for their hospitality. it has been an incredible honor to share this journey with all of you, to have the opportunity to enjoin you, pooling our resources and ideas to renew the fighting spirit at the core of what this nation is and not only get this country back to work, but do it in a way that is enjoyable, meaningful, solves our country's problems and ensures a more prosperous future for our children. that does it for us. i am dylan ratigan. we'll see you monday back in new york. just in time for christmas. let's play "hardball."

good evening. leading off tonight, the democrats. for two weeks, president obama was taken heat from the left over the tax bill. now, that it's law today, the president sits atop the middle groupd. can this give him an advantage? charles krauthammer says it can and does. president obama is about to chalk up a win. there is a real chance that don't ask don't tell will be repealed this year. the senate may now have the votes. was it obama's call on taxes? and every year contains a few political whoppers. this year was no different. plus, why would a strip club owner give newt gingrich a vip membership to her club?

it's a weird case of mistaken identity, twice. and how the critics may have gotten it wrong about the president. let's beginning with president obama's big comeback. both are msnbc political analysts. gentlemen, before we proceed, i just got one of those flash news flashes and i have to report immediately upon getting it. congresswoman michele bachmann of minnesota has been named to the intelligence committee. what -- what genius, howard, thought this was the perfect match? >> i have no comeback. i just think that speaks for itself. >> it really does. >> let's to the president today in that signing ceremony. i thought it was interesting that speaker pelosi was absent. >> well, kind of interesting. >> low profile on purpose? >> maybe. she did after all, in the end,

facilitate the passage of the compromise. >> sets the schedule. >> and if she -- >> didn't want her fingerprints on it. in 1984 when the democrats wiped out 49 states, remember mondale? speaker o'neal took a backseat for a couple of months. sometimes it's smart for leaders after a bad whopping, to step down for a while. >> nancy pelosi actually was pretty invisible over the last couple of weeks. she insisted on keeping the role of democratic leader. nobody challenged her. but as soon as she wanted, she disappeared. >> it's very smart, politically. whatever her role has been. perhaps in forcing a lot of those people to vote for legislation which basically croaked them. >> more important than what it

means about her is what it meebs about obama. the fact she wasn't there means that going forward the next couple of years, all the action, if there's going to be in, is going between this sort of freelancing president. off from his base, trying to deal with the republicans. >> here's president obama just this afternoon that bill signing. let's watch a bit of it. >> now, candidly speaking, there are some elements of this legislation that i don't like. there's some elements that members of my party don't like. there are some elements that republicans here today don't like. that's the nature of compromise. yielding on something each of us cares about to move forward on what all of us care about. >> what's the fred rogers deal about? why is he explaining such a thing as a compromise? like in a modern school. you get to use the toys for ten minutes, then junior gets to use

it for ten minutes. >> right. >> basic training in compromise. >> look, the key phrase there in that whole thing was republicans here today, here they are, you know. the old saying, keep your friends close and your enemies closer. they're now come police there s therefore, it's harder for them to whail on him. >> he said now that you're my partners in this, we're going to have some unpleasant things to do. cutting ta inting taxes, that's. that makes you popular. but next year, we're going to have to do things like long-term spending problems. >> i think that's his goal. i think he's understating the extent of democratic opposition to this in overstating to some extent, republican opposition. it was essentially a republican bill. it was a tax cut bill.

>> you could tell that by the vote last night. >> it's a republican bill. >> right. >> so it's not quite the middle. the next year's action is going to be about spending cuts. he's going to try to trap the republicans into honoring their own rhetoric on this. >> here he is to make the point. here's the president talking about down the road ahead, how the bill signing may affect future developments. >> there will be moments i am certain over the next couple of years in which the holiday spirit won't be as abundant as it is today. more over, we've got make some difficult choices ahead when it comes to tackling the deficit. in some ways, this was easier than some of the tougher choices we're going to have to make next year. >> you know, when ever you say,

subjectively, it's hard. he's a happy man this weekend. that cute smile, that wonderful, boyish smile he gave after his little crack about the holiday spirit. i haven't seen that in nonts. >> no. he seemed like a happy guy there. he endorsed this compromise, negotiated it and endorsed it, got it through. he's a happy guy and he believes the white house certainly believes that of all the potential outcomes, this tends -- this is best for the economy of anything that was doable. it's more likely to set him up well for 2012. and you know, that distance that he's established with the left -- >> allison schwartz is there. that's the first time she's stood next to mcconnell.

