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updated 10/21/2013 11:00:08 AM ET 2013-10-21T15:00:08

HARDBALL
October 18, 2013
Guest: Steve McMahon, John Feehery, Josh Green, Margie Omero

CHRIS MATTHEWS, HOST: Confederacy of hate.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

"Let Me Start" tonight with this. Fight, fight, fight! That`s the
echo of this week. You hear it in every remark or grunt from the hard
angry right. They call themselves the American people, as if the majority
that voted for President Obama are some invading force of others or a group
of lesser Americans who should be credited with only three fifths of a
vote, like they were before the Civil War and the 13th Amendment made them
whole.

It`s that fight again. I once heard this older man standing at the
Robert E. Lee mansion in Virginia, calling to another to keep up the fight.
I overheard exactly what he meant. He meant the old Confederate fight
against change, the lost cause brought back in the 21st century to battle
anything marked Obama, anything that says this man was elected president of
the United States.

Now in this third battle of Bull Run -- for them, it`s Manassas Creek
-- the rebel cry and stars and bars are rejoining the cause. They speak
again of secession and nullification and all the old language leading up to
the war between the states. They cheer now openly at the thought of
ripping apart their political party -- this time, it`s the Republicans --
to free them for total war.

Alongside the battlefield where the women and children once watched,
we see the Limbaughs and the Ericksons turned out to cheerlead, the right-
wing camp followers plying their trade like the women who got their name
back in the earlier time from General Hooker.

Yes, there`s money in war, even this phony war of faux filibusters and
televised jibes at park police, a confederacy of hate.

David Corn is the Washington bureau chief for "Mother Jones" and Sam
Stein is with the HuffingtonPost.

You know, I kept thinking and watching, gentlemen -- I want to start
with you, David -- and I don`t know whether you consider (ph) him just the
name or the brand, I think is the right way to do it, the Obama brand.

They see red when they see this, the people not just from the South or
the Southwest, because even in New York state, there`s 10 or 20 percent of
people joining the Tea Party.

DAVID CORN, "MOTHER JONES," MSNBC POLITICAL ANALYST: Right. Right.

MATTHEWS: I`ve heard it the other night in New York. They`re there.
They have an attitude of anger that`s almost inexplicable, almost hard to
define. Yet when they hear Obama, that`s what they flash to.

CORN: Right.

MATTHEWS: That`s the -- that`s the sound of the guns they rush to.

CORN: We`ve been involved in a political cultural war for the last
five years, and it`s not actually abating, it`s getting worse. As Obama
continues to be president and as he racks up some policy wins, particularly
with "Obama care," it`s just driving the other side crazy.

Now, people like Jim DeMint, Heritage Action, the Tea Partiers, I`m
not sure they`re motivated exactly by hate of Obama, but they are
exploiting that. That is the fuel...

MATTHEWS: OK...

CORN: ... for their libertarian ideology, pro-business...

MATTHEWS: OK...

CORN: ... whatever it is...

MATTHEWS: You`re onto something...

CORN: ... that`s driving them.

MATTHEWS: ... there, it`s the brand. It`s what it says to them. It
barks (ph) something to them.

This thing -- the United States Senate, which I`ve always looked up to
as one of the great positions in American public life...

CORN: Being a senator.

MATTHEWS: ... being a United States senator -- he gives that up. He
could have it for life. He says, No, I want to get outside the fort. I
want to go out there and fight the enemy out there. He went out and joined
the Heritage Foundation. Nobody in past history could explain it. Why
would you give up the right to help legislate unless you`re not interested
in legislation?

CORN: Not interested. Also, there`s probably making -- he`s probably
making a lot more money. There may be...

MATTHEWS: Could be.

CORN: ... a personal angle here. But these people, you`re right,
they`re not interested in governance. They`re not interested in policy.
The Tea Party people -- this is one thing that Boehner I don`t think
Boehner has quite...

MATTHEWS: I think it`s the fight itself.

CORN: They want -- they want to disrupt. They want to fight and
disrupt. They don`t want compromises. They don`t want deals. They don`t
want policy wins. They just want to fight and destroy.

MATTHEWS: OK, Sam, respond to this. On the right, the lesson from
the government shutdown seems to be the Republican Party itself caved.
Here`s Rush Limbaugh, the cheerleader on the hard right, this week. Let`s
listen to Rush.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: I was pondering if I can ever
remember a greater political disaster in my lifetime, if I can ever
remember a time when a political party just made a decision not to exist!

(END VIDEO CLIP)

MATTHEWS: Congressman Tim Huelskamp told "The Washington Post,"
quote, "We`ll be looking for any opportunity. We took a shot at it and we
fell short. And I think we`re waiting around for another battle over
`Obama care."`

Meanwhile, conservative blogger Erick Erickson said conservatives
should pick off so-called moderates in the GOP. Quote, "The last time the
major leaders of an American political party tried to compromise their way
to power, the party broke apart, giving us the Republicans. This fight,
too, will break apart the GOP. There will not necessarily be a new party
from it, but there will be a fundamentally altered party of new faces.
Never before have the people seemed less dependent -- been less dependent
on a party apparatus to play in primaries."

I`m not sure how you`re going to answer this, Sam, but I`m fascinated
by this open statement, We`d like to break apart the Republicans, as they
once did the Whigs over the issue of secession. That was particularly,
actually, the Democratic Party came apart from that.

But this idea that our job is to basically take over and alter a major
political party, take the party of Lincoln, use the name because it`s out
there, it`s on the ballot, and turn it into some right-wing thing that`s
capable of fighting all things modern.

SAM STEIN, HUFFINGTONPOST, MSNBC CONTRIBUTOR: Well, you know, it`s --
I guess what`s remarkable for me is the bubble that this exists in. For
Rush Limbaugh to go out there and just call it a cave without any proper
context to how badly the Republican brand was being damaged in the polls,
to how ineffectual the strategy was and to how much -- honestly, how much
pain it was causing a good chunk of the country, is silly.

And so, yes, I understand there are a lot of conservatives who think
if they just held out a week longer or a month longer, that maybe they
could have achieved the impossible, which was to defund "Obama care" and
ultimately...

