>> this is "the chris matthews show." >> ask not what this country can do for you. >> the time has come. chris: president obama has worked to keep his ethnicity to keep people from seeing him. to win health care this year, president obama needs to find common ground with key republicans. is he trying his darnest not to make the clinton's mistake? the scooter case, we're

learning more why george w. bush turned down dick cheney's employee to save little bitty. hi, i'm chris matthews. michael's w. assistant, michael duffy. and ceci connolly, are -- from "the washington post." for a president known to manage his political moves with grace, it is a surprising example why this drives the country's conversation. here is the key part of the president's conversation wednesday night. >> the cambridge police acted stupidedly in arresting somebody when there was already proof that they were in their

own home. chris: for a look at the political dust-up, listen to rush limbaugh the next morning. now white policemen are under assault from the east room of the white house and the president of the united states after admitting he had no facts . but the cops acted stupidedly. chris: why do you think? was it something personal? >> it sounds like he spoke to the gut. i knew people inside the white house that were surprised. it's probably not a good idea to use the word "stupid." and what happened immediately after that you saw this conversation shift and ratchet up. people say barack obama doesn't like to talk about race. i don't buy that. too often in the country discussion in this race about

opportune --ism. chris: kennedy was a democratic kennedy. do you think the other night he says i'm a black man, i've got to talk from that perspective? >> i think he talks different from a perspective. we have to remember that he spent a lot of time looking at the issue of racial profiling. so it's quite possible that he cast a spotlight on a difficult situation in 24 country of something that is deserving of attention in his eyes and to perhaps cast -- to make us all think about something. but again, you know, immediately when it comes to race, people -- they go back to their corns and they take this defensive position.

and opportunism seems to hang on everything. and is it possible to have a productive conversation. chris: he made himself the focus of empathy. which side are you on? do you think hknew he was doing that when he started all this? >> no because the progress that he made with the sotomayor nomination because she did convince people by her bearing by her knowledge, by her experience that she was qualified. she was both of her race but beyond it. this is not what his political advisors wanted him to be doing up there. because it turns it into a racial conversation per se at the time when he's trying to be president of all country and feeds right into the narrative of what i call the r.n.c., which is all about fear, accusation and division. barack obama as president has to be about national unity.

chris: these people in the far far left are talking about whether he's a citizen this comes up. >> the press secretary calls it a distraction. he didn't have all the facts and he was not in a position to talk about i he was right to take it up because it's an issue that's important. and he's completely conversant. he knows exactly what to say. but i also think it came at the owned the press conference. he's a little punchy by the end. he was talking about if it happened t him. he got off track. chris: i think he's a little fatigue. these guys get up at 5:00 in the morning and it was c58. >> if you look at what governor due -- duval patrick said, he saidhis is every black man's

nightmare. this needs more exploring in a calm, rationnd. >> it's just a single to police thate's not completely clueless. >> he went through great lengths as a candidate to say that he could be president of all americans, he understood all the different cultures and wanted to learn about all the different cultures of america. this kind of thing sets him back with working class whites. chris: let's talk about health care. it got delayed this week obviously. at ts point he knows he's got to gain the support of a few republicans. he needs this big push. he's aware that president clinton made a big mistake back in 1993 trying to lay down the law as to what he wanted. >> plan that weapon present today is imbodied in this book as well as the bill.

it's very specific. it is very detailed and it is very responsible. chris: president obama is not to make demands. >> i'm confident at the end we're gogoing to have a bill th democrats and some republicans support. chris: the president acted like a cheerleader. go on, guys on the hill. come on, you guys can do it, you republicans and democrats. does he need to be more of a quarterback? >> i think this is a matter of timing. i think so far the obama administration has been wise to learn that lesson from the clinton experience. clinton he may have started with that booklet but they dropped 1,300 on the lap of congress and they were not happy with that. obama tried to be respectful of

