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Julian Castro drops out of 2020 Presidential race. TRANSCRIPT: 1/2/20, Hardball w/ Chris Matthews.

Guests: Christopher Hill, Kelly Magsamen, Alexi McCammond, Sahil Kapur,Ruth Marcus, Anita Kumar, Cynthia Alksne, John Podhoretz, Stuart Stevens

ARI MELBER, MSNBC HOST:  You get whipped cream, and you get whipped cream, sort of an Ellen-Oprah-Andrew Yang moment.  Well, we`ve had him here before and we`re thrilled to have him back.  That`s tomorrow at 6:00 P.M. Eastern.  I hope you tune in.

That does it for us.  I`ll see you then.  HARDBALL with Chris Matthews is next.


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

Another Republican senator is voicing concerns over how Majority Leader Mitch McConnell is handling the pending impeachment trial of the president.  Senator Susan Collins of Maine joins fellow Republican senator Lisa Murkowski in offering a rebuke of McConnell`s recent statements.


SEN. SUSAN COLLINS (R-ME):  I`ve heard the Senate majority leader saying that he`s taking his cues from the White House.  There are senators on both sides of the aisle who, to me, are not giving the appearance of and the reality of judging this in an impartial way.

I am open to witnesses.


KORNACKI:  Collins, though, said she does agree with McConnell on at least one point, that it would be premature to decide which witnesses to call until senators see the evidence first.  And with Congress preparing to return from their holiday break, lingering questions remain about what a Senate trial would look like.

Reports indicate there has been no progress breaking that stalemate between McConnell and Minority Leader Chuck Schumer over calling potential witnesses, including some of the president`s inner circle.

Today, Schumer seized on a new report to make the case for a robust trial.  The website Just Security, that`s a blog associated with the NYU School of Law, says it has viewed unredacted copies of previously blacked out emails released earlier this month between the White House and Pentagon over that hold on aid to Ukraine.  In one of those emails from Michael Duffey, a political appointee of the White House Budget Office, to a Pentagon official points the finger directly at the president.

According to an August 30th email, Duffey writes this, quote, clear direction from POTUS to continue to hold.  That email was sent following a meeting the president was said to have had with Defense Secretary Mark Esper and Secretary of State Mike Pompeo.

NBC News has not viewed the emails and cannot verify their authenticity.

Just hours after the release of that report, Senator Schumer called it, quote, a devastating blow to Senator McConnell`s push to have a trial without the documents and witnesses we`ve requested.

For more, I`m joined by Anita Kumar, White House Correspondent and Associate Editor at Politico, Ruth Marcus, Columnist at The Washington Post, Cynthia Alksne, a former federal prosecutor, and John Podhoretz, Editor at Commentary Magazine.  Thanks to all of you for being with us.

Well, Ruth, let me ask you about this because you have this new report here coming out again.  NBC News has not actually independently looked at these emails but the report is out there, Schumer is seizing on it.  From the Democratic standpoint, that`s what they think is going to change the politics of this in the Senate with time by withholding the articles more, reports like this, in their view, might come out, ratchet up pressure on McConnell.

I suppose on the other side, the question is there is time.  If you keep running the clock like this, other events are going to overtake impeachment like, for instance, the presidential election.  Are the Democrats gaining any leverage here?

RUTH MARCUS, COLUMNIST, "THE WASHINGTON POST":  Well, they`ve gained a little leverage with Senator Murkowski and they gained perhaps a little bit of leverage with Senator Collins, and we`ll see if there`s more.  But it`s certainly true that it`s becoming increasingly untenable from my point of view to argue that you could fulfill your role as an impartial juror and take this constitutional responsibility seriously without hearing from additional witnesses.

This latest from Just Security is another big dollop of icing on the cake of that.  And I think it`s really critical to keep pushing that, even though I understand Democrats have a clock that`s running out on them,  They have -- they have candidates for the presidential nomination who need to be elsewhere than sitting in their chairs in the Senate and wanting to be doing that.  So there`s a lot of tension there.  But there`s a fundamental underlying constitutional responsibility.

KORNACKI:  Anita, we mentioned the news with Susan Collins, there was Lisa Murkowski a couple of days ago.  I think one of the questions though, pardon me, is what is Collins actually saying.  Because I think the cynical read on it is, hey, she`s got to worry about getting re-elected in a blue state, a state that voted for Hillary Clinton over Donald Trump in 2016, so she`s got to show some kind of public distance here from what Republicans are doing.  But she also has to survive a potential Republican primary in Maine to even to get to the general election.  So is, ultimately, this just noise not going to lead to a fundamental break?  But what`s your assessment of it?

ANITA KUMAR, WHITE HOUSE CORRESPONDENT AND ASSOCIATED EDITOR, "POLITICO":  Right.  I mean, she`s really not saying anything there.  She`s saying she could go both ways.  She`s open to witnesses but she doesn`t have to have them.  She doesn`t really say either way.  And I think on the -- from the White House perspective, they do feel that they need to keep all the Republicans in line.  That`s their main goal here.  But they don`t feel like this is break, at least it`s not a break yet.

But they`ve been working for a couple of months now and they`ll continue to work as this year goes forward and keeping all of those Republicans in line.  They`ll be counting on Senate Majority Leader Mitch McConnell to help them do that.  That`s been their goal from the beginning.

