>> this is the chris matthewings -- chris matthews show. barack obama la the picture of an activist president. the honeymoon has run its course and now he faces strong head winds with his inaugural goal. and health reform, will the sticker price and the debt keep him from victory. harassment, they don't have the numbers, but even in the minority, do they have figures on their side. and the republicans dukes are up. hillary is under the radar . is that because the president wants it that way? is she yielding the stage to the president? >> and kelly o'donnell covers congress and the battle for

health care for "nbc news." and clarence page works for the "chicago tribune" and cath leek parker works for the "washington post." and david brooks works for the norgets. you know how sometimes you can see a turning point in front of you. this is what happens now. barack obama confronts resistance as congress gets down to the birth pain of his biggest prize, health care. the daunting project that is worrying people. the auto industry and the national debt, by some estimates has reached 30% the size of our economy. plus the federal deficit could top 2trillion dollars this year and then the $1 trillion that conservative estimates that health care well cost. he says nothing will stop him. >> i love the people that got us

in this mess and said it is obama's economy. that's fine. give it to me. my job is to solve problems and not stand on the sidelines and harp and gripe. >> he's taken ownership, is he going to be the commanding force on the fight on health care? >> i wish. they made progress out there they a husband bill and senate bill moving forward. they're scaring the moderates let alone the republicans. the house bill calls for raising the top tax rate, to 52 or 57%. that's higher than france, spain italy, when you add this new tax surcharge they'll put on the rich people's taxes. that's just terrible for small business people in the midwest. in both bills, there's no serious cost control. they're making progress but they are -- they're proposing a bill, i think that is way out of touch with where the american people are. >> let's talk strategy.

they got al franken and 60 democrats in the senate. are they going to ram it through or still reach out and bring in a real coalition behind it? >> they're prepared to ram it through. remember senator kennedy and byrd haven't been around for a long time. we don't have 60 votes unless they get them back to washington. at the moment, they're talking about working with republicans and the president has invited the most moderate republicans to the white house to the oval office meeting. i'm talking about snow and collins, and people he play help pull over. >> the question is, would you rather the president got nothing done on health care a therefore didn't raise taxes or the president got health care through and raised taxs? what is the better position for him to be in at the end of the year? >> he wants that health care through. that's his signature piece. his strategy is to ram it through and maybe fix it, tweak it later, but get it put in place. i think what we end up with is going to look significantly

different than what they're talking about now. it is nol a trillion dollar health care plan, a $600 billion health care plan. and they're in a bad position in the house, they're thinking are they goss to force me to sign off on this. >> it is call for higher tax breaks for those in the top trax breaks. >> you can't lose by raising taxes on somebody else, other than those people that you want to vote for you. over 400,000 dollars a year is a pretty high bracket. he's committed to getting some kind of health care through this year. that's part the r-of the mandate that got him elected. he hand really brought up the grass roots guns yet. folks on the left are waiting for him to come forth with a health care plan that includes a -- e -- a public option, which is what he's got right now. >> you think the rich people are going to pay for the health care of the poor people, the middle

class people? are they going to do it and sit for this? >> that's a good question. the constituency of the democratic party is working class folks and rich hollywood people. he's not going to lose those from that base. the moderates are the one that david is talking about that he has to be nervous about. i think it is going to go through. >> you raise a point about the waste out there in health care. everybody knows it exists. wasteful tests and treatments. , et cetera. we a great health care system, but it is wasteful. is he getting to that problem? >> no. it is not him. he doesn't control the bill. the white house is over on the sidelines, for some reason which i don't understand, they handed it to congress. congress loves to talk about who they're going to cover and how they're going to pay for it to make it seem responsible. the basic problem is the underlying inflation in health care which is driven by perverse incentives, to give people the tests. they want the tests, they don't have to pay for it. if you don't touch that issue, you don't touch health care and

barack obama has been perfectly clear and perfectly bold in talking about this. but there's not a single piece of hgs, with the exception of the widen benefit that addresses that issue. >> that would put a tax on health care benefits people already get. >> we get. especially the rich people get benefits which he don't pay taxes on. most economists say you got to address that because that pushes costs up. they won't touch it because unions get these benefits and don't want to give it up. >> i look at the success of johnson, way back with health care. he'sed guy that got medicare in. people love medicare. it costs a lot of money, but the seniors, no matter how right-wing you are, i know people in my family, they don't mind taking every bit of this thing. is it a winner for the president and possibly a loser down the road? >> it is how you measure the goal posts, in a ceremony that he can sign health care, would be a huge victory. the details can be dissected for not only months but years to

