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Shutdown enters 3rd week, TRANSCRIPT: 1/7/2019, Hardball w. Chris Matthews.

Guests: John Brabender; Ted Lieu, Sahil Kapur, Charlie Sykes, Corey Lewandowski, Terry McAuliffe

Show: HARDBALL Date: January 7, 2019 Guest: John Brabender; Ted Lieu, Sahil Kapur, Charlie Sykes, Corey Lewandowski, Terry McAuliffe

CHRIS MATTHEWS, MSNBC HOST: A Trumped up emergency? Let`s play HARDBALL.

Good evening. I am Chris Matthews back in Washington.

We are entering day 17 of the government shutdown which at midnight tonight will become the second longest shutdown in American history. And now the President must either buckle to House speaker Nancy Pelosi or continue to obey right wing hardliners like Rush Limbaugh who pitch forked him into this situation in the first place.

With no way out, President Trump announced today he will make his first prime time address from the oval office tomorrow night. Will it be to declare a national emergency? He is planning to follow up his address tomorrow night with a visit to the southern border on Thursday, all to rally public opinion to his side. It comes after the President threatened to declare a national emergency when talks led by vice president Pence failed to yield any results over the weekend.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We are looking at a national emergency because we have a national emergency. Just read the papers. We are looking at it very strongly. But hopefully we can do it this way.


MATTHEWS: While the President said the government could be closed for months or even years, his administration is already struggling to cope with the mounting fallout.

According to "the Washington Post" quote "administration officials have acknowledged that they were not prepared for the potential consequences of an extended shutdown. And Trump`s decision to demand wall funding.

Furthermore, the President has been engaging in debate over semantics when it comes to his definition of the wall. He now says he will build it out of steel rather than concrete, which he said is a concession to Democrats.


TRUMP: I informed my folks to say that we will build a steel barrier, steel. It will be made out of steel.

UNIDENTIFIED FEMALE: Why do you think that Democrats would like the steel border?

TRUMP: They don`t like concrete, so we will give them steel. Steel is fine. Steel is actually more expensive than concrete, but it will look beautiful and it is very strong.


MATTHEWS: However, speaker Pelosi has made clear the Democratic Congress will stand firm.


REP. NANCY PELOSI (D), HOUSE SPEAKER: The impression you get from the President that he would like to not only close government, build a wall, but also abolish Congress, so the only voice that mattered was his own.


MATTHEWS: I am joined now by Ted Lieu, Democratic Congressman from California. Shannon Pettypiece, White house correspondent for "Bloomberg." John Brabender, a Republican strategist.

Let`s hear from the congressman first. As a lawmaker, sir, what do you make of the possibilities that perhaps like John Kennedy and the Cuban missile crisis, this President is going to sit there in the oval office tomorrow night, reading a script that calls for him to declare a national emergency, perhaps then shifting billions of dollars from the defense fund to the wall? What do you make of that constitutionally, sir?

REP. TED LIEU, (D-CA), JUDICIARY COMMITTEE: Thank you, Chris, for the question. Let me first say my heart goes out to victims of the tragic mass shooting in my home town Torrance this weekend.

Now specifically on your question, I served the military on active duty. I was a jag. I studied this issue. And it is my opinion that it would be illegal for the President to use military to go build a wall simply by declaring a national emergency. It would violate the act. The military members will be following an illegal order, subjecting them to being at risk of violating federal crime. This is a very big deal. I hope the President doesn`t declare a national emergency to build a wall.

MATTHEWS: Looking at his impulsive manner of govern, looking it the way he governs from that in place to its choir, how do you -- have you any confidence he won`t do it because he fired his attorney general, he fires his defense secretary, he fires his chief of staff. Anyone gets in his way and says you can`t do this, Mr. President, he gets rid of. You say he can`t do it.

What about - he has nobody. Who in the White House? Mattis is gone. Mad dog is gone. Nobody can stop him. His guy McGahn is gone. His White House attorney who used to say no to him once in a while, he is gone. Is this going to go to the courts? He declares a national emergency, directs a shift of billions to the wall and then what happens to the constitution, sir?

LIEU: Our framers were very wise and they created three branches of government. I am convinced the courts will stop the President if he were to declare a national emergency to build a wall. The framers of the constitution gave Congress, specifically the House of Representatives, the power of the purse. The President can`t go around that power simply by making up a national emergency and appropriating the funds that Congress specifically didn`t authorize.

And this national emergency is completely made up. If you look at the facts, violent crime is down across the United States, property crime is down, immigrants commit less crime, and border crossings are down. The President is going to lose in court.

MATTHEWS: Congressman, one last question. I mean, this is cruel. But have you looked at the makeup of the United States Supreme Court lately? And what gives you confidence among those nine people that the five of them won`t do what they have been doing for years, ever since the Gore fight back in 2000 when they gave the election to W. What gives you any confidence they won`t just do what the President tells them to do and authorize that shift of money from the defense department to the wall?

LIEU: I believe this would be a step too far, even for conservative jurists on the Supreme Court. Again, the House of Representatives alone has the power of the purse. The President can`t go around that simply by making up the national emergency. I think the courts would strike it down, regardless whether they`re conservative or liberal.

MATTHEWS: OK. Let me go to Shannon on this, first.

Shannon, you have been talking about this, reporting on this. It does seem to me he is asking for national time tomorrow night. You don`t get prime time money or time, it is money really, from the networks, the broadcast network unless you have news to announce. He is not going to go out there and just beat the drum on the war threat - I mean, wall threat.


MATTHEWS: He is going to have to come out with news. And I think you are right. I think we have been talking about he is going to go with a national emergency and say I wanted to do it a different way, but Nancy Pelosi won`t let me. I`m doing it this way.