here's charles kro-- now krouthammer takes two days to write a column. two days, the second to get it town to 750. those words were carefully chosen. he is anointing a man of the center left and he's a man of the right. >> i'm not sure that that's something the white house ultimately wants.

it's an odd moment where you have two times in a row that he has, very smart guy. honest guy. first, he blessed the tax deal. then anoints obama as man to be elected. it's fascinating that got so much attention and that the white house was even in the position of taking note of that guy. >> bill clinton was left-handed. what's it tell you? >> they're creative. >> it tells me absolutely nothing. >> that was a trick question. >> that you want to be on the other side of him at lunch. >> look at that smile. there's that happy smile. joe biden there, max baucus, still chairman. interesting. there's jack leu, budget director. current pal as well. >> if you're president, you want to sign something, you want to sign something, you want to have bipartisan support and if you're forced into it and you can tell your left wing you were forced into it, you'd love to give the

country $850 billion worth of tax cuts. worry about the spending cuts after christmas and new year's. >> and if you get don't ask don't tell -- >> not only that, organizing for america, which is the president's off the limit, off the white house organizing group has been working the issue very, very hard the last 48 hours. >> what's that group? >> organizing for america. >> but that guy who wrote the column said the president's not using that group enough. >> my point is he disappointed the left wing on taxes. they didn't want this tax bill, but he's going to give them something on the cultural front if he can. his own political organization is working on this very hard. they were silent on the tax bill. but they're working very hard on

this. >> superman movies where they roll back history and stop, fly around. exactly the point. if the -- would the left, the progressive left, had he said i'm with you guys. had he gone right to the mat with them through christmas and new year's, no tax cut, taxes going up in january, no new s.t.a.r.t., no dream act, would they have blamed him for that? that's my question about critics per se. with r they always critical? >> a lot of them. some would have applauded -- >> they have have liked it. >> the time to go to the mat was before the election, frankly. >> one other thing is this. there are lots of signs that the economy is improving now. on a top level. not for the unemployed. the fact -- >> when is the $2 trillion going to get spent?

>> that's what the president was taking to the ceos about the other day. the white house wanted and needed this bill so as not to get in the way of whatever movement that is. >> erin burnett said it was the best meeting with business people there's been in two years. >> pretty low bar. weren't any good ones until now. >> thank you. erin burnett says it was a good meeting and you say it was. thank you howard fineman. fine point on there. gentlemen, have a nice holiday. coming up, turns out the repeal of don't ask don't tell could become reality. three new republican senators have seen the light sometimes debate matter. sometimes, you have relatives, friends who turn out to be gay. i think human development is going on here. people are are changing their minds. that gives the democrats the 60

votes they need. another big victory for the president if it happens. ah, it's stinging a little bit more than usual! yeah, you'll get used to it. the longer you keep your high mileage car, the more it pays you back.

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f. after 15 republicans helped

house democrats pass the repeal, the senate appears to have the 60 votes necessary. a senate vote is expected tomorrow. is this finally going to get done? with us now, kirsten gillibrand. we are so lucky to have one of the stars from the senate. it's so great to have you on on an issue i think that's going to make you happen p pi. is this going to be history this weekend? >> definitely. fundamentally, this is one of the most corrosive policies we could have. it really goes to the heart of who we are because in this policy, we've lost 13,000 personnel. more than 10% of our foreign language pespeakers. these are the men and women we need. we need all our best and brightest fighting then we have

two wars and terrorism all around. >> speaking of best and brightest, you have about four republicans joining you in this. the twa senators from maine -- what do you think turned this into a bipartisan push? i'm also hearing this rumor, the word's out that once this comes to a vote and you pass the 60 mark for gets it to a vote, then you're going to have a lot of republicans jump on the band wagon at the last. >> that would be fantastic. i would be delighted to welcome all of those republicans who believe this is a policy that has to be repealed. i think it's just a generational issue, chris. i think over time, people's views have changed and people realize this is about military readyness. we need all of these men and women serving. think of the countless number of