come. one thing that the republicans are saying is if we rush this to get it done, there play be unintended consequences. >> aren't there moderate republicans that will vote for the plan and get defeated in the next election because they raised taxes. >> he gets it through this year. >> once they lose the election -- >> obama has gone out of the way to make tactical mistakes the clintons made. that's a source of confidence the democrats have. >> they have the votes to defeat it. the moderates said they need seven votes to block it and they have 10. they're energized. it is over medicare and inequalities. they're energized. there are a lot of them, because there are a lot of conservative democrats. the white house wants them to pay attention to it. i'm not sure about nancy pelosi. >> these blue dogs echo what you're saying. you're worried about what is going to happen at home when you

defend it. the republicans will bang away at taxes. it is a classic argument. >> back to the issue i raised ten minutes ago. would you rather be a member of congress from a suburban district that voted for a health care bill and nice signing ceremony but at the end you're asked back home, why did you raise my taxs to 57%? >> it depends on the demographics of your district. >> blue dog stricts. a lot of unemployment, and people losing health care. that's something they're mindful of. >> this is a choice american people have had to confront for decades. do you want a little higher taxes or health care. you got maybe to choose both. and poll four, the meter. will the president get health care this year? it looks rosey. this is unanimous. all 12 of our meters said yes, he'll get a health care bill. that includes all four of you. everybody solid on that?

let's go around the question. >> and just to lock you in on television. starting with kelly. will barack obama be able to claim a historic break through, a new american health care system by christmas? >> i can see a path to that, chris. >> yes. >> i think it is going to happen about by the end of the year, but it'll look different than now. >> a major american health care system. >> i think it'll be strong or it'll be a fiscal disaster. >> the big health care system that the liberal have been promising? >> i agree, i think it'll be carved up and changed to get through. >> and that's a public option. >> the public option has to be there. it play be shrunk but it is there. >> will he get a w next to his record. will this be seen as a big political win for him? >> yes. >> i like the way you said that. >> and -- later. >> and the tax like. this is rare around here. before we break, this week's

secretary of state hillary clinton fave the first major policy speech six months after becoming secretary of state. she kept a low profile, probably because both she and the president want him to be high-profile. you remember the advertisement about the 3:00 a.m. phone call and saturday night loved it. >> hillary, i'm sorry to call this late again, but i need your help. >> mr. president, what can i do? >> the c.i.a. confirmed that ron has completed a new fear device, it looks like the russians, the north koreans and hugo has been helping them about what do i do? >> mr. president, you could start by getting a hold of yourself. >> i can't. don't you see that i'm in a panic. a blind unreasoning inexperienced panic. >> first go to our key alleys, the -- allies the british, german and french and show them our intelligence. >> i'm trying to write this

down. french. show intelligence. i do apologize for calling so often. >> i don't mind mr. president. it is for the good of the country. although, if this is going to be a regular thing, i feel as though i should get paid or something, it is heek every night. >> well, do you love the cigarette there. she's getting paid. anyway, so when we come back, we're going to get into it. how has it worked out for hillary and the president. why has it worked out the way it has. was she smart to take the job.

chris: welcome back. last year you could not forecast that barack obama and hillary would get together. >> we've seen the tragic result of having a president who had neither the experience nor the wisdom to manage our foreign policy and safeguard our national security. we can't let that happen again. >> we're still waiting to hear senator clinton what precise foreign policy experience she's claiming. chris: they did patch it up of course and this week, secretary of state clinton spoke of their goals, joint goals in the first major foreign policy speech. >> i believe we have the right strategy, the right priorities, the right policies. we have the right president. chris: wow. she looks good and seems happy. maybe we should put that to the matthew's meter. we asked the meter who got the better deal out of the arrangement so far? ten say the president has,

including all four of you here. two on the meter say it is a tie. david, you say win for obama. >> he won the election. chris: in the deal. >> well, i think because he's a self-confident guy and the most self-confident guy in history of humanity. he controls foreign policy making from the white house. we've seen it in russia and the middle east. that said, i'm not sure you see a big policy difference between the two. i have not seen any daylight between the two. there have been rifts but they seem to be getting along even though he's dominating. >> chris: will they meet the standard baker set, there has to be a seamless policy administration. >> i'm always asking who is running it, and i can't see a difference. so yes. >> they have a good cop, bad cop thing going. chris: like what?