the prerogatives. what you're hearing from members of congress including democrats who really do want to make this happen and are on his side is that they now want to hear about him some specific policy proposals. which tax proposal do you prefer? do you support something about an employer mandate? we now want him to weigh in on the specifics. chris: give us the three elements that will be on the package. >> if you see a big with baurp support it will be that every american carry insurance. it will be a very gentle slowly phased in contribution so that you don't have a complete uprising in theorporate world and that you will also see slowly but surely stuff to make doctors and hospitals start earning their pay depending on how they perform as opposed to just the number of things they

do. chris: mike, that's a smart dream. >> she said that's what it looked like if you have some bipartisan support. >> you do need bipartisan support. >> they know they may not get it. they may get a few out of the senate. when they talk as they have all yearlong about doing this in the senate with just 50 votes. it's not because they're not going to get republicans. it's because they're not going to get all the democrats. you can hear him -- he said a lot more that he was against than he was for. only one or two things that he was for. he refered to the holding as insurance reform not health care reform. health insurance reform which is a signal for people who have insurance we're going to help you too. but it makes it sound much less dramatic. chris: do you think they will get a bill? >> they will get the bill but it's a question of the timing.

chris: let's take a look at the matthews meter. we asked the meter to all our regular panelists when the senate vote on the final bill, will at least a handful of republicans go along with the bill? one says no. you're with the 11. you say there's likely to be a signature bill for the president with republican support. >> well, republican support may be one or two republican members of the senate. the two big sticking points are the whole question whether there's a public plan or not. and there's going to be semantic things about that. what type of taxes and how? i think in the end, they'll be able to craft something that may be able to get a couple of republican senators to get along. chris: "the final days of bush

and cheney." the repeated appeals for cheney for bush to pardon scooter little bitty. remember that he was acced of lying and obstructing justice. here's saturday night life's -- saturday night's take. >> we also put aside time to share them with each other. so tonight, we thought during this some what acromonious political season, why not share our valentine's with everyone? spread the joyce of work. for instance here's a former member of my staff scooter little bitty. roses are red, violets are blue, if i go to jail, you're going to go too.

happy valentines, scooter little bitty. do we even know anyone known scooter libby. chris: what really went on between cheney and little bitty and why president bush turned d. tell me something i don't know. we'll be right back.

chris: welcome back. "time" magazine's cover story brings back the final day of the bush-cheney era. as you rall libby was dick cheney's right hand. and the investigation about who first revealed that valerie

plame was a c.i.a. undercover agent. a c.i.a. found that libby on tructed justice and lied under oath. president bush repeatedly dodged a question about his pardon. >> i felt the punishment was severe. so i made a decision that would commute his punishment. a serious fine and probation. as to the future, i rule nothing in and nothing out. chris: so why did bush refe to go further and issue a pardon? time magazine had a advisor, i'm sure president bush felt there was a coverup. >> bush felt scooter libby bunt remorseful. that was important to bush.

bush did an own investigating. he did an own investigating. decided that he lied to the grand jury. he felt that was completely unacceptable. and they laid that on there on purpose. and finally as this source suggested, i think there was some concern that perhaps whatever they question they would probe, they really weren't sure if they were protecting each other. chris: they were both part of the coverup. >> this is maybe the most important partnership. this is the only time we've been able to get inside of it and listen to them fight. and they fought really right down to the end -- chris: and this is almost a physical confrontation. you reported that there was almost a point where cheney was

about to crossed the line. literally the relationship was supposed to fall apart. >> when he told him i'm not going to give him a pardon. they were astonished with how stunned -- stricken i guess un-- cheney made it very clear he wasn't going to accept that decision. it pops back up on the agenda. bush makes a de addition -- chris: the only motivation of the eminence of scooter libby would have lied to anybody was to protect his boss. there was no real motive except to protect cheney. he could have taken the fifth if it was about him. >> that's exactly right. i think this story shows is that there was another white house. chris: a cheney white house. >> yes, there was a cheney white house and the bush white house. the cheney white house was substantially in control and

