Hardball with Chris Matthews, Transcript 12/28/2016

Guests: Betsy Woodruff, Michael McFaul, Philip Bump, Jeanne Zaino, Jamil Smith

Show: HARDBALL Date: December 28, 2016 Guest: Betsy Woodruff, Michael McFaul, Philip Bump, Jeanne Zaino, Jamil Smith

STEVE KORNACKI, GUEST HOST: Obama versus Trump has the transfer of power in a rough patch.

Let`s play HARDBALL.

Good evening. I`m Steve Kornacki, in tonight for Chris Matthews.

With just weeks to go before the transition of power in Washington is complete, the outgoing and incoming administrations are signaling two very different policies when it comes to Mideast peace. Today, Secretary of State Kerry took Israel to task over its settlement construction, and he warned that a two-state solution is now in jeopardy.

Earlier in the morning, President-elect Donald Trump gave a prebuttal of sorts. On Twitter, he said that Israel has been treated with disdain and disrespect. And he said, "Stay strong, Israel. January 20th is fast approaching."

(INAUDIBLE) the latest flashpoint between current and incoming presidents. Trump took to Twitter this morning rebuke President Obama`s transition efforts. He wrote, quote, "Doing my best to disregard the many inflammatory President O statements and roadblocks. Thought it was going to be a smooth transition. Not!"

It was not exactly clear which inflammatory statements Trump was referring to. Yesterday in a podcast interview with David Axelrod, Obama said he thought he could have won a third term if he`d run in 2016. This afternoon at Mar-a-Lago, Trump seemed to contradict that earlier tweet.


QUESTION: Mr. President, when you tweeted this morning that the transition of power wasn`t going smoothly (INAUDIBLE) President Obama. Can you elaborate a little bit? Is it going smoothly?



KORNACKI: Now, critics say Trump shouldn`t be weighing in so forcefully on foreign policy weeks before his inauguration. NBC`s Andrea Mitchell asked Secretary Kerry about Trump`s diplomacy. Let`s watch that exchange.


ANDREA MITCHELL, NBC CORRESPONDENT: Is it confusing allies and adversaries?

JOHN KERRY, SECRETARY OF STATE: I think it`s having some impact, obviously, on allies who are questioning, you know, what`s going on. But they have their own policies. You know, they`re not going to be swayed and intimidated by a tweet. They`re going to pursue their interests and their own values.


KORNACKI: And late today, Trump told reporters he spoke with Obama on the phone and the two had a very nice conversation.

For more on all this, I`m joined by NBC`s Hallie Jackson in Palm Beach, "Washington Post" columnist Eugene Robinson and Hugh Hewitt, host of "The Hugh Hewitt Show" on Salem Radio Network. But are MSNBC political analysts.

So Hallie, let`s start with you. Here`s what we know. Donald Trump this morning didn`t seem too happy with President Obama. He spoke with President Obama. Now he seems to be back on the same page, at least as close as they`re ever going to come to being on the same page.

So fill in the blanks here. What was the bill of particulars when it came to Trump feeling upset, and what was resolved in this phone call?

HALLIE JACKSON, NBC CORRESPONDENT: Listen, Steve, I think you`re right in that that podcast that President Obama did with one of his former aides, David Axelrod, seemed to set Donald Trump off not one day, not two days but three days in a row after the president, as you mentioned, said if he had run again and presented his vision, he could have won. Donald Trump clearly took exception to that.

But I also think there were other comments. I think that the remarks, according to folks that I`ve been talking to, at Pearl Harbor that President Obama made, not mentioning Donald Trump by name but seeming to take a little bit of a subtle dig at him when he was out there at the memorial with Japanese prime minister Shinzo Abe. I don`t think that that necessarily went unnoticed by President-elect Trump.

So the timing of this is interesting, right? 9:07 in the morning is when Donald Trump delivered this third tweet about the president, about the issue with the transition. Even a week ago -- even after a week ago, one of his aides said that President Obama was being quite gracious in handling the transition.

We know that after that is when President Obama picked up the phone -- he didn`t have to, but he did -- to call Donald Trump in what the White House tells us was a very positive call, a call focused on a smooth and effective transition, pointing out that the two are going to be talking more in the coming weeks, that they committed to more conversations between now and the inauguration.

I think this speaks to the way that this relationship could potentially benefit both men. You`ve got President Obama, who, if he has an ear -- if he has the ear of the next president, essentially, could maybe put some pressure on to him to perhaps not roll back some of those executive orders that Donald Trump has promised to roll back, or at least to kind of put a bug in his ear about it. As we know, Donald Trump has listened to President Obama in that Oval Office meeting and in these conversations in the past.

On the flip side, you know, Donald Trump is somebody who has never been president before. There are not that many people who have been president. Barack Obama is one of them. And so President Obama, President-elect Trump could potentially have a lot to talk about here even after January 20th.

KORNACKI: Well, Congressman Chris Collins, a Trump supporter, member of the Trump executive transition committee -- he said he agrees with Trump`s take on the transition.

Take a look.