>> when hillary gave her speech. she was talking about iran and she said it was demoreable and unacceptable the way they were treating their peaceful visionaries. yet obama, the hope and change guy is much less forceful language in saying that he was mostly deeply concerned. he ramped it up a bit. he's still the stand back and big idea guy. she's there with -- talking with, about coercive diplomacy. >> back at the point, somebody leaked to the state department, she's tougher and hawkish on cuba and iran. that's not helpful. >> kelly, does that not surprise you that he leaks that? >> i think it gives the president a little hammer to the side that you're talking about. she also was more forceful when she was speaking about the u.s. culpability in the mexican drug problem. she went further than the president would. i'm often truck -- struck how she approached this when she entered the senate. keep your head down, earn

respect and look like the person that is this for the right reasons. she seems to be doing that. the right reasons meaning serving the president. chris: if she comes off as more hawkish than the president is that good? >> yes. and the iran case, she's more political. when iran happened, i think the first instinct was to be cool. she and biden had their mill antenna up. and they said we should be more forward. the elected officials were pushing obama to be forward. that's a legitimate role for advisory to play. chris: he plays the diplomat and she plays the power in a way. i thought there was two strengths to this deal. she is tough and brings in the deal making seal of approval in the middle east, because she's got great strength with israel and she can help deliver. is that not a major role down the road some >> if there's a deal. they did move this dennis ross from the state department to the white house. i interpreted there are many

interpretations of that. i think that centralized the decision making process. this is a very white house centered white house, with the cabinet departments having less power. >> she doesn't want to be in the situation where colin powell was where everybody knew he and bush and cheney didn't agree, so overseas diplomats said, hey, who do you talk to? powell, ain't the go-to guy. it is hillary's interests for her to have a seamless relationship with the president. their disagreement has been over timing and iran and that statement of indignation but at the same time she came out forcefully and talked about how, don't think because we want to talk that we're going to be weak. that was the obama position during the debates you'll remember. she has signed on wholeheartedly. she's a worker. she's never a show horse compared to a workhorse, just unlike the speech making and -- chris: that's because -- kelly, this speech she gave this week a

starter up of a higher profile. >> it wants to lay the groundwork for her. chris: so she can move bigger on the stage in the future than she's been. >> i think though, you're not going to see that much difference between him and her and the president. >> i think she's more show horse than you think. >> okay. >> when to start talking to iran. who pushes who on that subject is -- will be the crucial and potential dividing. chris: i think this is one of the great political mergers we've seen in our mill lives. this is positive so far. we've seen in our mill lives. this is positive so far. and scoops and predictions by

with a recap of the past 24 hours on royal caribbean's liberty of the seas. debbie from rhode island laced up the gloves in the fitness center. brooke molloy floated with friends through jamaica. late night explorers climbed mountains under the stars. and finally, jose rodriguez rocked the house in the karaoke club. that's the news. i'm erika, cruising with royal caribbean. why aren't you?

chris: kelly, tell me something. >> president obama and ted kennedy are not on the same page, with the president ready for a veto threat. it is the f-22 fighter jet. the president says we don't need it but lawmakers in massachusetts and georgia say it is jobs and with need it. it is a veto fight. >> chris, would you believe there was tension in the white house about how close barack obama should be to the naacp should be. they wanted to take bloomberg to

yankee stadium but the biggest event since the inauguration, the white house said, filmly, secret service said, security would be a concern, unofficially people were bidding a sigh of relief that they went off to a quiet armory in harlem. chris: why not yankee stadium? >> it play be too much of obama with the blook community and the civil rights community. there's still that campaign going on right now. >> and for a change of pace, i want to say something potentially positive about the economy. i was talking to the c.e.o. of the business development corporation, there are these corporations throughout the country. the c.e.o.'s had a meeting and they all agree that good borrowers are circling back and they're hiring people that were laid off and building infrastructure and getting ready for the recession to end or by their actions helping propel that recession towards its end. >> obama should do the naacp thing in national park since it

is empty. and the moderate democrats, mild manored democrats getting up at meetings on capitol hill and complaining about the specific provisions in the health care bill. for example, the taxes in the house bill would go up in 2011. it wouldn't actually take effect until 2013. 2012, you would have tax bus no benefits. and 2012 happens to be an election year. they hate that. that's the sort of thing they're hating. chris: when we come back, is it plausible that sarah palin could be the republican nominee for president in 2012. [captioning made possible by nbc universal]

chris: welcome back. next week sare ray palin leaves the governor's office. will she get the republican nomination next time? >> plausible gives me a lot of room. politicians but leaving that scrob will hurt her a lot. chris: is she plausible nominee? >> i think it is remote. >> i remember barry goldwater's nomination. it was disastrous in november for them. i don't find it to be implausible that palin could be nominated. i think the competition in the primaries stole it. chris: not plausible too. >> i'm going to lean toward

clarence. nothing is implausible anymore. >> i'm going with maasible. chris: in the interest of the far right and the far left and in the interest of elle television, i hope it is plausible. thank you. and that's the show, thank you for watching. see you here, next week.