PETTYPIECE: Yes. They are doubling down on their strategy here. They see this as a winning political hand. They see that immigration is the number one issue among Republican voters, including the President`s base. They are feeling no political pressure. So go out there on prime time, declare a national emergency, go visit the border, play it up as hard as you can because they don`t see the political consequences from it yet.

The President believes very much that the majority of federal workers who are affected by this are Democrats in D.C. and Maryland.

MATTHEWS: Yes. And he goes to the national emergency route tomorrow night, and shifts the funds, doesn`t that end the standoff about the government staying open or not?

PETTYPIECE: I mean, we really have no idea because we are kind of in uncharted territory here. It is possible he could declare a national emergency and shift money for things other than a wall, things to help with medical treatment or temporary housing. But to use it as a way to elevate the platform, tell people there`s this emergency at the border and get people fired up about the issue.

MATTHEWS: Let`s get back to the facts about reality here and about whether there are many terrorists across the border or not. I mean, there`s always an ethnic issue about people coming from Mexico and Latin-America. We know the politics about that, in states where it does offend people or concern them. White house press secretary Sarah Sanders was challenged yesterday when she said that thousands of terrorists have entered the country through the southern border. Let`s watch that.


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: We know that roughly nearly 4,000 known or suspected terrorists come into our country illegally, and we know that our most vulnerable point of entry is at our southern border.

CHRIS WALLACE, FOX NEWS ANCHOR: Wait. I know the statistic. I didn`t know if you are going to use it but I studied up on this. Do you know where those 4,000 people come or where they are captured? Airports.

SANDERS: Not always.

WALLACE: The state department says there hasn`t been any terrorists coming across the southern border.

SANDERS: It is by air, it is by land, and it is by sea. It is all of the above.

WALLACE: They are not coming across the southern border, Sarah. They are coming and they are being stop at airports.

SANDERS: They are coming in a number of ways. Certainly I am not disagreeing that they are coming through airports.


MATTHEWS: I am not disagreeing after saying they are coming across the border.

As a follow-up NBC News has reported today that U.S. customs and border protection counted only six immigrants in the first half of the last fiscal year whose name are on a federal government list as known as suspected terrorists, just six. That`s according to data provided to Congress last May.

John Brabender, I know -- I assume that the reason he keeps calling about terrorists because - then he can say to people, well, they are not prejudice against the Spanish. They are just worried about terrorists. But there is no terrorist threat from the southern border.

JOHN BRABENDER, REPUBLICAN STRATEGIST: Well, first of all, there`s multiple problems with the southern border. Terrorist is one.

MATTHEWS: What about --? It says one of the problem.

BRABENDER: One thing we learned on 9/11, even if it is a handful of terrorists, we don`t want to be in a situation saying why didn`t we do something about it. So whether it is a thousand or whether it is 500.

MATTHEWS: A wall is going to keep out terrorists.

BRABENDER: Well, that`s number one.

MATTHEWS: No, really. Honestly, John Brabender. And you are smart. Are you telling me that the wall --.


BRABENDER: Let`s add some of the other things the President say. Last year in America, 100,000 Americans were rushed to ER because of heroin. Three-quarters of the heroin comes in to this country from the southern border. There`s 20,000 children in Central America and Mexico that are being pushed to America that are part of sex trafficking. We have that problem.

And then you talk about gangs. Go to Long Island. Talk about the children killed in Long Island by gangs that are coming here. And you understand that we do have an emergency. We have American lives.

And everybody forgets, they are saying well, the President shouldn`t call this, couldn`t get this $5.7 billion, why was it all right for the Obama administration to randomly give $1.7 billion to the Iranians in cash for basically a ransom, and nobody thought --


MATTHEWS: Congressman Lieu, this is all over the place. But the question of national emergency is not something to be argued about. There is an emergency or it is not. Is it appropriate for the President to talk in such language?

LIEU: Absolutely not. There is a crisis though in health care and infrastructure. That`s what Democrats want to work on. Instead, we are having this big distraction of this manufactured crisis that doesn`t exist on the southern border.

Again, if you look at the facts, crime is down, both violent and property crime. Immigrants, both documented and undocumented, commit less crime, and Democrats support border security. We just don`t support any phishing and wasteful fourth century wall. So we can prevent a lot of these things from happening at the southern border with much more efficient mechanisms. That`s why we are having this argument because Trump wants his vanity wall.

MATTHEWS: Shannon, it seems to me the news, and I have been away a couple weeks. But the big news to me is this has reach ahead. Nancy Pelosi is not somebody to be played with. She has a mandate from the voters this past November. She has a whole new crop of women, a lot of young women, a lot of people on the left, a lot of people that did not come to Congress to play ball with Donald Trump. They don`t want me. They don`t want deals.

PETTYPIECE: Yes. I don`t think it is coming to a head. I mean, I think this just got started a couple of days ago. And it has not come to a head because neither side is feeling any political pressure.

MATTHEWS: Well, that is why is Trump going to this national television address tomorrow night?

PETTYPIECE: To speak to his base, to speak to Republicans. I mean, I think John`s point is sort of you can argue with it or not, but the Republicans perceive immigration as a major issue. You can argue whether or not it should be perceived as a major issue, but they feel it is. So while most of the Americans will probably tune out a national address from the President in prime time, you speak to Republicans who see the President --

MATTHEWS: OK. We don`t have a minute. I want to put a question about the -- do you think the President, at least you can war of attrition, just waited out. I don`t think so. This thing about the garbage piling up and the paychecks not being delivered, and people not getting tax returns, they are not getting their returns, this thing is going to get worse and worse for the President. Isn`t it smarter for the move now and break this thing up with the national emergency declaration? It seems like that`s what he is thinking. Can`t win a war of attrition.