The one bright spot on the House vote for the president is that he was very pleased that all Republicans stayed in line.  Not one person, you know, devoted the other way and, in fact, one Democrat has now switched to Republican.  So that`s something that`s very important to the president, and it`s something that the White House knows and that they`re going to be working on.

KORNACKI:  And while the Senate continues to wait for Nancy Pelosi to deliver those articles of impeachment, Republican Senator Josh Hawley of Missouri argues that because the articles haven`t been delivered, the trial can be dismissed even before it begins.  Hawley tweeting this, quote, Dems said impeachment was urgent.  Now, they don`t want to have a trial because they have no evidence.  In real world, if prosecution doesn`t proceed with a case, it gets dismissed.  So, on Monday, I will introduce measure to dismiss this bogus impeachment for lack of prosecution.

Cynthia, let me start with you on the procedural issue here.  This is where a United States senator is saying he`s going to introduce this on Monday.  What`s the prospects of what he`s saying here actually happening?

CYNTHIA ALKSNE, FORMER FEDERAL PROSECUTOR:  Well, I think they`re quite low.  I mean, he`s making some kind of a reference to a speedy trial act violation, which might happen in a criminal case, but it`s been 14 days.  There`s not a court in America that would dismiss anything on speedy trial act violations in 14 days.  And for goodness sake, it`s been Christmas and New Years.

And Pelosi has had this pause.  And, boy, sure looks like she was smart about it, because look at all the evidence that`s come out in this brief time, in this pause.  These Just Security emails are very damning for the president and also for the Department of Justice, sadly to say.  Because what we can see in these is that when the Department of Justice released emails under the FOIA requirement, they redacted everything that hurt the president.  They took things out like the Pentagon was saying, well, about the lawyers?  Have they seen this whole?  And they were suggesting on very early that there was a legal problem.

And the Pentagon was saying, we may not be able to get this money, and they redacted that out.  We may not be able to actually, if ever it`s released, go ahead and get it to you printed.  There were lots of things that were happening and everything that`s negative to the president, much of that was redacted.  So it`s not only bad for the president, it`s bad for DOJ and it looks like a cover-up.  And that increases the pressure on McConnell to actually do something for witnesses, which we need if we`re going to have a real trial.

KORNACKI:  Well, since Cynthia talking there that has some procedural issues (ph).  But the politics of this, John, look it`s the cliche at this point.  The Senate is a political process, not ultimately a legal process.  So what Hawley is doing there -- this is not a swing state senator, this is not an up for grabs senator.  But it is a window into the politics on the Republican side that playing out here?

JOHN PODHORETZ, EDITOR, COMMENTARY MAGAZINE:  Yes.  I mean, I hate to be sort of like the guy who spits in the punch bowl, but what I think is going on here is that this is all an internal Democratic psycho drama.  Democrats vote for impeachment, Republicans don`t.  Pelosi holds the impeachment documents from the Senate to make a hold.  Schumer says we need to have a trial.  McConnell is just saying no and unless four or five Republican senators, not two, not just Collins and Murkowski, but five go over to the other side and vote for witnesses and vote to change the rules to make it possible for Democrats to get their way, none of this will happen.

And I see absolutely no reason why whether or not it`s a constitutional obligation, whether or not it makes the president look bad, the Just Security memos make him look bad, that this is going to go any way other than the way --

KORNACKI:  Could you think of four Republicans who plausibly, in your mind, could be persuaded to join the Democrats on this?

PODHORETZ:  No.  I mean, I can think of three conceivably.  I could think of Collins, Murkowski and Romney conceivably.  I don`t know who the fourth is and who the fifth is.  And the rule is you have to have a majority to write a rule, right, in this proceeding, which is where you can trip up -- where you can trip up McConnell if he wants to have no witnesses.

And, you know, Democrats and liberals, they can scream until the cows come home that this is a terrible hold up, but the clock was rushed by Pelosi.

The other way of looking at this is she didn`t wait.  She didn`t for the Supreme Court to rule on whether or not Don McGahn had to testify, the White House Counsel.  They didn`t wait on some of these documents.  They wanted to get this done by December so there could be a trial in January, so it could be over by the primary season.

That is not Republican responsibility that the way this has been handled is an entirely an internal Democratic matter and it is not, I believe, going well for them.  That`s where I disagree with Cynthia.  I think it`s going badly for them, and that all of this is a big dance about how to make it -- how to put, you know, lipstick on a pig.

KORNACKI:  Let me ask Cynthia about that and that decision, a very intentional decision Democrats made on the House side to say, we`re not going to let the court cases play out here that might compel more documents, more testimony, we`re going to just get this to the Senate.  It`s an urgent matter because of the pending election.  Did that strategically affect how things are playing out now in a negative way for Democrats?

ALKSNE:  Well, I will say this about what John said.  First of all, I agree that I don`t think Collins will ever come over and vote.  I think she`s a wolf in sheep`s clothing and she just hems and haws and has heavy breathing and then votes with McConnell.  So I would agree, we`re not going to end up with witnesses but it doesn`t mean there`s not a constitutional obligation.  It`s not the right thing to do, number one.