REP. CHRIS COLLINS (R), NEW YORK: I`ve been getting reports myself from what we would call the landing teams that are in the administration. This administration is not working to help the smooth transition of Donald Trump into office. They`re doing everything they can to make this a bumpy road.


KORNACKI: That view, though, not shared by everybody in Trump world. On Friday, Trump`s incoming White House press secretary, Sean Spicer, told CNN President Obama -- quote here -- "President Obama and his team have been unbelievably gracious to the president-elect and his team."

And as recently as yesterday evening, another member of the transition team, Anthony Scaramucci -- he told me on this show that Trump had nothing but praise for the current president. He seemed to directly contradict Trump`s statement today that it was not a smooth transition.

Take a look.


ANTHONY SCARAMUCCI, TRUMP TRANSITION TEAM: I think when the president- elect is going after the president, the current president, in that way, it`s very jocular. It`s two guys. I`m sure they`re going to play some golf together. That`s my prediction.

And by the way, President-elect Trump, if he was here right now, he`d tell you that the Obama administration has done everything that they can to help us in the transition.

After the 90-minute meeting they had, he came back to New York and he expressed to many of us how impressed he was.


KORNACKI: Well, Eugene Robinson, what do you make of this? Because in a way, it almost does seem par for the course with Donald Trump, different than anything we`ve ever seen before. But somebody gets under his skin. He lets the world know about it. Then, apparently, the two of them talk, then he`s back to saying nice things. There does seem to be a pattern here where these eruptions he has on Twitter prove to be very fleeting.

EUGENE ROBINSON, "WASHINGTON POST," MSNBC POLITICAL ANALYST: Yes, I think we`ve seen this already during the year, and I think we`re going to see more of it. I think that`s exactly what happens.

My take on what`s happening with the transition is that at the White House level, I think it probably is going very smoothly and very well. And I think the Obama administration is full of advice for the president-elect, and he has the good sense to listen to that advice from somebody who has held this office, the toughest job in the world.

Out in the agencies, those landing teams that were referred to earlier, who are parachuting into federal agencies, I think there might be a different story. Remember, the Trump team began with requests of lists of employees of the Energy Department or the EPA or whatever who worked on climate change. That sets a -- that sets a pretty -- a pretty wary tone for -- for -- for those bureaucrats and those agencies, who I think may be -- they have their defenses up and may not be as helpful as they potentially could be.

KORNACKI: And Hugh, what do you make of Donald Trump -- again, I say it almost is -- for Donald Trump, it almost is par for the course to be airing all this, and then, you know, in the morning, to be saying one thing and then sort of to swing by the end of the day. I guess it`s not the first time we`ve asked the question. I mean, is that -- is that presidential, the way you see it?

HUGH HEWITT, MSNBC POLITICAL ANALYST: Well, he`s not the only one who`s upset with President Obama. Speaker Ryan tweeted out today that Secretary Kerry lacked the credibility to make his 72-minute attack on Israel today. And so in the background is not only the President Obama, David Axelrod, very interesting conversation that was part of the delegitimization of a Trump win -- that`s what got under the president-elect`s skin, I think.

But there`s this massive change in American policy. It`s radical. It`s actually the most significant thing that I think has happened in a transition in my lifetime in terms of a major departure from existing policy and throwing our ally into great fury of -- of back and forth.

So I think when he said, We were expecting a calm transition -- when he said that, no one was expecting President Obama and Secretary Kerry and Ben Rhodes to throw the American-Israel situation into a complete dustpan and - - you know, dustpan and set it on fire. And it is right now on fire, and that is not smooth.

And I agree Speaker Ryan. That resolution at the U.N., Steve, was a very bad idea. I agree with Donald Trump it was a very bad idea. And it has turned over quite a lot of controversy.

KORNACKI: Let`s stay on that. Back in 2008, three days after he was elected for the first time, then President-elect Barack Obama declined to weigh in on a foreign policy issue. He said the United States only has one president at a time.

Take a look.


QUESTION: Senator, for the first time since the Iranian revolution, a president of Iran sent a congratulations note to a new U.S. president. I`m wondering if -- first of all, if you responded to President Ahmadinejad`s note of congratulations.

SEN. BARACK OBAMA, PRESIDENT-ELECT: I will be reviewing the letter from President Ahmadinejad, and we will respond appropriately. It`s only been three days since the election.

I have to reiterate once again that we only have one president at a time. And I want to be very careful that we are sending the right signals to the world as a whole that I am not the president, and I won`t be until January 20th.


KORNACKI: Obviously, it`s a very different public message President-elect Barack Obama was sending eight years ago than we`re hearing from President- elect Donald Trump right now.

But Eugene Robinson, what about the point Hugh Hewitt makes? This is a two-way street, isn`t it? I mean, you`ve got Barack Obama, the outgoing president. He knows he`s out January 20th, knows there`s a new administration coming in. This is a major shift, what the Obama administration did when it comes to Israel, when it comes to not vetoing that resolution.

There is -- it almost does invite public disagreement maybe from a successor of a different party, doesn`t it?