PETTYPIECE: Yes. But then it just kicked into court. I mean, who knows what happens then?

MATTHEWS: John, can he win a long term shutdown?

BRABENDER: well, he is taking a good step. He knows he has a bigger megaphone to the national people than Nancy Pelosi does. He is going to use that to redefine, and not talk about a wall, but talk about national security and the importance of keeping America safe.

MATTHEWS: What`s he going to do? You can`t just talk.

BRABENDER: What he is going to do is he is going to layout the case of why there is a national problem -- emergency, and say I don`t want to start there, but the Democrats don`t care about your security. If they refuse to do something about protecting your family, I will.

MATTHEWS: Congressman, last word to you. And the question, what would be so rebuttal? What would be the ultimate response tomorrow night at 9:20 or so after the President has spoken that will be on this network. What will the Congress do if the President says I am shifting a couple of billion bucks from money spent to defend this country to build the wall? What will Congress do, just wait for the courts?

LIEU: I believe the House of Representatives would sue. In addition, what we have here is the House of Representatives passing two versions to reopen government in terms of bills to the U.S. Senate. One last month that had wall funding, one last week that didn`t have wall funding. So really you have a Republican controlled Senate that is not acting on either of these packages. And it is really Republican senators that are just as at fault as the President is in having this unnecessary shutdown that`s harming a lot of Americans.

MATTHEWS: For a President to arbitrarily take billions of dollars which has been earmarked for national defense and shift it to a wall, is that an impeachable offense? Would that be an article?

LIEU: Yes. It could be. And the Supreme Court in 1953 struck down President Truman`s national emergency where he tried to seize or steel mills, saying you can`t make-up a national emergency and do something that you couldn`t do normally. And we will see tomorrow as the President may be trying to get a face saving way out so he can throw this under the courts.

But if he wants to reopen government, that`s great. And if he wants to reopen government and then declare a national emergency, and then we have the courts battle it out, that`s something I can live with because we shouldn`t harming all these Americans as well as our national parks and people who are at risk of losing their homes --.

MATTHEWS: You said it could be impeachable. What would be the condition for it being impeachable? What would make it impeachable?

LIEU: That is if his advisers told him this is illegal and he went and did it, and then put military personnel at risk of following a legal order, and committing federal crimes. That`s a pretty significant obligation of the President to protect military folks as well.

MATTHEWS: Thank you so much.

U.S. congressman Ted Lieu of California, Shannon Pettypiece of Bloomberg and John Brabender of the Republican Party.

Coming up, President Trump stuck between Pelosi and Limbaugh. The cracks within the Republican Party are starting to show, don`t you notice?

Plus, Trump says he can relate to furloughed federal employees who are struggling to pay their bills. He can relate to that, he said. Former Virginia governor and possible 2020 contender Terry McAuliffe comes here to talk about that questionable claim.

And Elizabeth Warren drew big crowds in Iowa this weekend and setting herself up as the progressive candidate. What does it mean for the rest of the field?

Finally, let me finish what looks like the opening right now of the 2020 Presidential season.

This is HARDBALL where the action is.


MATTHEWS: Welcome back to HARDBALL.

Two years into his administration, Donald Trump has settled into a governing style that comes from the gut and preaches to the choir. The current shutdown over the wall illustrates that perfectly.

Chris (INAUDIBLE), chief executive of News Mags (ph) and friend of President Trump told "New York Times" that Trump is very obsessed about carrying out his campaign promises, to a degree that`s unhealthy because it is important to him.

However, as real world consequences continue to pile up, the cracks within the Republican Party are starting to show.

On Friday, Colorado Republican Cory Gardner called for the government to be reopened. Let`s watch.


UNIDENTIFIED MALE: I just want to be super clear here though. You calling to reopen the government now, even if the wall issue isn`t entirely solved yet, getting the government reopened now.

SEN. CORY GARDNER (R), COLORADO: The reality is this. The Senate appropriations bill has the wallet. Yes, let`s get the government open so we can have a bigger fight for the rest of the funding anyway. That was going to happen whether or not you got $5 billion or more. I support getting the $5 billion. I support getting more. But let`s get the government open.


MATTHEWS: And earlier today, Maine Republican Susan Collins tweeted, the need to end the partial government shutdown is urgent. Lives are being affected by this impasse. Congress should reopen much of the government immediately while negotiations continue.

For more, I`m joined by Charlie Sykes, editor in chief of The Bulwark, and Corey Lewandowski, senior adviser to the pro-Trump group Great America Committee. He is also a former campaign manager for Trump`s 2016 campaign.

I don`t know.

Charlie, you`re inside.

You`re inside.

I get the feeling -- used to be inside.


MATTHEWS: I got a feeling that, finally, Trump`s up against his own government a bit here, because, when you`re the majority in the Senate and you`re president, you`re sort of responsible for being chief executive and making things work, you know?


MATTHEWS: And now you`re saying the government of the United States is just going to sit there and atrophy, while the garbage piles up and people don`t get their paychecks this Friday. And it`s your fault.


MATTHEWS: That`s a crack in this cement, I think. Your thoughts.

SYKES: And for the wall that Mexico was going to pay for that is now, what, basically a Venetian blind.

Look, the wall is a depreciating asset for the president, because it`s a costly, unnecessary boondoggle that would be ineffective, that he has surrounded with a bodyguard of lies, because he`s constantly changed the rationale for it, the nature of it.

And, at a certain point, even loyalist Republicans who want to stay in his good graces are looking around and saying, how much damage are you going to create for something that was basically a misleading slogan at a campaign rally? How much damage are you going to do?