people who haven't joined because of this policy. for my part, i think it's the civil rights march of our generation. it's about quality, equal rights, civil rights. this men and woman want nothing but to serve this country and are told they can't based on who they love. >> let's look at what senator mccain said in 2006. let's listen. >> the day that the leadership of the military comes to me and says, senator, we ought to change the policy, then i think we ought to consider seriously changing it because those leaders in the military are the ones we give the responsibility to. >> he actually did say that, senator. he said it ought to be changed, he'd be with it. let' ask you about something i know you've been involved with with senator schumer.

the first responders health issue. what is the health crisis facing people involved in dealing with the initial horror of 9/11? >> as you remember, these were our first responders, the ones running up the tower when everything was coming down. what happened is the toxins released were so horrific, they are now dying of cancer and other diseases. you have to remember the families that lived at ground zero, the children most vulnerable. they're experiencing asthma and other lung ailments. >> what's going to happen? you've got about few days left. is it going to get done? >> it is going to get done. we're going to have a vote just on the 9/11 health bill and i think we will have the support to pass that bill. i'm looking for a christmas miracle and i believe that

people of good will can come to be the. >> please come back to "hardball" often. merry christmas to you and everybody in the empire state. let's turn to u.s. congress from colorado. thank you very much for joining us. people tell me you're the first openly gay person who's been elected as such. didn't come out afterwards. let me ask you about this whole question of dealing with this issue of open service. are we going to get there? >> you know, we absolutely. we should have 20 years ago. this issue is going to meet with a collective sigh when it's done. the public, the military, they have so moved past this. we're fighting the battles of 20 years ago here. it's time to pass this and move on. >> what do you think's going to be implementation? i'm allowed to have an opinion and i'm for it. i am concerned about the differences it's going to create. asking how you're going to deal with sexual attraction in the military.

they used to separate by gender in barics. is there a need for further rules or just common sense. >> nonissue. we have gays and lesbians living in college dormitories. what are they going to do? and firefighters, police forces. we have strict rules of behavior that members of the military undertake. same sex, opposite sex. those rules all hold. they're important rules to have about what people do. but it's a nonissue for this generation. >> you're a young guy, but isn't for -- we study these polls and generally, 70% has changed. then you see those guys in the fighting unit of the marines and army. that's where you get that pushback. what do you make of that? >> part of the reason that poll was done so well, not only l do they ask what do you think,

would you be worried, then they are -- the problems with r hypothetical, not real. >> were you surprised by this statement? i find it wonderful in a way because it showed it's not the caricture people have. five out of six who said if they were allowed to come out, they wouldn't make any statement to that effect. they would go along with the way it is now, but voluntarily. they wouldn't make an issue or statement about their ide the. >> who goes around making a statement? you don't wear a sign that says you're gay or straight everywhere, but if it comes up, your partner happens to be the same sex or opposite, they kind of figure out whether you're gay. that's just a really strange way of looking at it. i certainly don't. >> you're so cool. you're so -- you are the new

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first, what's the zipper club? here's a hint. bill clinton and larry king are both members, but don't get the wrong idea. listen to this unscripted exchange from last night's finale edition of "larry king live." >> i'm glad to see you here and still up and going. >> we're both in the zipper club. by the way, you looked very good last week in the briefing room. the suits wanted me to remind

you what the zipper club is. if you've had open heart surgery. i thought everyone in the world knew it. >> you know -- >> do you have any question for the president. >> i'm glad you flaclarified th. >> i see what you mean. oh. >> this proves that "larry king live" really was live. last night, bill o'reilly needled sarah palin on her appearance with kate gosselin. watch the mama grizzly hit back at bill. >> is that presidential, you and kate gosselin in a forest, people would say, you know, it doesn't elevate the former governor of alaska and you would say -- >> i'm sorry that i'm not so hottie totti and don't do this