Number two, I think the problem didn`t happen in the Intelligence Committee.  I think it happened in the Judiciary over the summer.  Don McGahn was subpoenaed in May and stiff-armed the House and they did nothing until August.  That`s a problem, and I would agree that was a mistake and it was not handled well.

And if it was so urgent at the time that Don McGahn testify, the subpoena should have been enforced instantly, and it was not.  And I think we reap what we sow on that.  I would agree on that, because witnesses know they can stiff-arm the Congress, and there isn`t time now.  And that`s all because of that waiting from May to August on McGahn.

PODHORETZ:  I mean, I think the deepest point here is we`re about to go into an election year.  All this evidence, all this information that you`re talking about is going to come out potentially, a lot of these documents through FOIAs and all of that.  The American people will judge in the election whether or not what Trump did with Ukraine was so heinous that he should be denied a second term.

KORNACKI:  So let`s stay on that point, Ruth.  I`m curious what you think of that because I mentioned the ticking clock earlier in all of this.  As Democrats sort of wait on this, we`ll see how long they do hold it out for, the campaign really does begin a month from tomorrow as Iowa, eight days later is New Hampshire.  If this is still sort of dragging out as we get to the presidential election campaign, does that argument that John is making, does that potentially take hold among the critical chunk of voters say, hey, we`ve already got the election going on, let`s have the country be the jury for this?

MARCUS:  Sure, that`s a totally legitimate argument to take into account, which I think is a big piece of why Democrats in the House wanted to rush things.  But I think for one thing, John is assuming facts, not in evidence, which is that this information is going to come out anyway.  When is this information going to come out if the Senate doesn`t insist on it?

And whether or not you think that the House did the right thing or the wrong thing by not pushing certain subpoenas and by rushing things over to the Senate, the fact of the matter is that the Senate has a separate and pre-existing constitutional responsibility to deal with the articles of impeachment when they are there.

And I just don`t understand -- I`m going to say it again -- how a responsible senator can say the president has been accused of these things and there are critical witnesses, John Bolton, Mick Mulvaney, others who have relevant information who we have not heard from and we are being asked whether or not to remove a president at the very least.  I know they`re not going to remove him.  But at the very least, they should know what information there is available to make their decision.

KORNACKI:  All right, Ruth Marcus, Cynthia Alksne, John Podhoretz, Anita Kumar, thank you all for being with us.

And coming up, has the Republican party lost its way?  One long-time GOP strategist says the party of Trump has shattered traditional Republican principles and now stands for all the wrong things.  He`s going to join us next.

Plus, the president begins the New Year with new global crises, including violent demonstrations at in U.S. embassy in Baghdad.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  This will not be a Benghazi.  Benghazi should never have happened.  Still will never ever be a Benghazi.


KORNACKI:  And he`s facing critics asking if he`s misjudged adversaries like Kim Jong-un.

We`ve got much more to get to.  Stay with us.



TRUMP:  I don`t think there`s ever been a time where the Republican Party was so united.

The Republican Party has never been so unified as it is right now.

I don`t think we`ve ever had the spirit that we have right now in the Republican Party.

I`ll tell you the Republicans are really strong, the strongest I`ve ever seen.

The Republican Party is the party for all Americans.  We really are.  We have changed this party so dramatically, folks.


KORNACKI:  Welcome back to HARDBALL.

Over the past three years, President Trump has completed a thorough reshaping of the Republican Party in his own image.  That is the argument that Stuart Stevens, the former chief strategist for Mitt Romney`s 2012 presidential campaign makes in a scathing attack on what he says the GOP has become.

He writes this, quote, Republicans are now the officially the character doesn`t count party, the deficit doesn`t matter party, the Russia is our ally party, and the I am right and you are human scum party.  Yes, it`s President Trump`s party now but it stands only for what he`s just tweeted, a party without a governing theory, a higher purpose or a clear moral direction is nothing more than a cartel, a syndicate that exists only to advance itself.

Steven adds that the party no longer has, quote, an organized, coherent purpose other than the acquisition and maintenance of power.

Steven ends by saying that President Trump, quote, looked at the party, saw its fault lines and then offered himself as a pure distillation of accumulated white grievance and anger.

Stuart Stevens joins me now.  He is currently advising a Super PAC that is supporting William Weld`s presidential campaign.  Stuart, thanks for joining us.

Let me start with a basic question then.  Your indictment of Trump, your indictment of the Republican Party under Donald Trump, is it your contention that Donald Trump emerged and moved the Republican Party into a new and dark place or did Trump merely reveal and expose something that had been there for a while?

STUART STEVENS, ADVISER TO SUPER PAC SUPPORTING WILLIAM WELD:  I`m afraid that Donald Trump exposed fault of the party that a lot of us ignored for too long.  I mean, there`s always been a tension within the conservative party since post-World War II.  There was McCarthy and there was an Eisenhower.  After you had the `64 race where Goldwater seemed to take the party in one direction, that was a disaster, and the party came back.

You know, I worked for both campaigns for Governor Bush, and we really believed that we were aspiring to something that was a conservative -- a compassionate conservatism that could bring people together.  We got up to over 40 percent of the Hispanic vote in 2004, won the popular vote for the first time since 1988. 