MATTHEWS: Well, who`s he talking to?

STEIN: ... erase it from the books.

MATTHEWS: Who`s Rush talking to...

STEIN: He is talking to...

MATTHEWS: ... if he`s not talking to the governors and senators? Is
he talking to people working in -- in dinettes, he`s talking to people
working in garages or traveling salesmen?

(CROSSTALK)

MATTHEWS: ... regular people -- it`s not politicians out there, so
who`s he -- regular folk who want to hear this language of anger. That`s
all I`m asking about. He`s making money talking like this.

STEIN: Well, I agree with you. I think he`s talking to a segment of
the population who looks at the Republican Party and thinks, for some
reason, that they`ve abandoned their ideological roots. I think this
traces back, obviously, to the George W. Bush presidency. And he`s talking
to them and he`s tapping into resentment they have over spending, over
government.

And he`s basically leading them down, you know, a faulty path. He`s
promising them -- and this isn`t just Rush. They are promising them the
idea that under this president, you could somehow convince him to uplift
(ph) his signature domestic achievement if you just hold out long enough.
And it`s a mirage.

MATTHEWS: Yes.

STEIN: And you know, a lot of people bought into it, but a lot of
consequences happened, as well. A lot of people suffered as a consequence.

MATTHEWS: You know, the reality here about the debt ceiling is that
two people said, Don`t cut the baby in half, as in King Solomon`s story,
give it away. In other words, We don`t want to win, we just want to save
the baby. We don`t want to see this government go down the toilet. We
don`t want to see us default and use our credit rating and get us killed
catastrophically economically.

And they were the people like Mitch McConnell, and eventually, at the
last minute, Boehner, and certainly the president, said, Look, let`s move
on. And I especially give credit to Mitch, who I normally don`t salute
much, but he basically said, This is going to be a catastrophe unless we
change our position.

CORN: Right. You now...

MATTHEWS: And they don`t like that.

CORN: This civil war that this whole episode revealed has gotten
worse, to the extent that you cite Mitch McConnell as the guy who prevented
the Republicans from going off the cliff and pulling everybody else with
him. Well, today the Senate Conservative Fund endorsed his Tea Party
primary opponent. So it`s, like, there`s no, you know, white flag or Let`s
sue for peace here within the party. Things have gotten worse. You have
what Erick Erickson is saying and...

MATTHEWS: But he basically said, Kiss off.

CORN: Yes, but...

MATTHEWS: He did. I got to hand him credit for the way he...

CORN: Mitch McConnell...

MATTHEWS: No, the way he responded to that challenge.

CORN: Yes. He said, Kiss off, but this is not going anywhere, this
fight. And when we come back in January 15th, February 7th...

MATTHEWS: OK...

CORN: ... the Republicans still have to...

MATTHEWS: Let`s go to a Tea Party expert. He`s on this program. He
can always come on -- Matt Kibbe, CEO of the Tea Party group FreedomWorks.
He said a split in the Republican Party was, quote, "a real possibility."
Let`s listen to Matt.

(BEGIN VIDEO CLIP)

MATT KIBBE, FREEDOMWORKS: Grass roots activists have an ability to
self-organize, to fund candidates that they`re more interested in, going
right around the Republican National Committee and the senatorial
committee.

That`s the new reality. Everything is more democratized, and
Republicans should come to terms with that. They still want to control
things from the top down, and if they do that, there will absolutely be a
split. But my prediction would be that we take over the Republican Party
and they go the way of the Whigs.

(END VIDEO CLIP)

MATTHEWS: Well, what do you make of that, Sam? The only thing I can
remember from my early interest in politics was around the Vietnam war
time, watching the Democratic convention as a grad student and watching and
thinking, I think the anti-war people do want to take over the party in the
instance of stopping the war in Vietnam because it had gone on too long by
`68, but they weren`t really thinking about changing the party necessarily.

These people are interested in a total -- what do they call it, some
an alternative they`re trying to create using the shape of the Republican
Party.

STEIN: Well, the analogy is right, but then you have to consider the
context which makes Matt Kibbe`s remarks, you know, relatively on base, I
think. You have a new campaign finance system in this country which gives
a lot more power and authority to solitary individual donors. It`s taken
away the power from the party committees and put it in the individuals`
hands.

And so essentially, one person can say, I want to bankroll this one
candidate, and suddenly, you don`t have a party structure.

MATTHEWS: Yes.

STEIN: And the second thing is, is we`re living in this time where
there`s an incredible libertarian bent. I think it`s a continued backlash
from the Bush years, and it`s being really profoundly seen in the
Republican tent. They were upset, obviously,with TARP and the spending and
Medicare part D. But they were really upset with what happened in Iraq,
and they thought that the party lost its roots as sort of a quasi-
isolationist, much more reserved foreign policy...

MATTHEWS: Yes.

STEIN: ... party. And there`s a backlash to that. And finally, let
me add one thing, which is that the Internet and social media has really
facilitated a lot of this. Candidates can now connect with so many more
people, so many more voters than they used to able to do in the past. That
has put fuel to the fire, especially when you look at Ron Paul and Rand
Paul, who have incredible grass roots mobilization techniques.

MATTHEWS: OK. Let me ask you this. I mean, nobody wants to -- none
of us, the three of us, can read minds or hearts. And when we say
somebody`s a racist -- I try to avoid that, but I can say when you try to
suppress the black vote, you`re trying to suppress the black vote. That`s
-- that`s palpable. You can see that as a policy. You may not like them
because they`re Democrats, not because they`re black, just they`re
Democrats. I understand that`s the politics, as nasty as it is.

Do the -- it seems like the big fight we`re talking about tonight is
the real anger was against Bush W., W. Bush, for not -- for not -- for
spending all that money and not vetoing any spending bill. The real anger
is there (ph) too far (ph) -- too adventuresome foreign policy, too much
Iraq, too much Afghanistan, too much more coming.

So the real fight seems to be with their party establishment, as
opposed to with Obama. But yet the face they put up on their posters...

CORN: See, I...

MATTHEWS: ... is not -- is not Mitch McConnell`s face. They put
Obama`s face up there.