ROBINSON: Well, I think the administration probably felt it was that important. This is hardly the first U.S. administration to be critical of Israeli settlement policy. In fact, every U.S. administration since 1967 has been critical of Israeli settlement policy. And this is, in that sense, a continuation of the view that has been held, although admittedly, it was done in a way that could not help but get the attention of the Israel government and the attention of the world.

You know, my comment on what Secretary Kerry said today, and on the action itself, is that it just seems to me rather late, not in terms of the transition, just in terms of the situation on the ground in Israel and the occupied territories. It seems to me that the day that we could actually talk about a realistic two-state settlement is probably gone.

KORNACKI: And Hallie Jackson, I`m curious, in Trump world, how they`re interpreting all this, whether it`s the resolution here, the U.N. resolution dealing with Israel, whether it`s the actions that President Obama is suggesting, promising he`s going to take when it comes to Russia, ordering the investigation. He wants answers on what exactly happened before he leaves office.

It does seem like Barack Obama is very mindful of who his successor is and of trying to get certain things on the record before he leaves office on January 20th.

JACKSON: It`s an interesting point, Steve. You played that sound bite from I believe it was Chris Collins just a couple of minutes ago talking about his concerns with how this transition is going. I will tell you that I think other reports from the ground reflect that on the sort of staff level, the transition is sort of proceeding as it typically would.

What is a little bit maybe not atypical but notable in this situation are the steps that the Obama administration is taking to try to put in some of these policies and procedures in place so that they either cannot be rolled back or to do them now so they cannot be undone by President-elect Trump once he takes office on January 20th. That has certainly caught the attention, of course, of members of the Trump transition team.

I think that at this point, the idea of one president at a time, while it has been precedent for a long time for American presidents, it`s something that Donald Trump has demonstrated through his words and his actions is less important to him, less of a priority to him.

And I think that was illustrated very forcefully in his tweets just today to Benjamin Netanyahu talking about Israel, saying, "Stay strong, Israel." You know, "January 20th is just around the corner," sending this very deliberate message to the prime minister, who by the way, then wrote back and at (ph) mentioned (ph) in his tweet Donald Trump`s children, Don, Jr., and Ivanka Trump -- Don, Jr., of course, expected to take over the business and not be involved in the administration from a policy perspective at all.

So I think that when you look at sort of big picture, how the Trump team is feeling about this, I think they understand there are 23 days left and that they expect on January 20th, with a Republican Congress, with President- elect Trump then being president and in office, It will move very quickly to try to be an antidote, if you will, to some of what President Obama is putting in place.

KORNACKI: And Hugh Hewitt, I`m just wondering -- obviously, you are a critic of what the administration has done here with the United Nations when it comes to Israel. You have Donald Trump out there saying, Look, it`s all different three weeks from now

As somebody who does not like what the Obama administration did last week with that resolution, do you feel that they have put something permanent in place, something permanent on the record by getting that U.N. Security Council resolution that Donald Trump will not be able to undo when he becomes president? Or do you feel, Hey, fine, three weeks from now, I get somebody in there with a different perspective on this, this all becomes a momentary thing?

HEWITT: Well, the reason this matter is because it is a permanent resolution. It will have to be reversed by the Security Council of the United Nations, if at all, and I think it may lead to the defunding of the U.N.

It`s a major deal. Up until now, Steve, the only thing of consequence I can ever remember happening during a transition was Bill Clinton`s pardon of Marc Rich. Now we have the criminalization of 600 Israelis living on the West Bank, and specially the criminalization of the Western Wall being defined as occupied territory. by this. So Resolution 2234 is a radical step.

I listened to Secretary Kerry today try and diminish it, but the difference between what he was pointing to is the fact that Hamas now controls Gaza and that the Fatah has gone radical and President Abbas is president for life. And I thought the Kerry speech was rate (ph) so over the top that I`m agreeing with Chuck Schumer and with other Democrats like Steny Hoyer. They`ve gone off the edge on this, and that`s just not usual and it`s deeply damaging to our ally, and I don`t think it can be reversed in the way that a lot of these regulations and executive orders -- you blow them off the first week.

But you can`t change this. They`ve done some real damage. And I think part of it was a diversion from the catastrophe of Syria, a diversion from the red line that was not enforced, a diversion from the JVs that are still in Mosul, a diverse from leading from behind. I think that`s what this is all about.

KORNACKI: All right. Hugh Hewitt, Eugene Robinson, Hallie Jackson, thanks to all of you for joining us.

HEWITT: Thanks, Steve.

KORNACKI: All right. And coming up, much more on John Kerry`s big speech today. The secretary of state says the two-state solution is in serious jeopardy and that no administration has done more for Israel than President Obama`s. Kerry`s announcement today brought a sharp rebuke from Benjamin Netanyahu. Much more on that is ahead.

Plus, punishing Putin, the U.S. getting ready to retaliate against Russia for meddling in our election. The Russian foreign minister says if the U.S. introduces new sanctions, there will be a response.

And Harry Reid says the potential Democratic candidates for president in 2020 look like an old folks home. We`ll take a closer look at some of the rising stars who could emerge to lead the party and challenge Donald Trump.