So, there was this vision.  And we certainly weren`t perfect.  I mean, we played too much on the dark side, I think.

But we could -- we were aspiring to something that could make us proud and feel better.  And Donald Trump, I think, just appeals to the worst within us all, and manipulates that, and -- and brought that out in the party.

KORNACKI:  So what happened in your party? 

You -- as you say, you were the chief strategist for Mitt Romney.  He ran in 2012, fell short against Barack Obama.  I think we all remember this.  When that campaign ended, the RNC put out, they called it the autopsy...

STEVENS:  Right.

KORNACKI:  ... their diagnosis of what was wrong.  They said, got to move to the middle on immigration, on some of these social issues.  It`s the only way.

And Donald Trump is a living, breathing rebuke of that autopsy, ran for president, didn`t have a single elected official in the Republican Party -- member of Congress, I should say -- endorse him, until he started winning states.

How did he get control of this party? 

STEVENS:  Well, he won the nomination and then he won the presidency. 

I think that, when Donald Trump came out for a Muslim ban back in February of 2016, which is really nothing but a religious chest to enter the United States -- how do you know if someone`s Muslim or not?  You have to ask what their religion is. 

The party should have stepped forward, and I think Reince Priebus should have stepped forward, as he`s done in other cases, and said, look, we can`t stop Donald Trump from running, but this party does not stand for this.  And we do not believe -- we`re still a constitutional party.  We don`t believe in religious tests.

Ultimately, parties in our system have to perform a certain circuit breaker function.  And the party never threw the circuit breaker.  And I talked to a lot of Republicans then and tried to urge them to come out more.

I mean, some did.  Governor Romney, now Senator Romney, certainly did.  But there was, I think, a tremendous lack of courage.  Now, part of the thinking was, when I would talk to people, they would say, look, sure, if we -- we, the establishment, come out and put our thumb on the scale, and Trump -- when Trump loses, we`re going to get the blame.  It`s not going to be because he had terrible ideas.  It`s not because he was racist.  It`s not because all this alt-right stuff.

We just have to let him lose, start over, let it wash out. 

And I would always ask, well, what if he wins?  But I was never very good at arguing that, because I didn`t think he was going to win. 

KORNACKI:  Let me -- but let me...

STEVENS:  So, you know...

KORNACKI:  But did you -- is part of this recipe, though, that you -- you`re saying the establishment here.  Let`s use that word.

Did the establishment -- are there valid reasons, from the standpoint of the Republican base, that they gave up on the establishment?  Did they have a legitimate -- were there any legitimate grievances with the Republican establishment?  Was there a sense that, hey, these folks are paying lip service to us, and Trump standing up to them, and, therefore, he`s doing something good here?

Was that -- was that part of the recipe at all? 

STEVENS:  Well, what is the establishment but whoever it is that wins?  You`re not the establishment if you lose.  Donald Trump is now the establishment of the party.  I mean, that`s the reality of it. 

So, really, parties are just a voluntary collection of people that are drawn together by ideas and a sense of purpose.  It`s really -- that`s all it distinguishes it from, like, a bowling club.  You have to believe in some sort of aspirational purposes. 

To me, it`s not just that the party has abandoned its roots of character counts, personal responsibility, strong on Russia, deficit matters.  We`re now against all of those things. 

So, in the `80s, we said with Ronald Reagan words can change the world.  What a president says is so powerful, it can bring down the Berlin Wall. 

And now we say, well, look, words don`t matter.  It`s just Trump.  It`s just the president.  I mean, we have -- we have denigrated everything that we said that we believed in.  And I think it is a terrible Faustian bargain. 

And what people forget about Mephistopheles is, it`s not just that he takes your soul, but he never delivers on what you want. 

So what do we have now?  We have these record deficits.  Unbelievable.  Mexico hasn`t paid for a wall.  Barack Obama was much tougher on immigration and more effective on immigration than Donald Trump is. 

What country is it around the world in which America is considered stronger?  I think there would only be two, possibly, Russia and Israel.  And that`s it. 

We have our allies literally laughing at us.  And it`s not a good thing.  I mean, I feel like the Republican Party, in a way, it`s like somebody smoking is two packs a day, and they`re arguing that smoking is healthy because they haven`t died yet. 

I don`t think it really works that way. 

KORNACKI:  I hear you. 

I -- we have just a short time.  I wanted to ask you about this, because we -- all these things that have been written and talked about the last few years about where Trump`s rise came from in the Republican Party. 

And, again, you were chief strategist for Romney.  I got to ask you.  In 2012, your candidate Mitt Romney, he sought Trump`s endorsement.  He received it.  It was a pretty big press event.  Take a look here at what happened back then.


TRUMP:  It`s my honor, real honor, and privilege to endorse Mitt Romney.

Governor Romney, go out and get them.  You can do it. 

SEN. MITT ROMNEY (R-UT):  Thank you.  Thank you.   


ROMNEY:  I want to say thank you to Donald Trump for his endorsement.  It means a great deal to me to have the endorsement of Mr. Trump and people across this country who care about the future of America. 


KORNACKI:  I just got to ask you.  This was after years of the birther campaign that Trump had been waging, saying Obama wasn`t even born in this country. 