CORN: I disagree slightly.

MATTHEWS: Well, explain that.

CORN: I disagree slightly. I think everything that Sam said is true
(INAUDIBLE) tensions (ph) within the conservative movement, which includes
the Republican Party. But I do think the anger they`ve felt about Obama is
-- you know, is an equal part of that. And they`re looking for the
Republican Party to express that anger and...

MATTHEWS: So Republicans don`t hate Obama as much as they do.

CORN: Well, yes. If you cut -- if you`re funding -- if you`re voting
for anything that doesn`t stop Obama, "Obama care," then you`re supporting
"Obama care." And this is -- all this is being driven in part by the
donors that Sam talked about, but really because the base of the party, the
primary voting base, has moved so far to the right because of this
political cultural backlash against Obama.

MATTHEWS: So if you can find any bill -- like they used to set up
bills just so they could get somebody in trouble. If you can find a vote
on the floor of the House or Senate, especially the House now, and any vote
that seems to be pro-Obama and somebody votes pro-Obama, they get
primaried, right, Sam?

STEIN: Chris, you don`t even need a vote. Look at what happened to
Senator Bennett in Utah, whose crime, essentially, was that he liked the
individual mandate before it was even a component in Barack Obama`s health
care law. For that, he was Tea Party primaried by Mike Lee and he lost his
seat. God forbid he did what Charlie Crist did, which was actually
physically touch Barack Obama, which forced Charlie Crist to switch parties
and...

MATTHEWS: You know, you`re not kidding.

(CROSSTALK)

MATTHEWS: And I will never forget the guy from the South who said, I
stood 10 feet from the president and I couldn`t stand it.

CORN: Yes. This...

MATTHEWS: Oh! That is tribal crap!

Anyway, thank you, David Corn. Guys, I think we`re on the same page,
roughly. It`s the brand. It`s the name. It may not be ethnic, although a
lot of it is, I think. Anyway, Sam Stein, thank you.

STEIN: Thanks, Chris.

MATTHEWS: Coming up, the Republican kamikaze caucus is back at work,
insisting that if only they stood firm -- or stand firm next time, they`ll
defund the Affordable Care Act. And guess who`s leading the charge? Mr.
Ted Cruz.

Plus, mad money. Many Republican donors have had -- I mean angry
money -- have had it with the Tea Party and they`re still sitting on their
checkbooks. As one bundler put it, Why do I want to fuel a fire that`s
going to consume us?

And the canary in the coal mine, why GOP troubles in Virginia may be a
sign of things to come countrywide.

Finally, I was lucky enough to attend the great Al Smith dinner in New
York City last night headlined by Steve Colbert.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": I am proud to be
America`s most famous Catholic. And I`m sure the cardinal is thinking,
Stephen, pride is a sin. Well, Cardinal, so is envy, so we`re even.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: The most famous Catholic? Interesting. I never heard that
one before.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Talk about an honest statement, Politico reports today on a
conversation between President Obama and John Boehner. According to
Politico, Obama wanted to know why they were in the second day of a
government shutdown that the speaker had repeatedly and publicly pledged to
avoid.

John, what happened, Obama asked. Well, according to people briefed -
- I don`t know how you get briefed -- on the October 2nd conversation,
quote, "I got overrun." That`s what happened, Boehner said.

HARDBALL back after this.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. The government may be open now,
for now, of course, the threat of default pushed off for now. But
extremists in the Republican Party are just getting geared up for what they
call the fight.

Just listen to Ted Cruz when ABC`s Jonathan Karl asked him about his
resolve.

(BEGIN VIDEO CLIP)

JONATHAN KARL, ABC NEWS: So you would do it again?

SEN. TED CRUZ (R), TEXAS: I would do anything and I will continue to
do anything I can to stop the train wreck that is "Obama care."

(END VIDEO CLIP)

MATTHEWS: And in today`s "Wall Street Journal, former senator Jim
DeMint explains that this fight is just getting under way. Quote, "It`s
worth explaining why my organization, the Heritage Foundation, and other
conservatives chose this moment to fight and why we will continue to fight.
The reason is simple, to protect the American people from the harmful
effects of this law."

For anyone who thought that (ph) the (ph) slap in the face against
Republicans just suffered, by the way, chastened them, any of these guys,
not so. We`ve only just begun.

Steve McMahon`s a Democratic strategist and John Feehery`s a
Republican strategist.

Gentlemen, you go at it against each other if you have a different
view here, but I kept hearing one word, John, from the right, I think to
your right, "fight." It wasn`t so much an issue, although "Obama care" is
the one on the table right now. It`s this sort of -- the cause. It`s
almost like -- it is like the old Civil War guys that never forgot the war
and kept fighting. We got to win the cause! We got to win the fight!

There`s something so gut (ph) in this. I don`t think it`s going away,
no matter how many treaties they sign.

JOHN FEEHERY, REPUBLICAN STRATEGIST: You know, within the Republican
Party, every Republican does not like "Obama care." All Republicans in the
Congress voted against "Obama care." This is not a strategic fight within
the Republican Party. It`s a tactical fight.

And for Jim DeMint to say that other Republicans are part of the
surrender caucus -- he`s doing it for one reason. He wants to raise money
off of a Tea Party that hates Obama, and this is the best way to do it.
But...

MATTHEWS: Let`s talk about tactics. You go to a bank, you take some
money out, a withdrawal, or you go to the bank with a gun and you shoot the
bank teller to take the money. That`s tactics, OK? They`re saying it`s
only tactics, but I think it`s a big difference between robbing the bank
and making a withdrawal because you can still want the money, but the
different ways of getting it are very important.

You can -- look, you can oppose capital punishment. You`re not going
to burn down the prison system, you know? There`s all kinds of ways to
oppose things.

FEEHERY: Almost every Republican outside of Ted Cruz thought shutting
down the government was stupid. And it was stupid. Turned out to be a
huge mistake. John Boehner warned against this. Mitch McConnell warned
against it. You`re absolutely right. There`s ways to do this. And had we
kept the focus on "Obama care," we`d have more stories about the failures
of "Obama care," which we don`t have, and...