And finally, the HARDBALL roundtable is going to be here with three things about the Trump transition that you might not know.

This is HARDBALL, the place for politics.


KORNACKI: With all the back and forth between President Obama and President-elect Trump, Gallup asked Americans to name their most admired man for 2016, and Obama came out on top, 22 percent of respondents naming the current president as their most admired man. That is the ninth consecutive year that Obama took top honors, Trump coming in second place with 15 percent, followed by Pope Francis and Bernie Sanders.

And when it come to the most admired woman, Hillary Clinton was the most admired for a record 21st time, first lady Michelle Obama coming in second place.

We`ll be right back.


JOHN KERRY, U.S. SECRETARY OF STATE: Friends need to tell each other the hard truths. And friendships require mutual respect.

Despite our best efforts over the years, the two-state solution is now in serious jeopardy.


KORNACKI: All right, welcome back to HARDBALL.

That was Secretary of State John Kerry in a firing speech -- fiery speech - - excuse me -- directed at Prime Minister Benjamin Netanyahu and Israel and its accusations that the United States orchestrated the U.N. resolution that objected to Israel building settlements in the West Bank.

It was a remarkably forceful repudiation.


KERRY: The United States did not draft or originated this resolution, nor did we put it forward.

Ultimately, it will be up to the Israeli people to decide whether the unusually heated attacks that Israeli officials have directed toward this administration best serve Israel`s national interests.

Those attacks, alongside allegations of a U.S.-led conspiracy and other manufactured claims, distract attention from what the substance of this vote was really all about.


KORNACKI: Now, the speech, which was largely symbolic, was a last-ditch effort at paving a path toward peace in the Middle East.

And it comes as Donald Trump has upended modern convention by openly questioned the current administration policy on the peace process. Last week, the Israelis enlisted president-elect Trump to help stop the U.N. vote. He called the Egyptian president and urged them to table a resolution his country proposed.

Kerry`s speech drawing a strong rebuke from the current Israeli prime minister.


BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: I must express my deep disappointment with the speech today of John Kerry, a speech that was almost as unbalanced as the anti-Israel resolution passed at the U.N. last week.


KORNACKI: For more now, I`m joined now by Ayman Mohyeldin, NBC`s foreign correspondent, and Betsy Woodruff, political reporter for The Daily Beast.

So, Ayman, let me start with you.

The United States, Israel close allies going back a long ways. You have the secretary of state for an outgoing administration. This is as tense as I can remember seeing it because it a current administration and an Israeli government. At the same time, you have a new American administration coming in that is going to have a very different perspective on this.

So, the question is, how permanent is what happened today? How permanent is the split we`re seeing now vs. is this something in three weeks that just kind of disappears?

AYMAN MOHYELDIN, NBC NEWS CORRESPONDENT: The more important thing, or the more permanent thing is the U.N. Security Council resolution. That now has been enshrined, if you will, in the international legal order. That is now a binding resolution that establishes some very hard facts about the realities on the ground.

What Secretary of State Kerry said today, not necessarily a matter of policy. You could literally have within -- in 23 days, you could have a new administration that comes in and says we`re done with this, settlements are legit, we`re going to legalize them, we accept them, we are going to move the embassy to West Jerusalem.

They could say a host of things that would totally completely contradict everything we heard from John Kerry today.

KORNACKI: Does the U.N. resolution that was passed last week -- the United States declined to veto, formally didn`t take a position, but declined to veto it. If the U.S. under Trump said and did what you`re saying, would this U.N. resolution have any power or have any authority over that?

MOHYELDIN: Well, the U.S. would then be in violation of those international norms, those international orders, the international law that says the Palestinian territory pretty much along the `67 borders, East Jerusalem, Gaza Strip, those are occupied territories.

The United States, for most of the people who have studied this, does not intend to move its embassy into East Jerusalem. Not only is it provocative, but it legally would not be a sound decision for the United States to do. It would really make itself, entangle itself in all kinds of legal problems.

It is more likely going to move it in the west part of the city, which ultimately will be part of Israel in some capacity. So it is a safe move if they decide to do it. It is just a highly symbolically provocative move at any point because it`s recognizing Jerusalem as the capital of Israel, something that the Arab world, the Muslim world and the international community back by U.N. Security Council resolutions have so far rejected.

KORNACKI: And, Betsy, again, you had John Kerry come out there today. He gave this speech, talked to the press for over an hour. Then you have the Israeli prime minister minutes later really coming out and responding in very, very strong terms.

What was the rationale behind -- from the Obama administration`s standpoint? Why this speech from John Kerry? Why now? Why the language he`s using? What are they trying to achieve here?

BETSY WOODRUFF, THE DAILY BEAST: What this speech does is the first part, of course, it was an extended repudiation of the current policies of the Israeli government regarding settlements.

But then towards a bit closer to the end, Kerry actually laid out his parameters for potentially negotiating a two-state settlement. And that actually isn`t unprecedented.

At the very end of his presidency in 2000, Bill Clinton did kind of a similar thing. In the final weeks of December, he said, here`s what my parameters would be. Here`s how far my administration got in negotiations.