SYKES: How much damage to the federal government are you going to do? How much damage to the economy are you going to do? Are you going to provoke a constitutional crisis over really what was a symbol that, the more you think about it, it`s not going to stop illegal immigration, it`s not going to deal with drug-dealing, it`s not going to have anything to do with people who overstay their visas?

But he is committed to it. And that`s where we`re at right now. I think it gets worse as time goes on.

MATTHEWS: Corey, what is Trumpism?

Because part of it is, get off my back. We don`t Dukakis. We don`t like Mike Bloomberg and his 16-ounce Cokes. Just get off of us with the nanny. Stop telling us what to do.

And here`s Trump talking about eminent domain. He`s going to go down along the border of Mexico and start grabbing land down there from private ranchers and saying, I`m putting up a concrete wall, whether you like it or not.

That doesn`t sound like...


MATTHEWS: Oh, steel, right.


MATTHEWS: That`s the Democrat alternative.


MATTHEWS: It doesn`t sound like the Trump version of how the government should be operating. Small government, no. Big government.

LEWANDOWSKI: Look, I think this president has made a commitment to the American people.

And his most important job is to keep those people safe. And if that means stopping people from crossing the border illegally that are committing crimes, whether they`re killing police officers in California or they`re killing the sons of firefighters last weekend.

MATTHEWS: When did this happen? This didn`t happen until Rush Limbaugh blew the whistle on him.


MATTHEWS: That`s when it started. And Laura Ingraham.

LEWANDOWSKI: Chris, you can go and talk to the families of the victims of illegal immigrants who have died.

And one American is one too many. And, look, we are a nation of laws.

MATTHEWS: Wait a minute. Wait. The government shutdown resulted from what Limbaugh said on the air and what Laura Ingraham said. And then the president said, we`re going to shut the government down.

It wasn`t his initiative.

LEWANDOWSKI: But the president has never wavered from the fact that he`s going to put a wall on the southern border. He`s talked about it for two years.

SYKES: But Mexico was going to pay for it.

LEWANDOWSKI: He`s talked about it for two years. And where we are now is, look, the partial government shutdown that is effect right now does not prohibit people from getting their tax returns. We know that`s going to continue.

People are still going to get their paycheck. The people who are furloughed are going to get their paychecks afterwards.


MATTHEWS: If Congress reapportions the money.

LEWANDOWSKI: But it`s very -- Chris, what I don`t understand is, this was a Democrat issue when Barack Obama was in office. And now they conveniently forget the fact that they all voted for that, including Hillary Clinton, including Barack Obama, all said, look, we want a wall on the southern border. We want a barrier down there.

And we have heard from the law enforcement officers who protect the border every day. And they have said, we want help, give us something. And if we can rely on them, who protect us every day, who do we rely on?

MATTHEWS: Charlie, I think this is cracking up. I think every day that passes, Trump`s weaker.

SYKES: Right.

MATTHEWS: Your thoughts?


And if this was such a good idea, why are there so many lies about it? The -- why do they misrepresent it? Look, there is no crisis at the border. One of the things that Donald Trump successfully did back in 2016 was to conflate illegal immigration with terrorism.


SYKES: And so he creates this narrative of the terrorists coming across the border.

There were only six people stopped at the southern border...

MATTHEWS: What do you say to that?


SYKES: And, by the way, many more for -- at the northern border.

MATTHEWS: What do you say about this lie that Sarah Sanders was pumping at Chris Wallace?


SYKES: There is no crisis.


LEWANDOWSKI: Secretary Nielsen talked about it today.

And what she said was, we have apprehend more people at the airports than we have at the border crossing on the southern border.


LEWANDOWSKI: But what we also know -- well, Chris, what we know is, maybe one of those people is the individual who would have not killed Officer Singh in California.

Maybe it would have been the individual...


MATTHEWS: Well, we would know that by now. We would know that by now, Corey. This was last year.


LEWANDOWSKI: If we would have stopped that person killed the fire chief`s son.


MATTHEWS: But that speculation is irrelevant, because we know that they`re not -- they weren`t terrorists, because they were not on the watch lists.

LEWANDOWSKI: These are individuals who were deported on multiple occasions, still found their way back into the country.

MATTHEWS: So, what the about the 4,000 figure? Where did you get the 4,000 figure from?

LEWANDOWSKI: Look, Secretary Nielsen said...


SYKES: She made it up.

LEWANDOWSKI: She said it was an old report.


SYKES: Now, look, this is -- this the Vesuvius of B.S. that we have had to deal with here.

And there -- facts are inconvenient things. The reality is that the number of arrests at the border are down dramatically from what they were in the year 2000. There were like 1.6 million. Now they`re down to about 310,000.

Illegal -- even illegal immigrants to get across the border commit crimes at a lower rate. But the president feels the need to create -- look, it was Rahm Emanuel who came up with the idea, right, don`t let -- a crisis is a terrible thing to waste. We need to exploit it.

He needs to create a sense of crisis to justify this costly boondoggle, which, as I said, the more people think about it, they -- are we really going to put a steel or a concrete barrier that`s going to cut -- cut millions of Americans off from the Rio Grande River?

Are we really seriously now sitting here talking about the military coming in and enforcing eminent domain? Does -- do the Republican Party want to preside over soldiers taking away Americans` private property?

MATTHEWS: Ask Corey, who is sitting here.

LEWANDOWSKI: Chris, Barack Obama`s own Government Accountability study in 2011 said 25,000 homicides, 42,000 robberies and 70,000 sex offenders were committed by illegals coming into the country.


SYKES: Over what period of time? Over what period of time?

LEWANDOWSKI: That is Obama`s own GAO study.