(CROSSTALK)

MATTHEWS: Why were they kowtowed -- (INAUDIBLE) word means. Why were
they kowtowed into going along with this until the last day or two --
Boehner the last day, Mitch McConnell the last two or three days? Why did
they sustain this two-week fight for something and averting (ph) for it if
they didn`t believe in that approach?

FEEHERY: Because this is where the passion is from the Tea Party
and...

MATTHEWS: So...

(CROSSTALK)

FEEHERY: ... worried about primaries.

MATTHEWS: They were leading from behind?

FEEHERY: Well, listen, they were -- yes. I think they were. And I
think they had to walk members through it. And from John Boehner`s
perspective, he didn`t have the votes to do anything else until he had the
votes. And you know, that`s just a part of the problem.

STEVE MCMAHON, DEMOCRATIC STRATEGIST: You mentioned in the cluster
(ph), John Boehner was asked by the president, What happened, John? And he
said, I got overrun. And I think what was...

MATTHEWS: That`s what Obama said he said.

MCMAHON: Well, I`m...

MATTHEWS: Somebody briefed.

MCMAHON: I`m guessing that`s probably what he said. But he did get
overrun. There`s 50 or 60 Tea Party caucus members who control that
caucus, and John Boehner actually had to go through these steps, I think,
to save his speakership because if he had caved early, they would have
taken him out. He`s holding on by a thread anyway...

FEEHERY: Actually, I don`t think it was to save his speakership.
He`s not -- he`s not in any danger. I think it had more to with
unifying...

MCMAHON: If he had...

FEEHERY: ... his caucus...

MCMAHON: John...

FEEHERY: ... and trying to -- actually, to educate his members. You
know, most of his members...

(CROSSTALK)

MCMAHON: They`re too dumb. John, come on.

FEEHERY: They`re not too dumb.

(CROSSTALK)

MCMAHON: Educate his members?

(CROSSTALK)

MATTHEWS: Suppose Boehner had been original and gotten outside the
box and said, I know there are things we can unite behind besides not
liking "Obama care," like, I`ll come up with some cuts, across-the-board
cuts in entitlements, something that constrains entitlements, take them
back to where they were three COLAs ago, whatever. Would they have been --
agreed -- would they have changed their direction, or did it have to be
Obama?

FEEHERY: It had to be "Obama care."

MCMAHON: Right.

FEEHERY: It had -- this had to be the thing. This is what they
talked about all August. And you know what? They had to walk through the
process. It wasn`t a good process. It was a painful process. The leaders
said, Don`t do this, and the followers wanted to do it, and so they walked
through it, and that`s how it happened.

MCMAHON: But, John, Chris is absolutely right.

The words that you`re hearing from them now are fight. We`re going to
go back. We`re going to do this again if we have to. Ted Cruz just said,
we will do whatever it takes.

FEEHERY: Well...

MCMAHON: He didn`t learn a lesson.

FEEHERY: Well, of course he did. Of course he did.

(CROSSTALK)

MCMAHON: What he got was exactly what he wanted. He got attention.
He`s the front-runner on the Republican presidential nominating process.

(CROSSTALK)

MATTHEWS: What is that phrase? Look, you`re a regular political guy
like I was and you are, a regular person. You play within the legality and
the generally accepted rules of politics. You don`t attack people`s kids,
you don`t do a lot of weird things that we don`t do. Like, you don`t use
gas in wars.

This thing where he said, I would do anything, that I think was what
appeals to the extreme right.

MCMAHON: Right.

MATTHEWS: They want that ruthless, anything-goes stuff. I would do
anything?

FEEHERY: Yes. I mean, I`m not going to defend Ted Cruz.

MATTHEWS: I don`t think you have to explain it. I think he explained
it himself.

FEEHERY: I think the fact of the matter is that Ted Cruz does not run
the Republicans in the Senate. Mitch McConnell does. And I think
McConnell said, we`re not going to shut the government -- we`re not going
to go down this path again. And I think Mitch McConnell is the voice of
reason and the one indispensable man...

(CROSSTALK)

MATTHEWS: By the way, we`re two to one on that one. It was
McConnell. It was McConnell. He did what the president couldn`t do.

MCMAHON: He saved him.

(CROSSTALK)

MATTHEWS: He did.

(CROSSTALK)

FEEHERY: Which makes him harder to beat in a general election.

MCMAHON: Mitch McConnell was running things when the government shut
down. Mitch McConnell was running things for 17 days while it was shut
down. Mitch McConnell didn`t -- he did what the president and everybody
else couldn`t do working with Harry Reid.

But, ultimately, the guys in the House had to decide to surrender.
And Mitch McConnell didn`t make them surrender.

(CROSSTALK)

MATTHEWS: OK. Let me ask you a political question. I know.

Do you have a candidate against him?

MCMAHON: Against Mitch? No.

MATTHEWS: OK. Let me ask you about this. Who wins the primary and
the general in Kentucky?

MCMAHON: Well, I think that the primary is going to weaken McConnell.
He`s balancing that all the way through. He needed to look tough on
Obamacare.

MATTHEWS: Will he be reelected?

MCMAHON: I think he`s going to lose in the general election, but he
won`t lose in the primary.

MATTHEWS: I don`t think so. I think your voice weakened.

(CROSSTALK)

(LAUGHTER)

MATTHEWS: I want to put you in a box on that one, because I don`t
think you believe that. I think he gets reelected because the cojones he
showed in standing up the wacko birds, as they`re called by their own
party, I think people are impressed with it.

FEEHERY: Yes. He`s the one indispensable man in the Senate.

Now, for Kentucky to get rid of him would be a huge mistake. And also
the other thing about these Tea Party challenges, if you mount a real
challenge, Orrin Hatch did, most of the -- a lot of the House Republicans
did.

MATTHEWS: John McCain.

FEEHERY: John McCain. If you go and you fight it out, you`re going
to win. If you`re like Robert Bennett and you don`t -- the rules are
against you and you don`t fight it out...

MATTHEWS: I also think it helps to have a personality.