KORNACKI:  Is that a moment that legitimized Donald Trump to Republicans? 

STEVENS:  I don`t think Donald Trump was legitimized because he endorsed Mitt Romney. 

Look, you`re running for president.  People endorse you, you tend to accept those endorsements.  That was before the Nevada primary.  He`s actually got pretty a good reputation in Nevada as a business owner. 

We did it.

Looking back, was it a mistake?  Sure, I think it was mistake.

But it`s just really when -- Ronald Reagan said something.  Because someone endorses me doesn`t mean I endorse them. 

And Donald Trump wanted to play a much larger role in that campaign.  I know that because I dealt with it.  He wanted to leave Nevada traveling with Mitt Romney.  He wanted to speak at the convention.  He wanted to campaign in the fall.  All of that, he was said no to, but probably shouldn`t have done it. 

KORNACKI:  All right, Stuart Stevens, thank you for joining us.  Appreciate it.  Excuse me.  Really appreciate it.  Thank you. 

And up next:  Trump`s foreign policy miscalculations are coming back, potentially, his critics say, to haunt America.

You`re watching HARDBALL. 



TRUMP:  Iran is a country that now, because of all of the sanctions and other things, is a much different country than when I came here.

When I came here, they were all over the place causing terror, causing problems.  They`re not doing that right now.  And I think they respect the United States right now much more than they ever have. 


KORNACKI:  Welcome back to HARDBALL. 

That was President Trump last June on the threat posed by Iran.

Now Trump begins the new year facing a pair of international crises, sky- high tensions with Iran and a potentially escalating threat from North Korea. 

Iranian-backed militias have pulled back after storming the U.S. Embassy in Baghdad earlier this week.  But Defense Secretary Mark Esper warned that Iran could be planning additional attacks. 

And despite the president`s June 2018 proclamation that -- quote -- "There is no longer a nuclear threat from North Korea," on New Year`s Day, North Korean dictator Kim Jong-un warned of a -- quote -- "new strategic weapon" in the near future and hinted at a return to long-range missile tests. 

"The New York Times"` David Sanger writes that the recent flare-ups underscore the president`s misguided strategy toward the two adversaries -- quote -- "Neither seems to fear him, precisely the critique he leveled at Barack Obama back in the days when Mr. Trump declared America`s toughest national security challenges would be solved as soon as the president the world respected was in office."

For more, I`m joined by Christopher Hill, former U.S. ambassador to Iraq and South Korea, and Kelly Magsamen, who served on the National Security Council in both the Obama and George W. Bush administrations.

Thanks to both of you for being with us. 

Ambassador, let me start with you.

The situation in Baghdad.  You know the area very well.  We played what the president`s sort of public line on Iran has been of late preceding this.  What do you make of the decision by Iran, the Iranian-backed militias, to go ahead and try to pull off something like this?

And the response from the United States so far, is it going to deter any more attacks?

CHRISTOPHER HILL, FORMER U.S. AMBASSADOR TO IRAQ:  Well, first of all, I think it`s important to understand that there`s no question there`s Iranian support for the Shia militia groups. 

But these Shia militia groups, these are pretty hard-edged people in the first place.  I mean, these are the people that Vice President Cheney promised us all would be just throwing rose petals at our troops. 

And, in fact, this has been very difficult with these Shia groups.  I mean, I myself, I was in Nasiriyah as ambassador, and they tried to blow up my car.  I mean, these are tough-minded people. 

So I understand the point to kind of lay this all at the doorstep of the Iranians.  And, certainly, they take some -- need to take some blame for this.  But this is a far more complex issue than the president seems to understand it. 

So whether they are going to come back for more in the future, it`s hard to say.  I have no problem with going after people who come after our people, in this case actually killing a contractor. 

But I think we`re going to have to get a lot smarter in how we do this.  I`m not sure F-16 attacks are the way to do this and sort of killing scores of people.  So I think there needs to be a lot more thoughtfulness, if you will, to go forward. 

And I`m not sure this president is known for that. 

KORNACKI:  Well, in a series of tweets on Tuesday, President Trump praised U.S. forces for their response, warning -- quote -- "Iran will be held fully responsible for lives lost or damage incurred at any of our facilities.  They will pay a very big price.  This is not a warning.  It is a threat."

Trump again touted the military response at a New Year`s Eve gala at his Mar-a-Lago resort. 


TRUMP:  Well, I think it`s been handled very well.  The Marines came in.  We had some great warriors come in and do a fantastic job.  And it`s in great shape, as you know.

This will not be a Benghazi.  Benghazi should never have happened.  This will never, ever be a Benghazi. 


KORNACKI:  The president went on to say that he did not want war with Iran, but he did warn that any armed conflict -- quote -- "wouldn`t last for long."

Kelly, the ambassador points to the complexity the situation here.  What should a U.S. response look like? 

KELLY MAGSAMEN, FORMER DIRECTOR FOR IRAN, NATIONAL SECURITY COUNCIL:  Well, I think what we`re seeing is that the president of the United States is deeply conflicted. 

On the one hand, he wants to be perceived as tough, and he wants to use his words and actions to deter the Iranians.  On the other hand, he`s deeply afraid of getting embroiled in a deeper war in the Middle East. 