Now, we can question that if we want to. But those are the numbers that GAO came up with.

MATTHEWS: Do you support his action if he goes to the military?

LEWANDOWSKI: Absolutely, unequivocally.

SYKES: OK, that`s the crisis. That`s the constitutional crisis.


LEWANDOWSKI: There is no constitutional crisis.

The commander in chief, under Article 2, Section 2, he has full authority over the U.S. military.

SYKES: We have a constitutional system in which the Congress has the power to appropriate money.

For the president to assert that authority would be a massive power grab. It would create a constitutional crisis. And I think it would be an impeachable offense.


MATTHEWS: OK, let me ask you this. He has to answer to no one about that, Corey?

LEWANDOWSKI: No, he ultimately answers to the Supreme Court.

And if a federalist judge wants to come in and prevent the president from using the military on the southern border, then let`s take it to the Supreme Court and let them rule on it.

But, right now, it`s unequivocally clear.


MATTHEWS: I don`t know which way this Kavanaugh court is going to go. I`m not so sure about how they will stand up for the Constitution. I`m not so sure.

SYKES: Well, I think the chief justice would.

And I -- but I do think this is a real test for the Republicans in Congress on a constitutional basis, on a basis of small government, on the basis of protecting private property, all of those things, and the institution, because this would be a body blow to the separation of powers.

MATTHEWS: OK, I just want to get this constitutional question right.

Corey, your argument is, Pelosi won`t budge on building the wall. They can`t get it through the Congress. So the president can build the wall anyway. That`s what you say.

LEWANDOWSKI: What I`m saying is, the president...

MATTHEWS: He doesn`t have to worry about appropriations or the way the Constitution works with Article 1 and Article 2 and the balance of power and the branches of government. No more restriction.

You say the president has rights, as commander in chief, to take billions of dollars out of the treasury and spend it the way he wants to.

LEWANDOWSKI: What we know is that, since Jimmy Carter`s administration, 52 times, there has been declared a national emergency by president`s for various reasons. This could also be one of them.

A crisis on the border is a national emergency. If the president needs to use money that Congress has appropriated under the defense authorization bill, which is not earmarked...

MATTHEWS: And he can claim eminent domain? Let`s go all the way with this.

LEWANDOWSKI: He may absolutely use that.

MATTHEWS: And he can take the ranchers` land along the border of the United States with Mexico, take that land by right of what, his right as president, and spend all the billions he wants?

You believe the president of the United States has power like that?

LEWANDOWSKI: If you tell me that mayors and governors use eminent domain to put highways in, and we can`t use eminent domain to protect the American citizens, yes, I think he does have that right.

MATTHEWS: Well, I just hope we have a Supreme Court to stop this.

Anyway, thank you, Charlie Sykes. Thank you, Corey Lewandowski.

Up next: President Trump says he can relate to federal employees not getting paid during the shutdown. They got to make adjustments. He says, I know how to deal with adjustments.

I don`t know when the last time this guy was on a payroll or making about 60 a year, but these guys are crying over the situation. They can`t pay child support. They got problems.

Recent Virginia Governor Terry McAuliffe is going to come and talk about what it`s like to be a federal employee in this situation.

This is HARDBALL, where the action is.


MATTHEWS: Welcome back to HARDBALL.

As the partial government shutdown heads into its third week now, President Trump said yesterday he can relate -- I love that phrase -- to the pain of the nearly 800,000 federal employees who don`t know when they`re going to see their next paycheck.

Let`s watch him in action here.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I can relate. And I`m sure that the people that are on the receiving end will make adjustments. They always do. And they will make adjustment. People understand exactly what`s going on.

But many of those people that won`t be receiving a paycheck, many of those people agree 100 percent with what I`m doing.


MATTHEWS: Well, federal workers aren`t quite as optimistic about the situation. Here they are.


JEREMIAH MARTINEZ, FEDERAL GOVERNMENT WORKER: I don`t know what adjust means. We`re adjusting because we`re adjusting to pinch pennies where we have to.

My wife went in and applied for food assistance. This is how -- that`s not adjusting.

JOHN BUTKOVICH, FEDERAL GOVERNMENT WORKER: When you`re trying to raise a family, it just -- adjusting isn`t an option, when you went to go to work for the Justice Department with the -- kind of the thought you`re going to get paid every week, every two weeks, your paycheck will be consistent.

And it`s turned out not to be.


MATTHEWS: Well, a deal isn`t struck before the end of the day tomorrow, the next possible payday for these federal employees would be the last week in January, the last possible -- earliest one.

Joining me right now is Terry McAuliffe, the former governor of Virginia, a state with a large number of federal employees.

Governor, thank you for coming on, because it`s not just in this area, Washington, D.C., there`s a lot of them. I worked for a Utah senator years ago. There`s a lot of wage board guys out there, men, men and women, who get wages. They don`t get salaries. They don`t make much money.

These guys are talking about child support. The guy is crying.


MATTHEWS: I watched a guy crying today because he can`t pay for his food for the kids.


I had an event last night in Old Town, Virginia. A woman said, I can`t pay my rent. I don`t know what I`m going to do. You have got to help me.

I mean, people live paycheck to paycheck.

MATTHEWS: They do.

MCAULIFFE: And then to have Trump up there saying, I can feel their pain, if you believe the "New York Times" article, he inherited $200 million from his father when he was 17 years old.

Now, I don`t know about your father. I can say Jack McAuliffe, I paid my father`s bills off when he died. And I was honored and happy to do it.

MATTHEWS: You paid the bills.


MCAULIFFE: A lot of bar bills around Syracuse, New York.

But, I mean, honestly, these people are hurting it, but it`s his shutdown. I have said this consistently for two weeks. We cannot give him an inch. This is his deal.