FEEHERY: It does. It helps to have a personality. But also most
importantly you have to win.

(CROSSTALK)

MCMAHON: I will say this. Mitch McConnell did his job this week.
And it was a good thing for the country.

(CROSSTALK)

MATTHEWS: OK. Mitch McConnell expressed confidence that extreme
Republicans learned their lesson in the showdown, the shutdown, in
politics, saying, "There is no education in the second kick of a mule.
There will not be a government shutdown. I think we have fully now
acquainted our new members with what a losing strategy that is."

John Feehery, I think that`s true, but I do think there`s more
likelihood that, come January, that there could be a shutdown of some
length, but I do think your party and the whole country got a wakeup call
about screwing around with the debt ceiling. I think the people that read
the finance pages, people with 401(k)s, retired people, once you`re 70, 75
years old, and the people watching know this, you can`t go get another job
and make a ton of money. This is it.

So your kitty, what you have been able to save and build with interest
rates, compound interest, you don`t want that screwed with.

FEEHERY: Listen, John Boehner and Mitch McConnell had worked this
out. There was never, ever going to be a debt default. Never going to
happen. And we all knew. I said this on the show many months ago. That
wasn`t going to happen. John Boehner was not going to let it happen.

MATTHEWS: Yes, but why didn`t he tell us? He said it, but nobody
believed him.

(CROSSTALK)

FEEHERY: He told us -- he told 30 members of the moderate caucus he
wasn`t going to let it happen. It got out.

(CROSSTALK)

MATTHEWS: My problem with him, the only big problem -- well, I have a
lot of problems with Boehner. But my big problem with him is, he knew at
the end he`d pull the plug. And for all those days and weeks the economy
was getting hurt, $24 billion in costs and all that, and all the shakiness
we showed to the world, was not good for us in the long run -- if an
airplane makes a rough landing, you`re not getting on that plane again.

I`m telling you something. He hurt us, and yet all the time, he knew
he would pull the plug. What do you think of that?

FEEHERY: Listen, I think that John Boehner had the cards he had and
he played them as well as he had -- he could play them.

(CROSSTALK)

MATTHEWS: OK, to save his seat.

(CROSSTALK)

FEEHERY: He saved his seat.

(CROSSTALK)

FEEHERY: He unified the caucus.

MATTHEWS: Thanks. Have a nice weekend, you guys, Steve McMahon,
great guys, great pugilists.

(LAUGHTER)

MATTHEWS: And thank you, John Feehery.

Up next, I was at last night`s Al Smith Dinner, where the great
Stephen Colbert honored the first major party Roman Catholic to run for
president.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": And since he first
shattered the stain glass ceiling, America has seen a flood of Catholic
presidents from John Kennedy to JFK to good old Jack Kennedy.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: Much more Colbert when we return. That`s Maria Bartiromo
right there.

Anyway, This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

COLBERT: Good to see you, Chris. How are you?

Everybody knows Chris is host of HARDBALL.

I have got some good news, Chris. It turns out that having HARDBALL
is now covered by Obamacare.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: Time now for the "Sideshow."

Last night, I had the honor of attending the Alfred E. Smith Memorial
Foundation Dinner up in New York City. It was the 68th time the event has
been held since 1945. And it honors former New York Governor the great Al
Smith, who was the first Roman Catholic to be nominated for president by a
major political party.

Well, the dinner celebrates the intersection of politics and religion,
and while it may be buttoned up, the humor definitely isn`t. This year was
no exception, with Stephen Colbert making a characteristic --
characteristically hilarious keynote speech.

(BEGIN VIDEO CLIP)

COLBERT: I love being up here in the white tie section. It`s a bit
of a gated community.

(LAUGHTER)

COLBERT: Don`t get me wrong. You people down there in, let`s say,
the black tie neighborhood are very nice.

(LAUGHTER)

COLBERT: I love black ties. Some of my best friends are black tie.

(LAUGHTER)

COLBERT: And as a Catholic engaged in the world of politics, I love
that this dinner has no separation of church and state.

(LAUGHTER)

COLBERT: As the journalist Theodore White put it, the Al Smith Dinner
is a ritual of American politics.

So, for those keeping track, the American rituals are this dinner and
the Republicans sacrificing 2014 to Ted Cruz`s ego.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: Wow. It was a pretty Republican crowd last night.

Anyway, Colbert went on to recognize the contributions he and his
fellow Catholics have made to politics over the years.

(BEGIN VIDEO CLIP)

COLBERT: This event has an illustrious history, ladies and gentlemen.

It began in 1945 to honor the accomplishments of Governor Al Smith, A
man who fought for government housing, public schools, labor laws to
protect women and children, and went on to become the first presidential
candidate of a major party who was Catholic.

And since he first shattered the stain glass ceiling, America has seen
a flood of Catholic presidents from John Kennedy to JFK to good old Jack
Kennedy.

(LAUGHTER)

COLBERT: And you could got have found a more perfect keynote speaker
tonight, because I am proud to be America`s most famous Catholic.

And I`m sure the cardinal is thinking, Stephen, pride is a sin.

Well, Cardinal, so is envy, so we`re even.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: Up next, mad money. Republican donors angry at the Tea
Party aren`t opening their wallets. Ooh.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MILISSA REHBERGER, MSNBC CORRESPONDENT: I`m Milissa Rehberger.

NBC News has learned the Spanish enrollment tool for the health care
Web site will not be rolled out next week as planned. And the English
version will be taken down for part of the weekend to make repairs.

Same-sex marriages will begin in New Jersey on Monday. The state
Supreme Court denied Governor Chris Christie`s request to put gay marriages
on hold while the state`s appeal is heard.

And a manhunt is under way in Florida for two convicted murderers who
escaped from prison using forged court documents -- back to HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

The Republican Party has suffered a self-inflicted trifecta of
disaster. They have been dealt a humiliating rebuke in the national polls,
of course. They`re more fractured than ever, and all while alienating a
once reliable source of funding, meaning dollars, in the business
community. They have this guy to thank, Ted Cruz, there he is, who graces,
if you will, the cover of this week`s "Bloomberg Businessweek" next to a
headline that is sure to strike fear into CEOs everywhere: "The Tea Party
Won."