And so I think that dichotomy is playing out.  And, unfortunately, our adversary see that conflict within Trump.  And I think they`re playing into that space, and taking -- taking advantage of it. 

I think, of course, we take -- we should take defensive actions where necessary to defend our personnel and our troops.  But what we should definitely avoid is the kind of rhetoric and public discussion of some of the things that we`re doing, in part because, frankly, it puts the Iraqi government in a terrible political position as it tries to actually restore some calm. 

So, in my -- my recommendation would be for the Trump administration to dial down some of the bravado in the current context. 

KORNACKI:  Well, on New Year`s Eve, the president was also asked if he has a message for North Korea`s leader, Kim Jong-un.

Here`s what he said:


TRUMP:  I have a very good relationship with Kim Jong-un.  He likes me.  I like him.  We get along. 

But he did sign a contract.  He did sign an agreement talking about denuclearization.  And that was signed, number one sentence, denuclearization.  That was done in Singapore.

And I think he`s a man of his word. 


KORNACKI:  Well, Ambassador, what do you make of that?  "I think he`s a man of his word."

We have got all these -- this new posture, new sort of aggressive words, posturing coming out of North Korea.  That`s the president`s public response.  Do you see strategic wisdom in approaching it that way at all? 

HILL:  No. 

The problem is, first of all, I think it was -- it was an OK idea for the president to lead the resumption of the process.  But then he has to say to the North Koreans, OK, I want your people to work with my people.

And then he needs to anoint his own staff and say, when you talk to these people, it`s like talking to me. 

So, he`s got to make it very clear that these people really count.  And then he needs to set up some benchmarks.  In fact, we went to Singapore.  And what it turned out to be was, they had a very vague statement, extremely vague.  I mean, the North Koreans really did not commit to denuclearization.  They had a kind of concept of the end of days, that, when the lions lie down with the lambs, we will have denuclearization. 

There was nothing of any specifics there.  They didn`t follow up.  It was very clear the North Koreans were not prepared to go forward. 

And then we went into several months` hiatus, when they basically decided they would only talk to a negotiator whose name was Donald Trump.  They wouldn`t talk to anyone else. 

And I think they tried something in Hanoi.  I thought it was kind of interesting, actually.  But, as usual, the North Koreans were a little vague about it, and that was decommissioning the main nuclear facility.  And the president has this kind of view that he can get this all done in one step. 

And he said, well, we`re not interested in that.  And after just a few hours -- whether he was worried about Michael Cohen`s testimony that day in the Congress, hard to say, but after just a few hours, he walked out.

And we haven`t seen any -- any progress since then. 

KORNACKI:  All right, Ambassador Christopher Hill, Kelly Magsamen, thank you both for being with us. 

And up next, going to head over to the Big Board.  We got money, money, money, new fund-raising numbers coming out for the crowded Democratic field.  What does it tell us about their positioning almost exactly one month before Iowa?

You`re watching HARDBALL. 


STEVE KORNACKI, MSNBC HOST:  All right.  Welcome back to HARDBALL.

Well, look at this, 32 days to go now, just one month -- one day before the one month countdown begins until the Iowa caucuses and when Iowa comes, they come pretty fast after that, too.  New Hampshire, Nevada, South Carolina, Super Tuesday.  Before long, we`re going to know the Democratic nominee, who`s going to go up against Donald Trump and what goes into figuring who the Democratic nominee is going to be. 

Well, there`s obviously the voters themselves.  There`s also money.  We`re starting to find out how much money these candidates are going to have for this final sprint.  This is fourth quarter, the last three months of the year, 2019.  We`re into 2020 right now. 

We`re starting to get the official tallies for what these campaigns raised in the final three months of the year.  The front runners nationally, Bernie Sanders took in nearly $35 million in the last three months of 2019.  He`s going to have money in the homestretch of this Democratic race.  Pete Buttigieg, nearly $25 million, second most prolific fund-raiser from what`s been reported so far.  Biden back at nearly $23 million and Warren her campaign said there`s going to be at least $17 million and we`ll get the official number soon.

But look at that, if you`re just looking at these numbers, you might say Sanders is running laps around the field, but voting -- voters, I should say, in the polls don`t necessarily line up in this.  This is the national polling average right now.  Biden might be in third place but he continues to lead nationally, Sanders almost 10 points behind him. 

Look at that disparity for Buttigieg.  All that money Buttigieg has raised, still only 8 percent nationally and, again, we`ll see about Warren. 

Other candidates also we`re keeping an eye on here.  We don`t know yet what the numbers will be for Cory Booker, for Amy Klobuchar.  We did get a number for Andrew Yang, a very big number, $16.5 million, but again, Yang sitting there, the question there has certainly attracted a large online following.  We`ll see what happens there. 

And, by the way, another category of candidate here, the candidates who aren`t taking the money in as much as they`re spending the money, as much as the money is going out.  Tom Steyer, Michael Bloomberg, billionaires who have already spent -- look at the money they`ve already spent here, Bloomberg, $120 million, Steyer, $83 million.  This is money they`ve spent so far.  Those numbers are going to get much bigger I think in the next month or so. 