before i make a statement. >> would you appoint her to a cabinet position? >> what do you think? >> i'm just giving you a little jazz, governor. you know how i am. >> i think bill o'reilly doesn't think she has what it takes to run the most powerful country in the world. last year, newt gingrich gave his entrepreneur of the year award to dallas areas dawn riceas. the owner of the topless strip club. he said he didn't realize the nature of her business, so they disinvited her from the awards dinner. but one year later, the pack sent her a membership card and asked for a political donation. she responded by sending newt a v.i.p. membership. for tonight's big number, patrick kennedy's retirement

next month will be the end of the huge era in american politics. how long has a member of the kennedy family been in federal office? 63 years. as long as i can remember. tonight's incredible big number. up next, the five biggest political whoppers of 2010. this is going to be great fun except for those who committed them as we count down the biggest ones of the year. we get double miles on every purchase. so we earned a holiday trip to the big apple twice as fast! dinner! [ garth ] we get double miles every time we use our card. and since double miles add up fast, we can bring the whole gang! it's hard to beat double miles! i want a maze, a sword, a... oww! [ male announcer ] get the venture card from capital one and earn double miles on every purchase, every day. go to capitalone.com. i wonder what it could be?! what's in your wallet?

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stocks ending mixed. the dow jones industrials slipping seven points, s&p 500 clinging to a two-year high with

a one-point gain and nasdaq with a 5.5 increase. a quiet day on wall street despite being the quadruple witching. the euro moved lower as moody's downgraded ireland's debt rating. pharmaceutical stocks were the biggest drag led by astrazeneca. news of approval that the new blood thinning drug was delayed. after naming marketing gu to worldwide promotions. back to "hardball."

election years also guarantee a good dose of political fudging and 2010 was no exception. plit fact conducted a -- and tonight, we bring you the biggest whoppers in the world of politics in 2010. joining me on this fun exercise for some, is willie brown and ron reagan. you're smiling. i'm reading your book. all i can say is wow. >> thank you. >> wow, when that book comes out, wow. it's finally written. it's going to stagger people. the fifth biggest whopper of the year, charlie rangel's claim that the report cleared him -- ron reagan? >> well, we all know charlie.

you feel kind of sorry for him, but he got caught with his hand in the cookie jar. if we're going reward that kind of lying, we ought to mention john ensign's parents claiming they gave $90,000 to his mistress just out of the goodness of their hearts. not to keep her quiet or anything. >> i like the way you do this. let's go to mayor brown. speaker brown. charlie is very lovable and likable, but his spin on this thing is world class. that's all i can say. your thoughts. >> i think he genuinely believes that. he still believes that today. if you notice that when he was finally convicted, when he was censured, he said, i'm very pleased with what you've done. i believe i'm innocent. he did not in any way apologize. so he believes it and frankly, when it comes line, you have to separate the person who's uttering the words.

if they really believe it, they have a problem. >> i believe it should have been a rep remand and i believe something said by congressman fattah. you don't want to be judged in a political season. next one, the fourth biggest, frequently circulated conservative talking point that democrats were going to raise taxes on small business owners. a republican congressman claimed -- mayor brown, 94% of small businesses are going to get whacked because the democrats want to limit the tax cut to people that make under 250. >> that's an out and out lie and the man who uttered those words know that. we regularly say what we need to

say in a situation in order to enhance ourselves. that's just standard politics. >> spoken as a true exoffice hold holder. ron, you take this one. here's rick scott. his ridiculous charge about the stimulus bill. let's listen to him do it here. >> and we know the stimulus has not created one private sector job. >> now, this is one real big mistake i think voters made this year. mayor brown, i really think a mistake was made by the voters of florida. they've generally made smart decisions. this guy should not be in office. not a single job. we spent a trillion dollars in stimulus, a third of that is in tax cuts and doesn't create a single job. that's his claim.