Cruz has become the de facto leader of the GOP`s kamikaze caucus and
is already rallying the troops for another budget and default showdown over
the Affordable Care Act. But you don`t drive the economy to the brink and
threaten to do it again without making a few enemies out there, especially
among the big money backers who help payroll many Republican campaigns --
or should I say helped bankroll those campaigns.

Politico reports today that: "After getting squeezed last year by an
array of campaign committees, party committees and disparate super PACs,
many conservative donors are still sitting on their checkbooks, a worrisome
sign for the party with the 2014 midterm elections fast approaching."

Simply put, donors are also revolting.

Fred Sizeman -- Zeidman, rather -- a major GOP donor in Texas, told
Politico: "Why do I want to fuel a fire that`s going to consume us?" And
Al Hoffman, another major GOP bundler -- that`s the guy that brings the
money together -- said, "In my view, we`re becoming a party of
irrelevancy."

And Dirk Van Dongen, the head lobbyist for a prominent trade
association, didn`t mince words in an interview with "Bloomberg," saying,
"I don`t know of anybody in the business community who takes the pride of
the Taliban minority."

Josh Green is the senior national correspondent for "Bloomberg
Businessweek." And Harold Ford Jr. is a former congressman from Tennessee.
He`s currently the managing director with Morgan -- a managing -- well,
he`s the managing director of Morgan Stanley.

Let me ask Harold, because you have been on both sides of this world,
politics down in Tennessee and, of course, up there in New York. And when
you go to those power breakfasts up there in the morning, what do you hear
from the businessmen? Are they worried about this new strange right-wing
of their party?

HAROLD FORD (D), FORMER U.S. CONGRESSMAN: Well, Chris, you could
probably answer that too. I have seen you a few times at that same
breakfast jaunt.

(LAUGHTER)

FORD: But I would say two things.

One, people have to remember -- and I`m sure Josh`s reporting may have
revealed this -- the Tea Party grew up out of two things, one, opposition
to George W. Bush`s spending policies, and, two, the introduction of TARP.
Without that fuel, the Tea Party would not have gotten going.

Two, they don`t enjoy their primary source of funding from traditional
sources that Republicans have had in the past, mainly the business
community and those big trade associations. The democratization of money
raising has made it easier for them to raise it via mail and obviously via
the Internet.

Here they are now faced with a big dilemma, that party, this
intramural fight and what it means for the future of the party. I, for
one, as a proud Democrat hope they are able to get their act together in
some ways because a vibrant Republican Party, as your book, your great new
book, Chris, clearly illustrates, is positive for the country.

I want my party to prevail, but you need two parties that are strong
and that are respected and that are credible. And regrettably for the
Republicans and I think arguably regrettably for the country in many ways,
the Republican Party that we know today and we see today, it`s hard to even
imagine how the party compares, because it doesn`t, to the Republican Party
of the last 50 years in this country.

MATTHEWS: Josh, for years, the Republicans went out there and
recruited populists, evangelicals, segregationists in many cases from the
South who were dissatisfied with the Democratic Party`s liberalism. They
brought it along to this big tent.

And now those people on the right that have been used for political
reasons to get votes for presidents, like for Reagan onward, they`re
saying, we want to run the show now. We want to control the tent. We
don`t want Eastern business guys. When you put that cover out today on
"Bloomberg," what is the reaction to the cover that this guy is a menace?

(CROSSTALK)

JOSH GREEN, "BLOOMBERG BUSINESSWEEK": Well, any time you put Ted Cruz
on the cover, you get a reaction from anybody.

But I think the business community is newly alert to the danger that
he represents just to the economic climate.

MATTHEWS: Yes.

GREEN: Because what you had is, in the past, there was actually quite
a bit of overlap between Tea Party Republicans and business Republicans, in
the sense that...

MATTHEWS: Lower taxes.

GREEN: They`re both for lower taxes, they`re both for less
regulation.

The problem that the business community discovered in this last crisis
is that the Tea Party doesn`t believe in the basic principles of economics,
the idea that the debt ceiling is a real thing and a default would be
catastrophic for business. I think they have just woken up to that in the
last couple weeks.

MATTHEWS: Well, the GOP may have been banking on the idea that no
matter how bad things got in the party, big conservative donors and CEOs
wouldn`t actually defect and start giving to Democrats.

This came up in yesterday`s show during a discussion with Andrew Ross
Sorkin of "The New York Times" and Jim Cramer of CNBC. Let`s listen.

(BEGIN VIDEO CLIP)

ANDREW ROSS SORKIN, FINANCIAL COLUMNIST AND REPORTER, "THE NEW YORK
TIMES": I don`t think anybody in the business community has said, oh, my
goodness, I`m going to become a Democrat tomorrow.

(CROSSTALK)

JIM CRAMER, HOST, "MAD MONEY": I don`t know about that. I actually
heard CEOs say, I hope the Democrats win in Congress.

(END VIDEO CLIP)

MATTHEWS: Harold, this whole question about -- there seems to be a
difference of temperament too.

When Ted -- and you were a political figure of moderation. I know
that. This idea of Ted Cruz saying, I will do -- or would do anything to
kill Obamacare, that doesn`t seem like a businessperson talking. It
doesn`t seem like a regular, I hate to say the word, gentleman talking.

FORD: It seems like a fanatic talking in many ways.

It`s one of the things -- and I think there are some even on the
Democratic side who are not as bad as Ted Cruz, but who exhibit those
qualities at times. It`s not good for the entire body politic when you
talk about achieving real, serious, sustainable public policy results.

The politics of it, Chris, you said so well on this show. Health care
represents the baby for President Obama.

MATTHEWS: Yes.

FORD: And to believe you`re going to yank any man or woman or
family`s child from them is foolish.

Furthermore, the irony of all of it, as you and Josh and others have
talked about in the last few days is that the challenges that the health
care exchanges are having from an enrollment standpoint, you would think,
politically, optically, Republicans could be enjoying some benefit from
that. In fact, everyone is focused and consumed quite frankly with the
ugly message that Ted Cruz represents. And the way in which he chooses to
conduct himself.