And it was almost like a legacy the Clinton administration passed to the Bush administration. And now that Kerry`s team has been able to put on paper, has been able to put publicly on the record saying this is how far we have come. This is what we think might work. Here are our ideas. Here are our parameters.

So the fact that this speech is coming at the tail end of Obama`s presidency is sort of a capstone. Now, of course, it`s going to be draw significant criticism, both from Palestinian politicians who say some of the parameters within the speech itself are untenable.

For instance, Kerry suggested that Palestinian refugees should give up the right to return. That`s pretty much -- that`s a nonstarter politically in the West Bank.

That said, though, the fact that Kerry coupled some of these challenging parameters with a protracted criticism of Israel means that the argument that he made or the pitch that he laid out might have more appeal to members of both communities than, for instance, any pitch coming from Trump and his team.

KORNACKI: Well, Kerry also had some harsh words for the political coalition that has kept Netanyahu in power in Israel. Listen to this.


KERRY: The Israeli prime minister publicly supports a two-state solution, but his current coalition is the most right-wing in Israeli history, with an agenda driven by the most extreme elements.


KORNACKI: Ayman, this has been just a sort of assumed thing, when people talk about the Middle East, at least in the United States, for the last generation or so, the idea that ultimately there is going to be two states. There is going to be an Israel. There is going to be a Palestine.

Palestine is probably going to be most of the West Bank. It is going to be Gaza. This is where it is ultimately headed. A generation later, a generation after this was sort of codified with the Oslo accords, not the reality right now. Is this still a plausible endgame here?

MOHYELDIN: Is it a plausible endgame?

I guess so. You could say that still there is the flicker of hope. But the reality of it is, on the ground, by a lot of people`s assessments, this is moving towards a one-state reality.

What you`re seeing on the ground is going to make it extremely difficult to withdraw settlements. You often hear these comparisons that Israel withdrew settlements from Gaza, that it withdrew settlements from Sinai in 1979 when it made peace with Egypt.

None of those, none of those were on the scale that we`re talking about when it comes to the occupied West Bank, in terms of the size of the settlements and the very nature of the settlers that are on there. In fact, there has been concern that trying to remove 600,000 settlers from the occupied Palestinian territories is essentially going to rip Israel apart. It`s going to lead to some kind of civil war.

KORNACKI: When you say one state, give us a practical sense what that means.

Israel claims the West Bank for its own and says this is now all Israel, and then the Palestinians who are living there become citizens? What does that mean?

MOHYELDIN: Yes, essentially, a one-state solution would look like the Israeli government passing a law that would essentially annex all of the territory and the people that live on the West Bank, including East Jerusalem, including the Gaza Strip, and ultimately give them full citizenship rights, which means that they`re allowed to vote in Israeli Parliament. In Israeli law, they`re allowed to participate.


KORNACKI: But John Kerry said today, he said, if that happens, Israel faces a choice. If you`re one state, you can`t be both democratic and Jewish, because you would have a majority Muslim population.


And there`s not a majority Muslim population, but a majority Arab population. And that`s different. And so that is the concern, because you would not be able to preserve the Jewish identity of the state that Israel wants to preserve through democratic means if you have a majority of the population that is non-Jewish.

At that point, you`re entering into the second part of John Kerry`s straight ahead, which is undemocratic. You would have a state that could enforce its Jewish nature, but it would not be doing so in a democratic fashion. It would be doing it in any kind of fashion.

And that is where you wouldn`t be able to have it. The bottom line is, there are three components to this. You have the Jewish nature of the state of Israel. You have its democratic nature, and you have the occupation. You can`t have any three of those exist at any point.

You have got to choose. Either Israel is going to choose to be a democratic state and it has to give up the occupation, so it can preserve its Jewish state, or it`s got to hold onto the occupation, but then it lets go of the democratic nature that it claims to have, and it only remains a Jewish state with an occupying power over the Palestinian lives that are there.

KORNACKI: All right, Ayman Mohyeldin, Betsy Woodruff, thanks to both of you for joining us.

Up next, the United States is getting ready to retaliate against Russia for meddling in our election this year, what that could look like. That`s next.

And this is HARDBALL, the place for politics.


KORNACKI: Welcome back to HARDBALL.

Two senior White House officials have confirmed to NBC News that the White House will soon announce how it intends to punish Russia for meddling in the 2016 election with a public statement coming as early as tomorrow or Friday.

As "The Washington Post" first reported, the measures will entail economic sanctions and diplomatic censure. They are also expected to include covert action that will probably involve cyber-operations.

Reacting to the news, the Kremlin today called the threat of new sanctions a provocation directed by the White House. It is already promising to retaliate in turn.

This comes after president-elect Donald Trump has repeatedly sided with Russia over the unanimous conclusion of U.S. intelligence agencies. Trump`s position has put him at odds with Republican lawmakers like Senator Lindsey Graham, who yesterday expressed frustration with the president- elect.


SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Reince Priebus said that the president-elect would accept the results if all the intelligence community is on the same sheet of music.

Well, now the FBI, the CIA and the D.I., director of national intelligence, all are saying the same thing.