>> yeah, go ahead, mayor. i'm sorry. >> he is just out and out wrong. i suspect his wife probably told him, you can't say that. just think, at goldman sachs, they created jobs with that money. at the auto industry, they created jobs with that money. so don't say it didn't happen. you can say democrats didn't do enough or they're not, they shouldn't get any benefit from them, but one job, are you kidding me? >> rick scott is such a trustworthy guy. wasn't it his health care firm that was fined over $100 million for defrading medicare? >> that will get you elected governor of florida. >> my hero, michele bachmann here, who's been named to the intelligence committee. there's a whopper. this is the second biggest whopper of the year. it was a outrageous charge that

president obama's trip to india cost $200 million a day. and the false rumor was picked up and repeated by michele bachmann. >> the president of the united states will be taking a trip over the india that is expected to cost the taxpayers $200 million a day. >> you know where they got that? from some local indian newspaper. they wanted to believe it, so they ran it like it was truth. it does cost about 5 million a day. they did estimate that based on clinton's trips, but they just come out with $200 million a day. >> based on nothing. some paper in india throws this figure out there and the republican party picks it up and begins to run with it. there are people thabl this nonsense. >> i've suggested that michele

bachmann does sort of represent sometimes the behavior of a zombie, that she seems hypnotized. why does she just mimic something somebody puts in front of her and states it as a fact? can't she do any discernment and say, this doesn't quite make sense. >> you're making an assumption that people who get elected to office are people who can think, purssue and reduce themselves t quality information. she is not in that category. the voters elected her and they deserve that idiotsy. she clearly believes 200 million and that doesn't have to be a factual foundation. that's just how out to lunch she is.

>> i know she spends a lot of time going through the newspaper racks from the indian press. >> we laugh about her being on the intelligence committee, but that's an important sort of post. actually a little disturbing that she's going to have access to top secret cables and things. she's a loon. >> let's not escalate this. >> she may not be able to find the meeting room. >> it's getting worse. going to change the subject. drum roll, please. the americans attack line, the republicans attack line, the reform was a government takeover. let's listen to this one. >> pushing through a massive government takeover of our hemt care system was certainly not a good idea. >> this isn't reform. this is government takeover. this is about control. >> all we need is enough in the house of representatives to do the right thing for the american

people and they can be spared this big government takeover of one sixth of our economy. >> this is not the president's house cht this is not the democrats' house. this is the people's house and they don't want a government takeover of health care. >> the american people are concerned about the takeover of health care. >> i want to expose how agreenlgs this government takeover of health care is. >> are we watching a woody allen movie? did they get their talking points from frank lunts? some guy on the beach in santa monica is knocking out the term knowledge. it is reciting. they sound like parrots. >> this guy -- frank lunts is basically a genius on words and what he was paid to put these words together, he deserves whatever he was paid because every single solitary republican

bought it. not only did they buy it, they sold it to the american people and the way they got away, there were p not the clear outside, uninterested with no agenda to push voice saying, wait a minute. it's a lie. when ever these republicans were interviewed, they got away because nobody said, what do you mean, takeover? define that. with are you talking about a cue? something happening in south america or africa? he would have been laughing his rear end off. >> years ago, i remember reading about these guys living on a boat. he's -- >> the guy is really a genius. >> government takeover. you know, i don't want to government getting involved with medicare either.

and by the way, you know who took over health care in this health care bill, the insurance companies. the requirement is you buy insurance from an insurance company. there is no public option. this is a private sector approach all the way. i don't know. i think it came from the heritage foundation and they're calling it socialist. thank you, mayor brown. have a nice christmas. you, too, ron. good luck with the book, but i know it's going to be a major, major explosive bit of publication. a hell of a book already. i'm loving it. i'm stunned by it, but anybody who doesn't read it is crazy. thank you. we'll be getting you on to talk about it when it comes out officially. up next, the tea party has its own on congressional republicans warning the tax cut deal violates tea party principles. is the relationship between republicans and the tea party already on the rocks? will this marriage last?

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it seems that change has come to the senate tonight with

the death of this $1.1 trillion plan. >> welcome back to "hardball." that's mark kirk from illinois and last night's collapse of the trillion dollar spending bill, the bill was stuffed with earmarks by both ds and rs. it's the kind of tea party deplores publicly and privately. howard fineman wrote -- so will the tea party and the gop clash or join together. jetson phillips is the founder of the tea party. john feehery is joining us as well. a republican strategist. gentlemen, i want you two to lay out for me sharp on the issue, what's the difference between somebody who cares about how government is run and somebody who is inside it? it seems to me one of the people inside it, one of their differences is, they want to stay inside and they think it helps them packing bills up with pork. >> well, the two are not necessarily mutually exclusive