I would agree with Andrew Ross Sorkin, though, I don`t hear an outcry
-- we talk about business people as there`s this one guy or one woman it
represents. But I don`t hear them saying they`re going to make a switch.
What I do hear them saying is they want results. And I would hope my party
and I`m proud Democrat, would view this moment, not necessarily to continue
to gloat.

The reality is we have a weak, weak adversary in the Republican Party
today. I hope we use this moment to find common ground with those
sensible, mainstream Republicans around budget reform, around entitlement
reform and tax reform, and push something before all of us are faced with
the near disaster that we faced over the last several weeks, particularly
the last few days, right before John Boehner and President Obama and others
were able to foster and hammer out -- Mitch McConnell and Harry Reid were
able to hammer an agreement.

JOSH GREEN, BLOOMBERG BUSINESSWEEK: But I think one of the things the
business community is worried about is not what Ted Cruz is worried about.
They`re not worried about Obamacare. What business people want is a
stable, predictable, economic environment.

And it`s this crusade against the law that has disrupted that. That
provides these debt ceiling scares. And now, we`re going to have another
shutdown scare.

CHRIS MATTHEWS, MSNBC HOST: When did it occur that you need law to
enforce a market? Markets have to be protected by law. That`s how it
works.

FORD: I think what Josh is saying in and fairness, he can speak for
himself, but you need stable political environments for marketplaces.
Marketplaces to work.

GREEN: Exactly.

FORD: For small, medium and big business leaders, whatever size, and
for that matter, people who work every day were for them to feel some sense
constancy and certainly as they go to work each day. Not to mention those
American who are not working and who miss paychecks because of the
incompetence of those in Washington.

MATTHEWS: Harold, it seems that in Wall Street and out there in New
York, the financial center of the country, around the country, who have
wealth have been used to voting against their own personal economic
interests. They will vote for more progressive taxes. They will vote for
environmental legislation. They`ll vote for a lot of things.

Republicans have had, I call it the luxury of being able to vote their
pocketbook all the time, right? So, now, they`re getting a feel of what
it`s like to be a Democrat maybe. If they vote straight party for guys
like Cruz, they`re basically hurting themselves, probably.

FORD: Some would argue that, and I don`t put my -- I`m not in -- you
put me in this category with a lot of people, I wish I was in category in
some level because of the wealth accumulated. But I would argue against
it. I think when you vote to ensure with your franchise to ensure that
young kids in the country regardless of where they live and what their
parents do for a living will have access to a good and decent education.

And when you vote for people to be able to afford their own health
care, when you vote to ensure that veterans are taken care of, I think
that`s positive for the country. I think, I image you and I may share the
view. So, I don`t view it as voting against -- and I`ve said that when I
was in Congress and campaigned when I ran for the U.S. Senate and
campaigned and raised money amongst those in that class of people you
referred to.

I made clear and many of them agreed this was about making the country
better and stronger, because as President Clinton said best, a rising tide
lifts every boat, even the boats who seem at the top and certainly those
boats that need more lifting than others.

MATTHEWS: Big thought.

GREEN: Well, to go to Sorkin`s point, I don`t think that you`re going
to see a lot of, you know, rich businessman suddenly voting Democrat. What
you might see or beginning to see is business saying, hey, we`re going to
think about running our own moderate candidates in Republican primaries and
hope we can knock off Tea Party guys who don`t believe in this --

MATTHEWS: I`m glad we have Harold on. Harold Ford, thanks so much
for your perspective, joining us tonight.

FORD: Congrats on your book, too.

MATTHEWS: Thank you, sir. Thank you for the good new words.

Josh Green, thank you, too.

Up next, Republicans are struggling out in Virginia, right across the
river from here. And that could be a sign of bad things to come across the
country. Virginia has a predictable way of voting. And it doesn`t look
good for the Republicans this year because they`re not voting in that
direction. Odd year here and good for the Dems.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Tom Foley, the former beloved speaker of the House, has
died today. Foley has represented, who did for many years, the area around
Spokane, Washington. He did it for three decades. He served as speaker of
the House, of course, from 1989 to 1994.

Later, he was ambassador to Japan under President Clinton. He was a
close friend of mine. I loved working with that guy. He always stood with
us, a gentle man, a really honest good guy in politics.

I mean, he is -- I hate to say he`s exceptional, but he was truly an
exceptional guy.

Tom Foley, we lost him today at age 84.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

After their defeat in the 2012 elections, Republicans conducted an
autopsy, if you will, to find out what went wrong.

Well, the report found among other things, that the Republicans
alienation of African-Americans. The young and women, and its ideological
opposition to issues important to these groups of voters cost them at the
polls.

But the GOP might be blowing their chances for a more moderate makeup
over in their first electoral test now since 2012, the race for governor of
Virginia. Republicans have nominated an extreme right wing candidate who
has everything they said they did not want the party to represent. And
guess what? The guy`s losing.

Republican Ken Cuccinelli recently compared abortion to slavery in
comments to an online radio host.

(BEGIN AUDIO CLIP)

KEN CUCCINELLI (R), VIRGINIA GUBERNATORIAL CANDIDATE: If you go back
to Abraham Lincoln and the Civil War, he looked at the Civil War as a sort
of a national penance for slavery, the evil of slavery and letting it go
on. And the Founders knew how bad it was.

And we have other things in this country today and abortion is one of
them.

(END AUDIO CLIP)

MATTHEWS: Wow, 2012, Virginia voted more closely like the rest of the
country than any other state in the Union. It`s basically a great weather
vane.

And the governor`s race this year may become the first indication of
the GOP`s national standing post shutdown.

In the past nine elections for governor, Virginia has chosen a
governor from the opposite party of the president in the White House, but
the political winds seem to be blowing in a different Democratic direction.

Joining me to discuss the national implications of Virginia`s
governor`s race are MSNBC contributor, Joan Walsh, and Democratic
strategist Margie Omero.

Margie, you`re sitting here, so you`re first.