MATTHEWS: OK. OK. Let`s talk about that kind of politics.

As President Trump digs into his request for a border wall, he continues to characterize the Democrats as the party of -- here`s the phrase -- you will hear it from now until the next election -- open borders. Here he comes.


TRUMP: Honestly, the Democrats, or most of them, it`s hard to believe, but most of them won`t open borders. And that leads to crime and it leads to other problems.

Yet the Democrats continue you to oppose border security, no matter how many innocent people get hurt or die.

If you want open borders, and if you want everybody to pour into our country, I would really have a great suggestion for you. Vote Democrat.


MATTHEWS: You know, that`s what he`s up to. What`s the response?

MCAULIFFE: Yes, I don`t think people are buying it.

They now know that -- what a compulsive liar he is. You have seen all the stories, 18 lies a day. People just don`t believe him anymore.

And I do think the opportunity for Democrats going into 2020, they want someone who tells the truth.


MCAULIFFE: First of all, they want their president to tell the truth. That`s the most important thing.

But, additionally, they want someone who`s an optimist and a realist. This man is a compulsive liar. He`s a lying populist. And I think people have figured that out.

But there are 800,000 people being hurt very badly today whose families are being impacted by it. And then there`s the ripple effect of so many other people who are being impacted. This was his deal. He wanted the shutdown.

MATTHEWS: OK, Terry, the only way he gets reelected is the game he`s playing right now.

MCAULIFFE: Of course.

MATTHEWS: The game he`s playing right now is, Democrats are all for open borders, abortion on demand. They`re for what? They`re going to tax everybody until they die.

You know what he`s going to do.


MATTHEWS: In an interview last night, newly sworn in U.S. Congresswoman Alexandria Ocasio-Cortez pushed a plan to move the United States from its use of fossil fuels. To do so, she said would require people to pay their fair share of taxes.

Here she goes.


REP. ALEXANDRIA OCASIO-CORTEZ (D), NEW YORK: You look at our tax rates back in the `60s, and when you have a progressive tax rate system, your tax rate, let`s say, from zero to $75,000 may be 10 percent or 15 percent, et cetera.

But once you get to like the tippy-tops on your 10 millionth dollar, sometimes, you see tax rates as high as 60 or 70 percent. That doesn`t mean all $10 million are taxed at an extremely high rate. But it means that, as you climb up this ladder, you should be contributing more.


MATTHEWS: What do you make of that? How`s that sound?

MCAULIFFE: I do think the wealthy should be paying more, no question about it.

MATTHEWS: Seventy percent?

MCAULIFFE: Seventy percent is probably not a number I would use.

Paul Krugman actually wrote a story today and agreed with the congresswoman.

But, listen, we have got to have...

MATTHEWS: But that who Trump will run against.

MCAULIFFE: Trump`s going to try and run against a lot of different things, Chris. I don`t think it really matters.

MATTHEWS: He ran against Pelosi, until Pelosi won. Then he stops running against Pelosi. I mean, you know what he does. He goes for what he thinks is the weak point in the argument.

What do the Democrats -- where do they stand on borders, if it`s not open borders? What`s the Democratic position? He says wall, wall, wall. What`s Democrats` answer? What are they for?

MCAULIFFE: Well, first of all, we have all wanted -- all -- everybody wants a secure border.

MATTHEWS: Do they?

MCAULIFFE: Absolutely want a secure border.

And that means using the latest technology, drones and hearing devices. There`s many different things that we can do. But he -- Chris, we`re not going to let him off the hook. He wanted a concrete wall. Let us not for a second -- and Mexico was going to pay for it.

He did not campaign for president saying, I`m going to build a wall, and you Americans are going to pay for it. No. How many chants? Who`s paying for it? And they all yelled Mexico.

Mexico is not paying for it. We want to secure the border. There`s no question about it. But your stories you have seen here about the number of folks who`ve come over, been detained, we had about 12,000 people who came through asylum last year, 8,700 the year before.

Chris, this is a manufactured crisis. During the midterms, we had Middle Easterners joining the caravans. They were coming to America.

MATTHEWS: Who are you running for? Are you running for president? You sound like it. Are you running? Why do you come on this show and talk like you`re running for president and not run?

MCAULIFFE: I have been pretty consistent with you through the years. I`m very passionate.

MATTHEWS: Are you running or not?

MCAULIFFE: I`m a very authentic...

MATTHEWS: I mean, I give it -- go ahead.

MCAULIFFE: I have been very consistent on the things that I believe in. I have been a strong Democrat my whole life.

MATTHEWS: I know that.

MCAULIFFE: And, listen, I have been very proud of the things that we have been able to do.

But we, as Democrats, we got to have a message out there. I go back to Virginia. Look at the success we had. We built a new economy, number one state in America for cyber-data, unmanned systems, kept our women`s clinics open.

We are a progressive state that has a booming economy.

MATTHEWS: Give me a date.

MCAULIFFE: That is what Americans want, a problem-solver.

MATTHEWS: Governor, give me a date when you`re going to decide whether to run or not.

MCAULIFFE: By the end of the first quarter.

MATTHEWS: This -- of this year, January, February, March?

MCAULIFFE: Yes, of course of this year, yes.

MATTHEWS: So, before the end of March, before St. Patrick`s Day?

MCAULIFFE: Yes, sure. Yes.

MATTHEWS: Before St. Patrick`s Day?

MCAULIFFE: Oh, now, St. Paddy`s, come on.

MATTHEWS: Come on, before...


MCAULIFFE: If the Dubliner were in Virginia, that might be a very good place to do with it with the green beer.