but you're right. alex tocqueville once said democracy in america will remain safe until the politicians discover they can bribe the americans with their own money and that's kind of what has happened now. and americans have finally gotten tired of it. they're finally saying, no. they're finally saying, hey, you can work inside of the system if you want, provided you listen to us, and if you don't well we'll just like they do at wrigley field and you're out of here. >> yeah yank the pitcher. john, it seems to me, though, that you and you grew up -- i'm older than you -- but we kbru up thinking that a congress person r&d likes to write the newslert home. they got a bridge fixed that has been made something in a historic site. these little doo-dads go on the front page of their newslerts isn't that what they all want to do is claim continue ben these they brought home. >> chris, i've been up here about 20 years and we've gone through these periods where politicians get the message. did not spend anymore money and every republican that i talk to up on the hill they have a

simple message, cut spending, create jobs, let the private sector create jobs and i think hoots that's what the republicans are going do, i think that's what they'll continue to do and defeated in earmark in the senate yesterday. i think that it was a big victory for the republicans no doubt about fla. >> how do the appropriators. how can you beat the appropriators what changed. >> it's fascinating, chris, nobody wants to be on the appropriators. you got on the appropriatations committee and now hey don't want to be on the appropriations committee, they have a tough time gets elected it's a real sea change. the appropriators will change their tune. i think that's a good thing for the country. >> arlen specter. >> liberal. >> you call him a liberal, fine. per years, for years he got relected, relected, re-elected because he was on appropriations and would say i did this for

scranton, pittsburgh, blah, blah, blah, it didn't work this sometime no it doesn't and that's sea change that john was talking about. the american people are just truly. >> what about states like west virginia that live completely on pork? covered that state in asphalt in buildings, right. >> how many buildings in west virginia that aren't named after the man. >> it worked, he got re-elected every six years. >> he's proof of the tocqueville theory. >> the patriots put out a memo quote we must not rest. there is more madness to come and they're just waiting for us to go to sleep. we'll be vigilant and we will be watching. how do you guys keep a lot eye mean zealotry is short-lived. how do you keep them involved when they're not employed by this business of tea party work? >> keeping people involved can be tough because there's ups and downs. and we're fixing to go into a lull with the holidays and everybody leaving washington.

we just keep them informed. i know the tea party nation we send people out. >> i hope that you can cut a deal with in president even though you don't like him on long-term spending cuts, that would be a great thing. thank you, john feehery it's a short segment because i don't want to get in the way of my speech in a few minutes. you obviously went to catholic school. >> appreciate it, yes. when we return let me finish with why president obama did the right thing about he cut this deal with the republican, politically, because he's got a lot of other things coming the right way now because of it. you're watching "hardball" only on msnbc. ♪

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let me fiber r finish tonight with our president. some have been brutal toward him as of late, they've used terrible words to describe the decision that he made about the tax cuts. well here's my cut at it, people who say he sold out and they have a right to say if they want to, have it wrong. there's a difference between what the french did in world war ii and what the english did, the french sold out. they turned their country proud france into a collaborator with the third right. that's what pattang did, that's what the gulle greatest frenchman did. they got their troops off of the continent. they evacuated. and by doing so saved the british army to fight again. they avoided catastrophe. what did obama do, he knew what was coming. the republicans won the house of representatives in the election. they're coming into power this january 5th, their first order of business hr1 would had been to cut taxes for everyone to take historic credit for cutting the taxes on everyone that the

democrats let go up. it was as clear as day for anyone willing to look straight ahead and see what was coming. this is what president obama did and made the necessary decision, cut the best deal he could to get extended unemployment benefits and a cut in the payroll tack for employees. he got that, plus a number of other democratic measures and avoided in the decision giving the republicans a giant hammer to use against them in 2012 and future elections. that they, the republicans, cut taxes after the democrats had let them rise again, and one more time there's a huge difference between a sellout an a strategic retreat. our president did the smart, and, therefore, good thing for the country, for his party and for history. their critics well they're critics. they have a right to criticize. he, barack obama has the job to lead. as a result we've got a good shot at two vital successes that could have been crushed. the end of don't ask, don't tell. the nuclear arms s.t.a.r.t. treaty. to end this congress with