KORNACKI: And Graham`s colleague Senator John McCain said he expects Trump will come around.


SEN. JOHN MCCAIN (R), ARIZONA: I think he will be -- when presented with the overwhelming evidence, change his view.

If they are able to undermine an election, they are able then to undermine democracy.


KORNACKI: And I`m joined now by Mike McFaul, former U.S. ambassador to Russia.

Thanks for taking a few minutes.

Let me start with this. We have so much reporting in the last few week, the last few months. And it always tends to be anonymous, whether it`s coming from the CIA or coming from the FBI, coming from the intelligence community, painting a picture of unanimity here.

At the same time, you have Donald Trump coming in basically saying he rejects it. He does not accept that conclusion. He has invoked more than once the idea that, hey, the intelligence community was unanimous and wrong when it came to Iraq and WMD back in 2002.

So, if there is going to be some formal retaliation here from the United States, does there need to be a public airing with real names, real titles real agencies on it of what exactly Russia did and how exactly that is different than what Russia or any other adversary has done in the past?

MICHAEL MCFAUL, FORMER U.S. AMBASSADOR TO RUSSIA: I think there has to be. And that`s the good news.

When you hear reporting that there will be economic sanctions, that means that they have to identify somebody or some organization to sanction. You just don`t sanction Russia. You sanction individuals, organizations and even companies. Right?

And so to make the case, they`re going to have to give us some more detail about attribution. And I think that`s a very important step, because, tragically, in my opinion, there are still a lot of Americans that don`t believe that the Russians did this, including perhaps even the president- elect.

And, therefore, establishing the facts to make the case to justify economic sanctions, that is going to be a big step forward.

KORNACKI: And it seems like already just in that setup there, you can see potentially a pattern setting in here of response and escalations.

You have Russia -- you have the intelligence community believing Russia meddled in our election. Now we have the potential for a U.S. response, and already a threat coming back from Russia that, hey, if you do that, we are going to do something else.

So, a two-part question here. First of all, what specifically -- we have the idea here of sanctions, also apparently some covert activity. What specifically do you think the U.S. will be doing here in response? And what kind of response can we then expect from Russia? If they already tried to meddle with our election, what is the next thing they do to us?

MCFAUL: Well, with respect to economic sanctions, I`m assuming that there will be a list of individuals or companies or maybe agencies, maybe one of the agencies that was involved, but probably individuals, because that`s where sanctions -- that`s what we did in the past when Russia annexed Crimea and then supported separatists in the Eastern Ukraine.

And then the Russian government responded with their own list. In fact, I know it well because I was one of the people on that list. And they then, in a commensurate way, put Americans on the list in retaliation.

With respect to covert operation, of course, I can`t talk about that. I don`t know what they`re going to do. And if I did know about it, by the way, I couldn`t talk about it anyway.

And that`s the problem with those kinds of responses is because it doesn`t have the same deterrent effect for other actors. Let`s remember, the Russian government is not the only actor capable of doing these kinds of things in our elections. There are other countries and maybe even other individuals.

And so we`re not going to know the details of that. And most certainly we won`t know the Russian response either.

KORNACKI: And is this -- do we end up looking at this as a three-week blip, whatever response the Obama administration comes out with? Or is this something that will last, do you think, past January 20?

MCFAUL: I certainly hope it lasts past January 20. It can`t just be a set of sanctions and then we walk away and say we`re good, because the Russians and other actors have tremendous capability to interfere in our domestic politics, to interfere in many ways, not just our elections.

We have only seen the tip of the iceberg, in my opinion. And so we need to have a real debate, a real investigation. I still think -- I applaud the Obama administration, but I still think we need a bipartisan, independent investigation of what happened, in part because we need to know what the Russians did.

But we also need to know how the Obama administration handled it. And then we have got a lot of other steps to take, not just a counter-response with sanctions, but first and foremost, I would say, to build up our resilience, so, in 2020, we have more capability to resist these kinds of interferences.

KORNACKI: All right, Mike McFaul, former U.S. ambassador to Russia, thanks for the time.

All right, and up next: Democrats facing big questions about how to deal with the reality of President Donald Trump. And there is a growing feeling in the party that they need to stop worrying about being nice. That`s ahead, along with a look at some of the potential Democrats who could take on Trump in 2020.

You`re watching HARDBALL, the place for politics.




As an opposition party under new leadership, the question for Democrats for the next four years is whether they can show the discipline that`s needed to effectively counter-balance the incoming Trump administration.

In a lengthy exit interview, outgoing Senate Minority Leader Harry Reid spoke to "New York Magazine". He offered a candid, even blunt evaluation of the Democratic Party`s prospects under a Trump presidency. Reid`s key message to his fellow Democrats is that it`s better to fight than to acquiesce.

Quote, "Be careful, because this is not all fun and games. Stuff Trump has said has been hateful and disruptive and crude and not helpful to anybody. And so, be careful what you agree with him about."

Reid also gave a particularly grim assessment of the Democratic bench of potential contenders to the White House in 2020. He said, "It appears we`re going to have an old folks home. We`ve got Elizabeth Warren. She`ll be 71. Biden will be 78. Bernie Sanders will be 79."