MATTHEWS: The Dubliner? Are you going to have breakfast with the vice president even if he`s running too?

MCAULIFFE: I hope Joe Biden runs. I think he`s going to run. I have had conversations. I think he`s going to run. And I think it`s great. I`m a huge fan of Joe Biden`s.

But the more, the merrier. I`m glad Elizabeth Warren`s in. She`s been a great consumer -- this is who the Democratic Party is. Get them all in. Let`s get our messaging out.

MATTHEWS: She`s a good consumer advocate? Is that what you were going to say?

MCAULIFFE: She has been a great advocate for consumers. She`s been a...

MATTHEWS: I know. I love the way you guys parcel out the encomium here. She`s really good with consumers.

Thank you, former Governor Terry McAuliffe...

MCAULIFFE: Thank you, Chris.

MATTHEWS: ... who may be a bigger deal than that, than a consumer adviser.

MCAULIFFE: I like the St. Paddy`s thing. That`s clever.

MATTHEWS: Up next: Elizabeth Warren`s getting into the earliest jump the 2020 race, barnstorming.

She`s so smart. It`s called the fast break in basketball. She`s taking the fast break. She`s out there working, hit that state and all its interesting parts of Iowa, doing everything right.

And you know what? You got to show that you want it. Look at her. You got to show you want it. What kind of impact will her early positioning have on the rest of the field?

You`re watching HARDBALL.



ELIZABETH WARREN (D), MASSACHUSETTS: The only way that we`re going to return this government to the people is if all of us are in this fight. I believe that this is a moment in our history and it is a moment we should not less pass. This is a moment when we should dream big, fight hard, and take back our country. Thank you. Thank you. Thanks for being here. Thank you.


MATTHEWS: Welcome back to HARDBALL.

Massachusetts Senator Elizabeth Warren testing her stump speech, didn`t you hear it, at one of multiple campaign stops over the weekend in Iowa. Warren is the first major candidate to officially announce that she`s running for president in 2020. But others may not be far behind.

"The New York Times" is reporting yesterday or today actually that former Vice President Joe Biden is in the final stages of deciding whether to run for president. According to "New York Times," Biden told a reporter: If you can persuade me there`s somebody better who can win, I`m happy not to do it, but I don`t see the candidate that can clearly do what has to be done to win.

Let`s bring in tonight`s HARDBALL round table. Kimberly Atkins, the Washington bureau chief of "The Boston Herald", Jonathan Allen is NBC News digital national reporter, and Sahil Kapur is political reporter for "Bloomberg".

All of you, just give me your take. Here is mine. Warren is smart to get in early. You get in, you establish all kind of things by being there.

You become, as they used to say, Golda Meir used to call them in Israel, new facts. OK, you`re the fact. You`re in the race. Bernie has to deal with this. Everybody is going to deal. Congress is going to deal with this. Cory is going to deal with this. Everybody, Kirsten Gillibrand, Kirsten.

You know, she`s in. What`s that do?

KIMBERLY ATKINS, WASHINGTON BUREAU CHIEF, THE BOSTON HERALD: You know, it depends, that`s what Jeb Bush did in 2016, and it didn`t end up working out so well for him. He was out early and thought he could clear some of the field, and he was one of the earlier one out --

MATTHEWS: He was low energy.

ATKINS: He was -- well, but look, Elizabeth Warren did well in Iowa. It was a good first step but the Democratic basis far broader, far more diverse than Iowa. So, she still has a lot of work to do. I don`t think the DNA test was great, but she has to be able to resonate with a vast, diverse number of different Democrats, people of color, people of different Democratic backgrounds, people of different geographic background.

So, it is still too early to say. She didn`t do himself any harm, but it`s really early.

JONATHAN ALLEN, NBC NEWS DIGITAL NATIONAL REPORTER: And early she gets to talk about something other than the DNA test, which was starting to be something to define her.

MATTHEWS: Distant piece, trace really of Native American blood. You know, it didn`t make the case she was part Indian or something.

ALLEN: Something that was dragging her down, people were talking about it. Now she`s talking about how banks are hitting some of the --


ALLEN: But the handling of that looks terrible on everything else, you got to know why you want to run for president and you got to know that you do want to run for president if you`re going to run. By getting out there early, she messages that.

SAHIL KAPUR, BLOOMBERG POLITICS NATIONAL POLITICAL REPORTER: It does show conviction. I mean, she knows what she wants and she knows exactly what her message is. She`s not -- unlike Hillary Clinton, her message is not I am better than Trump, look at this guy, elect me. She has a message about rich and powerful are buying the system, they`re rigging it, and they`re making the rules against you. So, she has a message and let`s see if --

ALLEN: Her own message she has owned for years, probably by Biden (ph). I got two accounts to what she says to people. There`s one account that says, hey, none of the others can win, I can win. That sounds awful, because that is too much dismissive of so many good people.

The other one I heard, if somebody else lights up the charge like Obama does, I get out of the way. But nobody has lit up the charge, which sounds a lot more humble. So, it depends on how you get the -- we`re getting all of this secondhand. When these people call "New York Times," here is what he said and do it verbatim, they weren`t recording it.

They`re saying -- anyway, what do you think of Biden, I`ll go in if they need me?

ATKINS: I think it`s terrible. I mean, look, the Democrats that I talk to say they`re excited there`s a big, broad field. They`re waiting to see what these candidates have to say. They`re looking forward to hearing from them all.

So, someone saying nobody can do it but me, it sounds a little Trumpish, and that`s what Donald Trump said, and it`s really dismissive of the party. And I think that`s not the best way to come in. And you`re right, we don`t know exactly what he said.