So far, what`s that`s gotten Bloomberg.  It`s gotten him 5 percent in the national polls.  Steyer, what`s that gotten him, 2 percent in the national polls.  We`ll see as they pileup tens of millions of more on top of that, what that could get him.  And, of course, Bloomberg with that unconventional strategy, he`s not contesting Iowa, New Hampshire, Nevada, South Carolina, he`s waiting until Super Tuesday. 

So, again, a bit of a wildcard there.  But a few more numbers to come in over the next few days, big numbers for Bernie Sanders, but Biden does lead in the polls.  Money isn`t everything in politics, even though sometimes you might get that impression. 

Anyway, while Bernie Sanders fund-raising numbers show he has some staying power, one candidate says he realizes that 2020 is not his time for president.  That`s up next. 

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JULIAN CASTRO (D), FORMER PRESIDENTIAL CANDIDATE:  I`m so proud of the campaign we`ve run together.  We`ve shaped the conversation on so many important issues in this race.  Stood up for the most vulnerable people and given a voice to those who are often forgotten. 

But with only a month until the Iowa caucuses and given the circumstances of this campaign season, I have determined that it simply isn`t our time.  So, today, it`s with a heavy heart and with profound gratitude that I will suspend my campaign for president. 


KORNACKI:  Welcome back to HARDBALL.

That was former HUD Secretary Julian Castro announcing his decision to withdraw from the Democratic race for president.  While the field is narrowing, there are actually still 14 official candidates who are out there in this race. 

And the campaigns are back in full swing after the holidays.  We just said this, the Iowa caucus is 32 days from today. 

Former Vice President Joe Biden got a boost there today, gaining the endorsement of Iowa freshman Congresswoman Abby Finkenauer. 

I`m joined now by Alexi McCammond, a political reporter for "Axios", and Sahil Kapur, national political reporter for Bloomberg News. 

Thanks to both of you for being with us. 

Alexi, we mentioned there are 14 still out there technically on the Democratic side.  Of course, it seems one of the lessons here from Castro`s campaign is if you can`t get on that debate stage, if you can`t get in front of 10 million, 15 million viewers for these debates, it`s tough to continue and have a plausible chance of winning. 

ALEXI MCCAMMOND, AXIOS POLITICAL REPORTER:  I think that is right, and that is conventional wisdom.  Though Julian Castro`s campaign sort of defied that scenario when we saw he got more online donations in the last two debates that he wasn`t even on the stage for compared to the previous two debates that he was on the stage for. 

He had this really interesting dynamic happening where even though he wasn`t on the national stage, he was doing these town halls in Atlanta during the debate in November, with someone like Angela Rye, talking about issues that are relating to black and brown communities when other candidates maybe were not talking about that. 

The other interesting example of this dynamic is someone like Senator Cory Booker who also hasn`t been making the debate stage as of late.  So he`s someone that I`m looking for, whether or not he will continue his campaign much longer and especially into the Iowa caucuses in just 32 days. 

KORNACKI:  We mentioned again a month ago, pretty much until Iowa, and some of the candidates may be stepping up their efforts a bit. 

How about this?  An interview published late this afternoon, Bernie Sanders went after Joe Biden.  He told "The Washington Post`s" Robert Costa this quote: Biden`s record and ties to the establishment make him ill-suited to defeat Trump in November. 

Sanders told Costa that, quote: It`s just a lot of baggage that Joe takes into a campaign.  He brings into this campaign a record, which is so weak that it just cannot create the kind of excitement and energy that is going to be needed to defeat Donald Trump. 

Sahil, we have been looking at this Democratic race for a long time now, and there was a brief moment with Kamala Harris in the first debate, there was a brief moment with Julian Castro trying to go after Biden in one of the debates, but largely, these candidates have not attacked Joe Biden.  It seems notable that Sanders is doing this. 

SAHIL KAPUR, BLOOMBERG NEWS NATIONAL POLITICAL REPORTER:  It looks like the gloves are coming off, Steve.  Bernie Sanders is attacking Joe Biden right where he`s perceived to be the strongest, on electability. 

Now, it`s not news that Bernie Sanders is going after Biden on, you know, voting for the Iraq war and supporting NAFTA.  He`s done that before.  But now, he`s waving that into an overarching critique which is that Joe Biden cannot win the general election and goes to most of what the polls say as the Biden campaign will point out many times over which is that Biden is doing the best against President Trump in head to head matchups in these key states, but what Bernie Sanders brings up is a fundamental question about which direction Democrats go. 

They have a fork in the road now.  Do they try to win the election the conventional way that they had done in previous elections successfully and unsuccessfully by persuading moderate voters, people in the middle, people who are less partisan, or do they do it the Bernie Sanders way, who says, you know, essentially, they need to rip up the playbook and mobilize a brand new progressive coalition, inspire new voters to join and get involved who don`t think the Democratic Party of Joe Biden is really looking out for them. 

So, this is huge question and I think this will be a fundamental divide and debate going ahead to Iowa. 

KORNACKI:  Alexi -- 

MCCAMMOND:  Can I add something to that? 

KORNACKI:  Yes, go ahead. 

