
nominating you for secretary of state. I know he made you a promise, but
circumstances have changed.

SPACEY: The nature of promises, Linda, is that they remain immune to
changing circumstances.

(END VIDEO CLIP)

MATTHEWS: I love that face. Joining me, the star and executive producer
of "House of Cards", Kevin Spacey.

I was thinking of John Kerry.

SPACEY: Why?

MATTHEWS: Because I thought Kerry was going to be secretary of state. And
then, Susan Rice was going to be secretary of state.

SPACEY: Right.

MATTHEWS: And I couldn`t tell where there had been some sort of intimation
from the president that he was going to get it. So when I watch that ad,
that tease there, I said, oh my God, this is going to be like wag the dog
when they knew the girl was wearing a beret before the girl was wearing a
beret. This is going to be one of those prescient bits of drama of art
proceeding life.

So, what`s this? Where`d you get this idea? I heard it`s Richard III.

SPACEY: Yes, the original book that was written by Michael Dobbs, he based
his character largely on Richard III. And I think because he was in
Margaret Thatcher`s government. He was her press secretary. And I think
when he got out of government with a bad taste in his mouth.

So, he wrote this book as a kind of revenge and based the main character on
Richard III (INAUDIBLE). And David Fincher, it was really -- it came from
David, the idea of rebooting the series to the United States. And we just
thought it would transfer incredibly well. It was a big hit series in
Britain in the 1990s. And Ian Richardson played the character. They
called him Francis Urquhart then. Now, I`m called Francis Underwood, which
means the initials are still F.U. And --

MATTHEWS: Wonderfully put. Let me ask you about inside politics. I like
the way everybody watching this show saw "Recount," where you played Ron
Klain.

SPACEY: Yes.

MATTHEWS: You played an inside guy like I used to be -- inside, not king,
not president. Those characters seem more interesting today, the ones
inside the woodwork, the guys -- the men and women who made the calls, that
hope for this, hope for that, and do have these intramurals fights going
on.

SPACEY: Look, it`s been really fascinating for me to learn. I mean, the
current majority, Kevin McCarthy, met with me, was really generous with his
time. So does Steny Hoyer, who was the minority currently in Congress.

And thinking about what it must be like to corral 218 senators to vote --

MATTHEWS: Yes.

SPACEY: -- the way you want them to is kind of crazy. Obviously, we`ve
seen in this last Congress, it isn`t that easy to do. But I`ve learned a
lot.

MATTHEWS: Where have you learned about ambition in politics? But I think
even Secretary Clinton, who`s massively admired by me and everyone else,
never talks about what she wants. She can never say, "I want to be
president," for example.

SPACEY: Right.

MATTHEWS: And you are doing a study in gross ambition. This guy wants to
get ahead, getting more people who don`t help you ahead.

SPACEY: Look, it`s interesting. I think that, you know, there have been
incredible political figures in the past who now are sort of being re-
examined. You know, like Lyndon Johnson, for example.

MATTHEWS: Yes.

SPACEY: You start looking at how people are saying, yes, he was ruthless.
But he was also a remarkably effective president in a very short number of
years. So, I think what our show is attempting to do on some level is have
that conundrum of what someone does to get something done.

It`s like watching the film "Lincoln" now. It`s fascinating that this
character who for most Americans is perhaps the most saintly of all
presidents in terms of the way he`s portrayed in history was actually doing
back door deals because he needed the votes. He wanted to win that and get
slavery abolished.

And it`s an amazing question about if someone does something that is
dastardly diabolical --

MATTHEWS: Yes.

SPACEY: -- is it worth it in the end?

MATTHEWS: What`s the combination, what`s the connection with great actors
like yourself? I`ve seen you did like (INAUDIBLE) for like three hours.

SPACEY: That was very kind you came over.

MATTHEWS: No, I thought it was worth coming across the Atlantic to see it.
The amazing ego it takes to command the stage for three hours. And a
politician like Bill Clinton who has to have that amazing self confidence.
It seems to be -- it`s not just Reagan that was acting in politics. It
seems that all politicians have a bit of dramatic ego.

SPACEY: Look, and I think some are better actors than others. Some are
not good communicators and it`s really extraordinary.

MATTHEWS: Nixon, you can see right through them.

SPACEY: Yes. And to some degree I think Clinton is probably one of the
best communicators we`ve ever had. I think to a certain degree I think
there is in the legal profession, I think in politics, I think obviously
what you do. Whenever you`re in a position where part of your job is to
convince your audience of an idea --

MATTHEWS: Yes.

SPACEY: -- that`s true from an actor`s perspective. You`re trying to get
a playwright`s idea across to an audience or --

MATTHEWS: Do you want to get -- you want to connect with my audience right
now?

SPACEY: Yes, sure.

MATTHEWS: Do you like Obama?

SPACEY: I love Obama.

MATTHEWS: OK, thank you.

Anyway, thank you, Kevin Spacey, who loves Obama. He`s got a hell of movie
coming out, 13 episodes ready to stream right now on Netflix. "House of
Cards" -- I`m telling you, this is going to be gripping. It starts Friday
February 1st. Go for it.

When we return, let me finish with John Kerry`s confirmation as secretary
of state and the upcoming Thursday hearing just two days hence on Chuck
Hagel. They`re already going out surreptitiously.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight this:

John Kerry was just confirmed as secretary of state. The decision by the
Senate left only three members voting nay. Who they are tells you a lot.
Most importantly how excellent this appointment was for the president.

One is Ted Cruz, the guy who opposes both Kerry for State and Chuck Hagel
for Defense. How interesting. Here are two people who fought for their
country, been in it as I like to say, the Vietnam War, who`ve been awarded
medals for their service. Ted Cruz was never serving in the military but
insists these two gutsy veterans don`t deserve the offices to which the
president has appointed them.

Don`t you just love these people? They don`t like the military enough to
join it. They dump on people who have served and then have the brass to
call for more wars. In fact, a regular flow of wars.

Asked the typical hawk what U.S. war looking back he thought a bad idea.
Granada, going off after Noriega, putting our Marines into Lebanon,
Somalia? My experience is they like them all. Not only that, but they are
always, as I said, ready for another. Iraq, yes. Afghanistan, yes. Iraq
again, yes. Iran, let`s go!

Why do people listen to these types? Why the knee-jerk salute every time
one of these armchair hawks itches for another conflict?

I`m glad we`ve got Kerry as secretary of state now for the same reason I`m
glad there was an Anwar Sadat, a Yitzhak Rabin and still is, a Shimon
Peres. I`m glad we had Ike in the 1950s to keep us out of Indochina and
now the disastrous Suez campaign.

I`m glad the hawks aren`t going to be able to stop Chuck Hagel, because the
people who have seen war, felt it, been in it, been hurt by it in body and
heart are the very people I want deciding on when and whether we go to
another.

And 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.
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