Joe Biden is politically savvy guy, but I think he needs to know that coming in, he has a lot of baggage, too, being part of the establishment Democratic Party. There`s a lot of new young energy. He has to make the case.

MATTHEWS: You know what the young guys have going for them, young women especially, they didn`t vote for the Iraq war. That`s one of the great things about being a newcomer. Jon, what do you think of Biden`s approach?

ALLEN: Look, I think every candidate will try --

MATTHEWS: Biden, by the way, supported the Iraq war.

ALLEN: Yes, every candidate will make the argument they`re the one most electable. But coming out there, having your message out there before you are, it is more advance than "New York Times," he is talking victory rather than vision. That`s not what you want to talk about now.

I also think that voters in the Democratic primary are tired of being told who is the most electable candidate. Every four years, they`re told who is most electable.

MATTHEWS: Nobody has any idea.

ALLEN: It`s unprovable.

MATTHEWS: You know what I think? Anybody can beat Trump, anybody can lose to Trump. There`s no way -- so pick the one you think is best.

KAPUR: And Biden can certainly make the case about electability. He can probably -- he`s probably the best on the Democratic field, or among the best to stop the bleeding with non-college educated white voters, and he can probably reconstitute the Obama coalition. His big problem is he has a 36 year record in the Senate, lot of votes that look bad to Democratic voters if you bring them up.

You know, it`s not just the Iraq War. There`s the crime bill. There`s Anita Hill hearings. He voted to repeal Glass-Steagall. He pushed a bankruptcy bill.

There will be economic populists in that field who are going to jump all over him and I think it`s going to take -- his poll numbers are going to take --


MATTHEWS: It`s hard to be 28 again.

KAPUR: The Democratic Party has changed so much since Biden`s heyday.

ALLEN: He stood with the southern block on busing in the early `70s, mid `70s when that was a huge issue. I don`t know how that`s going to play to people of color in southern states, when he tried to win Democratic delegates there. I mean, that`s the kind of issue --

MATTHEWS: I have one theory. I think about this all the time like you guys. All I think about is this thing. I think Elizabeth Warren has the best chance at a fast break and win the whole thing early.

Here is why I think, you know this better than I know -- she wins in Iowa, because the left out there is very active. They like a consumer position against Wall Street, populism will sell out there in the Midwest part of the country, anti-New York really. Then she goes to New Hampshire, next door to where she`s from. People from that region almost always win New Hampshire.

And then she dukes it out with maybe Kamala down in South Carolina maybe, then she goes out to Nevada. Women labor, she can win there. Then she goes to California for the final duke out. I tell you, she beats Kamala in California, it is over.

The roundtable is sticking with us. And up next, these three tell me something I don`t know. You`re watching HARDBALL.


MATTHEWS: We`re back with the HARDBALL roundtable.

Kimberly, tell me something I don`t know.

ATKINS: Well, the Supreme Court this week agreed to take up political gerrymandering case that they punted on before. So, expect to see a public campaign to try to convince Brett Kavanaugh to recuse himself. You know, he made a lot of comments during his confirmation hearings and there are folks who are going to try to bring up --

MATTHEWS: What state?

ATKINS: I`m sorry?

MATTHEWS: What state?

ATKINS: I think nationwide -- gerrymandering, out of North Carolina, which is having a lot of trouble. It`s a big, closely watched case. We`re going to see a lot of push for him. He`s not going to do it, he doesn`t have to but it`s a messaging.

MATTHEWS: That`s his theme, don`t give in.

ALLEN: "Wall Street Journal" is reporting today that Beto O`Rourke is going to make a decision by February. The most interesting in his house voting record over the six years he was there, voted consistently against helping Ukraine after Vladimir Putin invaded Crimea, including just condemning Vladimir Putin for aggression against his neighbors.

MATTHEWS: Wouldn`t do that.

ALLEN: Wouldn`t that.


ALLEN: Got to ask him about it.

MATTHEWS: OK, we`re out of time.

KAPUR: Progressive activists are eyeing primary challenges to as many as dozen House Democrats, starting with Seth Moulton, and Kathleen Rice, group Data for Progress in the field, commissioning polls. We could be looking at a Tea Party of the left if this takes hold and people jump on board.

MATTHEWS: Thank you, Kimberly Atkins, Jonathan Allen and Sahil Kapur.

When we return, let me finish tonight with what looks likes the opening of the 2020 presidential season right now.

You`re watching HARDBALL.


MATTHEWS: Let me finish tonight with what it looks like right now to be the opening of the 2020 presidential season. It`s right now, and it`s a good time to think about what the office of president entails. And oddly enough, we`ve learned the daunting answer from the current occupier, Donald Trump.

An American president wears five hats. One, head of state. The president of the United States is the person who represents the American people. A president either makes us Americans proud or does not. A president either holds our country high in the eyes of the world or does not.

Look at Angela Merkel of Germany. She`s been chancellor longer than Franklin Roosevelt was president. She comes across as modern Germany itself -- serious, solid, successful.

This brings us to the second role of an American president. Chief diplomat. The person we elect president sets our country`s strategy around the globe. That means coming up with and managing the big ones, our relations with China, with Europe, with the Middle East, Russia.

Third, commander in chief. A president decides most properly with the concurrence of the Congress if and where to use military force.

Fourth, head of government. A president leads on border protection, health policy, tax policy, you name it.

And finally, chief executive. A president runs the executive branch of government. If it functions effectively, the government deserves the credit. If not, the president deserves the blame. Donald Trump ironically has taught us how to president should behave or not.

The challenge for the Democrats is to find the person who can better carry out the high responsibilities of the American presidency in a way that is convincing to the voters next year in November.

And that`s HARDBALL for now.

"ALL IN WITH CHRIS HAYES" starts right now.