MCCAMMOND:  Something that`s fascinating or struck me in that interview that Sanders did with "The Post" and you pulled out this, when he says Joe Biden is too closely tied to the political establishment.  And that`s sort of the million-dollar question, Donald Trump ran as an anti-establishment candidate to his success in 2016.  He`s obviously been a sitting president for four years, as -- you know, he`s running his re-election campaign, so it`s a little harder to argue he`s not part of the establishment.

But I think he`s going to try to use the impeachment against him in the House as a way to show he`s still this political outsider who the establishment politicians are after, and that`s one way or potential vulnerability for Biden that the Trump re-elect campaign could come after him for, to sort of paint Biden as this, you know, political elite establishment character versus Donald Trump who they will say is the anti- establishment, you know, hero of the right. 

KORNACKI:  Yes, I`m curious, too.  What do you think?

We put those fund-raising numbers up.  Look, Sanders is going to have the money here to make a real push for this thing.  His poll numbers, he had that heart attack a couple of months ago, I think a lot of people, myself included, were wondering if his campaign -- if that was kind of going to be it for the campaign, his polling support is actually going up a touch since, he`s in second place nationally here. 

There`s a theory here that Sanders is just a win in Iowa away from making an awful lot of dominos fall.  You win in Iowa, you`re rolling in New Hampshire, a state he won easily four years ago, you take it out to Nevada.  Suddenly, Bernie Sanders is 3-0 on his way to the nomination. 

What do you make of that theory that`s out there? 

MCCAMMOND:  Well, I think -- 


KORNACKI:  We`ll start with you, Alexi and then we`ll go to you, Sahil.  I`ve learned in broadcasting 101 to say who you`re asking the question to and somehow, I forgot. 

MCCAMMOND:  Sahil and I love to talk over each other.

I think that that is an interesting strategy and it`s clearly something that a lot of campaigns have been looking towards.  That`s the combinational wisdom, success in Iowa will beget more success in other states.  Bernie Sanders has been climbing in the polls in these early states.  And, you know, it`s smart to go after someone like Joe Biden on electability, but Sanders has been either tied or beating Biden in Iowa polls specifically.

So it`s interesting to see what he`ll try to do to make his electability pitch to Democrats in Iowa who maybe want someone more moderate or more willing to work with Republicans, which they find in Joe Biden and Mayor Pete Buttigieg. 

KORNACKI:  Sahil, 15 seconds. 

KAPUR:  Steve, Bernie Sanders is clearly a formidable contender.  He should not be written off.  He can very well win the nomination.  But this money shows that even if he doesn`t win the nomination, he`s in a very good position to stay in the race as long as he wants, influence the direction of the party platform, influence the positions of the eventual nominees. 

So he can play at the very least a king maker role even if he isn`t the nominee.  It`s a very different landscape surrounding Bernie Sanders in what it looked like some weeks ago when he had a heart attack.

KORNACKI:  All right.  Very true. 

Sahil Kapur, Alexi McCammond, thank you both for being with us. 

And up next, new polling in some key states shows good news for Joe Biden.  General election states here. 

You`re watching HARDBALL.


KORNACKI:  Well, we`ve talked here about the lack of state polling in the Democratic race.  We have a ton of national polls but we don`t have a lot from Iowa, New Hampshire, Nevada and South Carolina, the key early states that are going to go a long way in determining who wins the Democratic nomination. 

But we did get another kind of state poll this week, two polls from potentially key states in the general election. 

Start with Florida, no need to tell you how big Florida can be in presidential elections.  Trump won it narrowly in 2016, and if Democrats can flip it this year, that`ll go a long way toward helping them deny Trump 270 electoral votes and thus reelection.

But check this out, a new Mason-Dixon Poll in Florida shows Elizabeth Warren down 9 to Trump, Sanders down 5, Buttigieg down 4, but Biden is actually up by 2.  So, that`s the best of any Democrat in Florida.  And that`s a story we keep seeing in polls like this. 

Mason-Dixon also checked in on Virginia.  Donald Trump lost Virginia by 6 points in 2016.  The expectation is it`s going to be just as blue, maybe even more blue in 2020.  But Mason-Dixon finds Sanders down 6 in Virginia, Warren down 2, Buttigieg down 2, but Biden up by 4, the only Democrat leading in the Old Dominion in this poll.

Now, this is just one poll.  Maybe it`s an outlier.  Maybe other polls will find all the Democrats doing better in Virginia, maybe they`ll find that in Florida, too.  But it`s not the only time that we have seen Joe Biden doing notably better with Trump than any other Democrats.  That has been a consistent pattern both nationally and in state level poll, and it`s been a pattern for months now. 

Things can certainly change in politics but I wonder is what effect this has on Democratic voters in all those key early primary states.  Polls show they are much more concerned than usual about electability, about finding someone, anyone who can beat Donald Trump.  And surely, they see what we all see, poll after poll showing Joe Biden fairing better than any of his rivals against Trump.  It is unquestionably Biden`s biggest strength right now, the sense among Democrats that he`s got the best chance of taking out Trump. 

We are one month from Iowa, and the candidates are going to spend it frantically pleading their case to voters out there.  For Biden, though, every poll that looks like these two is probably the best closing message he`s got. 

And that`s HARDBALL for now. 

"ALL IN WITH CHRIS HAYES" starts right now.