I`m joined now by the roundtable. Philip Bump is a political reporter with the "Washington Post", Jamil Smith is senior national correspondent for MTV News, Jeanne Zaino is a political science professor and pollster. None of have to give your ages, by the way, after that setup.

Well, let`s start first of all with the warning there. Reid is giving the fellow Democrats. He is saying, "Don`t acquiesce, fight." And I can`t help but think, there is a contrast there right away with Chuck Schumer. Chuck Schumer is taking Harry Reid`s job and Chuck Schumer has said, hey, there are issues we want to work with Trump on, we can work with him on. Infrastructure is one of them.

Is this Reid warning his successor, don`t do it?

PHILIP BUMP, THE WASHINGTON POST: Yes, I mean, I think pretty clear.

I mean, Harry Reid has always been sort of an outlier in his willingness to go, you know, to the mattresses over basically any and everything. But I mean, I think he recognizes that Donald Trump is a different sort of Republican president than most of the Democrats on Capitol Hill have seen or most of the country had seen.

And I think what he wants to do is he wants to try and impart some of his pugilistic tendencies on to Schumer to try on counteract what they can expect from Donald Trump. And I think the Democratic Party is more willing to do that than they probably were under George W. Bush, in part because the party itself is becoming more liberal, because it`s becoming more partisan. And the more partisan you are, the more willing you`re going to be to engage in those sorts of fights.

KORNACKI: Although, Jeanne, you look on paper. Look, Donald Trump, he has certainly said his share of inflammatory, provocative, whatever you want to use words. And he`s certainly put his share of proposals on the table that obviously I can`t see Democrats going along with.

On the other hand, this is a guy at least in rhetoric on the campaign trail who was not a doctrinaire conservative Republican on a lot of issues. Infrastructure being one of them, Medicare, Social Security, at least on paper. There`s got to be some tempting areas here if you`re Chuck Schumer, if you`re Democrats in the Senate.

JEANNE ZAINO, POLLSTER: There has to be. And let`s not forget, Chuck Schumer also wants to take back the Senate or at least retain what they have in the Senate. So, he`s got to be very careful about those ten Democrats who are in now Trump territory and going to be up in two years. So, that`s a big problem for him.

But I think the setup here is wrong and I disagree with what Harry Reid is saying. This is not for the Democrats who have suffered the worst losses since 1928. This is about, do you acquiesce or do you fight? This is about, you are a party that who has to stand for something and attract voters. That`s what this is about. And that`s where their focus should be.

It should not just be on opposing Trump. It should be on standing up and telling the people what they are going to do for them and what they stand for.

And that`s where this whole issue of age makes me laugh. This campaign showed us a few things. One of them is you look at Bernie Sanders and Elizabeth Warren, this is not about age. This is about standing for something and I think that`s what the party should focus on as they go into this next year.

KORNACKI: What do you think they should do, Jamil? If it`s next February, March, whatever it is, Trump comes to Democrats and says, I want to do infrastructure. I want to do the shovel-ready jobs. Remember, talk about those with the stimulus, I want to put money into this. I want to put federal money. What would they do?

JAMIL SMITH, MTV NEWS: I`ll tell you, I`d say two things. Number one, show me the plans. And then when the plans come, tell him no. Because inevitably, the plans -- we`ve already seen what the infrastructure plan that he`s put. It`s basically a big giveaway to private donors. And so, it`s not really the Democrats` plan for infrastructure. It`s not actually going to create the same kind of jobs that they would create.

So, what I think they need to do is oppose, oppose, oppose. Get in his way and resist. I think the only way that they`re going to do that and be effective is to really just make it clear to him that, hey, none of this is -- we`re not going to negotiate. We`re not going to acquiesce. There will be no talking about it.

KORNACKI: Who are the leaders here? So, Harry Reid doesn`t like the old folks. He doesn`t like Biden, Warren, Sanders, being the faces of the party. OK, but I`m thinking about it. Who else is there?

I mean, Chuck Schumer is going to be leading in the Senate. He`s not running for president. Who else is out there to look at as the leader over the next four years?

BUMP: I mean, this is the key question the Democrats have been facing for some time. I keep remembering though that Barack Obama came out of nowhere to be the presidential nominee in 2008. A lot can change over the course of four years. But it`s a totally valid point.

I mean, but I do want to go back to something he just said. There is always, I mean, this is politics. There is always a way that you can fight. These fights are a good way actually for those leaders to emerge.

But you can always take something that`s been proposed by your opponent and find a way to fight over it while still acquiescing on the things that you like. If you fight over those things longer and longer, more people rise up to the ranks of politics, maybe that`s where you can rebuild --

KORNACKI: I mean, I`m just looking at it. I mean, if you`re Chuck Schumer and you`re listening to Harry Reid say this and you`re looking at that map in 2018, look where some of these Democrats are up in 2018, Indiana, North Dakota, West Virginia. You have Democrats who have to run in states where Trump won by 20, 30 points. So that idea -- I don`t know united a front you can put up.