This thing about slavery (INAUDIBLE) don`t compare anything to Hitler.
Don`t compare anything to slavery and you`re better off. Here he is --
because abortion, unlike slavery, which would be a crime today, you know?
If you try to enslave someone, you might just find yourself in prison for a
number of years.

Abortion is not a crime. You may not like it. It may be morally
offensive to you. But it`s not a crime. People shouldn`t be making these
comparisons.

Your thought?

MARGIE OMERO, DEMOCRATIC STRATEGIST: You said they want -- if
Republicans are looking for a moderate makeover. There is no makeup artist
alive that could make Ken Cuccinelli up to be a moderate.

MATTHEWS: Why are they running him? Why are they running him?

OMERO: Well, he came of age, if you will, in this class of extreme
Tea Party folks, like Richard Mourdock or Allen West and, you know, sort of
feeded off -- he fed off the energy he got by being this crusader. And
now, by realizing that`s not popular anymore, he is trying to paper over
these extreme views and nobody`s buying it. He`s just continued to sink in
the polls and now, he looks like a typical politician that just wants to
say anything to get elected.

But when he has this incredibly -- what he said as recently as a year
ago. I mean, look, Chris, there`s a difference between trying to appeal to
women and actually appealing to women and that`s the problem that Ken
Cuccinelli has. That`s the problem the national Republicans have.

MATTHEWS: This will stir the blood of a lot of women watching -- if
women were not allowed to vote, which they are, of course, Cuccinelli would
be winning this race. Among men, Cuccinelli leads Democrat Terry
McAuliffe, 44 to 36, by eight points. So, this is the importance of the
19th Amendment right here.

But guess what? The 19th Amendment was passed long time ago, almost
100 years ago, and women are allowed to vote, Joan.

JOAN WALSH, SALON.COM: Yes, we are.

MATTHEWS: And McAuliffe leads Cuccinelli by 20 points among women.
If Republicans were trying to court the women`s vote, Cuccinelli may not be
the best standard bearer.

Here`s McAuliffe`s newest ad.

(BEGIN VIDEO CLIP, POLITICAL AD)

UNIDENTIFIED FEMALE: And Cuccinelli tried to ban common forms of
birth control.

UNIDENTIFIED FEMALE: Even the pill.

UNIDENTIFIED FEMALE: Even the pill.

UNIDENTIFIED MALE: Ken Cuccinelli is just way too extreme.

UNIDENTIFIED FEMALE: Way too extreme.

UNIDENTIFIED MALE: Way too extreme.

UNIDENTIFIED FEMALE: Way too extreme for Virginia.

(END VIDEO CLIP)

MATTHEWS: Joan, I love the fact one of the guys saying he`s too
extreme looks like a pretty conservative guy himself. He`s got the long --
he looks a like country, and he`s saying he`s too extreme.

WALSH: It`s very ridiculous. I mean, Reince Priebus is now going to
have to do an autopsy on this autopsy, Chris.

I mean, this is such a disaster for them.

MATTHEWS: You think they pay for somebody to decide that it was
unfortunate politically for them to go after women`s issues and make women
angry? It`s not an interest group. There are more women voters than men
voters.

WALSH: Right. We`re the majority, but they can`t help themselves and
this is the ideology of their party. You know, they keep acting like we`ve
got some extreme -- we`ve got some guys who have a language problem, you
know? They use the wrong language. They talk about rape.

It`s not just that. It`s the underlying ideology of this modern
Republican Party, actively repels women. And, you know, women -- we saw
his gender gap increase during the shutdown because women were more upset
about the shutdown than men. Everybody hated it, but women hated it more.

MATTHEWS: Why was that? Why was that?

WALSH: Well, you know, I think for one thing, we always see an
economic -- gender gap on economic issues. Women are more economically
liberal. They`re more sensible. They may feel more vulnerable. They`ve
always been more of a pro-government voting bloc and I think we`re seeing
that in this race, too, as far as the shutdown.

MATTHEWS: Do you know what you just said, my friend?

WALSH: What?

MATTHEWS: You just said women are more sensible than men. Now, if I
said something like that --

WALSH: Oh, forgive me.

MATTHEWS: I think you may be right, I can allow that fact to be true.
Because I think in many ways, women are more logical. They focus more in
the here and now. Men are sometimes going off into their separate spaces.

Thank you. Thank you, Margie Omero.

WALSH: Pragmatists.

MATTHEWS: Yes, and we`re sentimental guys, us guys out here,
dreamers.

Thank you so much. Serious -- I think it`s a serious politics to be
watching, exactly what you two are talking about. We`ll be right back
after this.

WALSH: Thanks, Chris.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this.

The week`s behind us, but not the fight. The country is roiled and
will remain so by those who cannot stand the way of the last election. The
only twinkle of hope out there is lit by the words of the two committee
chairs who will now buckle down to find a compromised budget between the
two houses of Congress and two political parties, Senator Patty Murray of
the state of Washington and Paul Ryan of Wisconsin.

I hope they understand that finding common ground is far harder than
finding compromise. Compromise can be as simple as putting the difference
over numbers and it can also mean, and this is important, each of the two
sides finding something to important to them that they`re willing to
concede somewhere else. It means balancing the need for action by your
side with the need to give the other side what will move them.

I`ve worked for the Senate Budget Committee during the 1970s, back
when it first started. I remember how the chairman of the committee,
Edmund Muskie of Maine, was able to forge a common budget each year and do
it on time each spring where the top Republican on the committee, Henry
Bellmon of Oklahoma. Yes, things like that can be done.

I hope you can get out this beautiful fall weekend and pick up a copy
of "Tip and The Gipper: When Politics Worked". It`s a story of my coming
of age politically. It fits with those great ads they`re running on MSNBC
right now about my work in politics before coming to HARDBALL. If you read
it, I`m really asking you to do it, you`ll know where I`m coming from each
night here.

Oh, and, by the way, I`ll be speaking of Politics and Prose Bookstore
here in Washington tomorrow night, actually, that`s Saturday. And I`ll be
at North Central College just outside Chicago on Sunday, moving around.

And that`s HARDBALL for now. Thanks for being with us.

"ALL IN WITH CHRIS HAYES" 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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