ZAINO: It`s going to be very difficult to keep that coalition together, he`s got the benefit that is small, he says an easier shot. But that`s not a good thing to say in politics.

But again, I would go back to the fact that Democrats have to appeal in these places. President Obama said it himself. They have to stand for something.

And you`re absolutely right, I agree, they can say, we want infrastructure reform, but we want to serve the people when we`re doing it. Not the special interests. So, there is a way to do both of these things.

You can`t just be speaking to the -- you can`t just to be speaking to Washington. Democrats are so behind on their bench. They don`t have leaders to look to right now. Harry Reid is right about that. They need to build that bench at the state and local level and they need to build it now and that requires having a message to give to voters that has been wholly absent in the last four years.

KORNACKI: Can you think of a name? Is there a name --

SMITH: Yes. I mean, you think of Sherrod Brown. You think of Amy Klobuchar. You think of Kirsten Gillibrand, who have taken hard tough stances on tough issues. You think of mayors like Kasim Reid in Atlanta and governors like John Hickenlooper in Colorado. There are names out there. You can`t just say that like the people can`t hit if they never get a chance to see them come off to the plate.

KORNACKI: All right. We`re going to take a quick break. The roundtable is staying with us.

When we return, more of the transfer of power now maybe hitting a bit of a rough patch. This is HARDBALL, the place for politics.


KORNACKI: Well, Donald Trump today gave himself a high five on some positive economic news. He wrote on Twitter, "The U.S. consumer confidence index for December surged nearly four points to 113.7, the highest level in more than 15 years. Thanks, Donald." It was on Donald Trump`s Twitter.

But according to Gallup, there`s a partisan reason for the rise in economic confidence. It comes mostly from Republicans who are more positive since Trump`s victory in the election. Gallup`s polling shows that Republicans consistently took a negative view on the economy and its future during President Obama`s two terms in office.

We`ll be right back.


KORNACKI: All right. We`re back with the HARDBALL roundtable.

Philip Bump of the "Washington Post", Jeanne Zaino of NYU, Jamil Smith of MTV.

We`re talking about the rocky transition, at least it seemed rocky this morning. Then Trump talks to Obama and everything`s fine. I do think, though, we were talking about this earlier, Philip, that this is -- we`re seeing something about Trump`s style here. He doesn`t like something, he airs it on Twitter. Today, it looks like he got the president`s attention and he got what he wanted, at least today.

BUMP: Right. I mean, with Donald Trump, everything is either the absolute worst or the absolute best. This morning, the transition was absolutely worst, speaks to Obama, and now, it`s the absolutely best. And I think it`s important for all of us to keep in mind, there`s very little middle ground between those extremes and it can change quickly.

KORNACKI: And I think that`s there`s a lesson there maybe. You`ve got to have four years of Donald Trump on Twitter doing this in terms of how to interpret this stuff when it happens.

ZAINO: Yes, absolutely. And the state of the transition depends on who you`re talking to and when because it seems to change by the hour, according to Donald Trump himself. But I think the real fact is most people in the United States are not paying attention to the state of the transition. This is not something people care about.

So, he`s tweeting and I think at some point, this starts to get old fast and he`s going to have to focus on things that people really do care about, because at this point, it`s pretty much the press that focuses on his every word on Twitter.

KORNACKI: By the way, I`ve not been on Twitter in 12 days.

ZAINO: Not you.

KORNACKI: I have to tell you, this has been the best 12 days of my life. I might extend this another few.

We guys have to squeeze one more break in. The roundtable is sticking with us.

Next, these three will tell me something I don`t know. You`re watching HARDBALL, the place for politics.


KORNACKI: All right. We`re back with the HARDBALL roundtable.

Jamil, tell me something I don`t know.

SMITH: Yes. Well, the University of Wisconsin has a new class. It`s called the problem with whiteness. And so, this is a class that`s actually designed to get to the roots of white supremacy and understand like how whiteness has been defined over the years. But a Republican state assemblyman is now threatening the University of Wisconsin`s state funding because of the class. It says that white people are racists, which it doesn`t.

KORNACKI: All right. I did not know that.


ZAINO: I want to take Donald Trump back to his promise to create jobs and I want him to focus on the real job killer which is automation. Not China, not immigration, not globalization, 45 percent of our jobs can be done by automation including all of ours. And so, he should address that if he wants to bring jobs back.

KORNACKI: All right. Philip?

BUMP: So, it seems very clear that Barack Obama now sees his primary legacy besides Obamacare as being the environment. He said aside another millions more acres today for national monuments. He`s used the Antiquities Act more than any other president beside FDR. He`s catching up to FDR. He has 2-1 ratio of acreage set aside, versus every other president.

It seems very clear that this is something he wants to do. And going back to Harry Reid, one of the monuments set aside today was a big one for Harry Reid.

KORNACKI: OK. If automation gets here by tomorrow, New Year`s weekend, it won`t be the worst thing.

Anyway, Philip Bump, Jeanne Zaino, Jamil Smith, thanks for being here.

That is HARDBALL for tonight. Thank you for being with us.

"ALL IN WITH CHRIS HAYES" starts right now.