only after his presidency is george w. bush trying to get his presidency back. and kudos to "time" for being there and helping examine that process because george w. bush is trying to show that he had independence from a guy that we all know really was running things. chris: wow. you guys -- we're coming this from washington. dick cheney is a presence in this city now. george bush has left. he's gone back to texas to write his memoires. dick cheney has unusually for a vice president stuck around. he's playing rear guard. >> i think in a sense both bush and cheney are thinking about their legacies and the history writing that east taking place right now. and they're aiming for somewhat different histories to be written. and that's what's going to be the fascinating thing to study and to have a better understanding of that period in our history. chris: this the ladder days, the president dodged the

question of scooter libby. he never got into the issue of purmry or obstruction of justice. >> what he showed is restraint. and that'srobably is prudent. one of the things i wondered in the way that it outlines how the president conducted his own investigation asked the right questions and asked a lot of questions. i coldn't help be wonder if he would have shown the same juris prudence in the lead-up to the iraq war. chris: do you think cheney would keep quiet from now on? >> i think the relationship is quiet. the relationship is much more bigger than the fate of little bitie. chris: libby's disbarred. he has lost his professional status. and he's standing up. >> it's a partnership born forged in loyalty

chris: you have to respect loyalty at some point. but then at some point, you have to within der about disloyalty the other : 2vosince 2006walmart s over 26 llion cor ac fluoreent light lbs. saving our customers over 7 billion dollars on their electric bills. save money. live better. walmart.n when the paths we take do determine our future. today we are communicating with each other as never before - and that requires a seamless network that is constantly growing better, smarter, and more secure. that's why our scientists and engineers in our labs, are taking the fastest technology in the world and making it mobile, better and faster - to keep pushing the internet further than anyone dreamed. last year alone we invested more in building america's future than any other company - improving and expanding our network, to keep you in control.

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...making good jobs even better. save money. live better. walmart. chris: welcome. michele, tell me something i don't know. >> the white house has been pushing for insurance reform as they're now calling it is using the mt. rush more argument and really appealing the thoughts of legacy where some of the veteran lawmakers are involved. think about your name to this landmark legislation. that's what's sort of being whispered in their ears. >> tim geithner who's the treasury secretary, he survived the backlash of all the bailouts that he helped orchestrate. but now he's got to rerg late wall street as a wall streeter. and whether he is a good treasury secretary will depend in the next six, seven months.

chris: ceci. >> he hasn't been able to play golf that much. i wonder is he preparing for a tournament? wants to meet tiger woods. what they tell me is he feels quite enclosed in the bubble and the simple thing to get out and walk is tough to do. even walks around the grounds can cause a security stir. part about what he likes hitting the links is that he gets to get out and walk. chris: does anybody play him? >> marvin. he caddied for the masters. chris: great. >> here are a couple of namentse you haven't heard but you should. one is miguel diaz and sam kaplan, these are two minnesotans who are going to be ambassador. miguel diaz is a theologian, cuban-born. he's going to be the ambassador to the vatican.

chris: he's pro-life. >> well, he's [speaking foreign language] . and sam kaplan is a very important donor but more important he was an original support of keith ellisson. and they're sending kaplan and his wife to morocco. he is very shrewdly working in america and global culture and trying to bridge them. chris: great reporting. next big question -- does barack obama watch his cloud on capitol hill? be right back.

if we don't act, medical bills will wipe out their savings. if we don't act, she'll be denied coverage because of a pre-existing condition. and he won't get the chemotherapy he needs. if we don't act, health care costs will rise 70%. and he'll have to cut benefits for his employees. but we can act. the president and congress have a plan to lower your costs and stop denials for pre-existing conditions. it's time to act.

chris: welcome back. this week barack obama began the second half of his first year in office somewhat rock ily. our big question has the president lost his clout with congress? >> probably not. it might be difficult to work with him, but they're going to need him. >> no, he hasn't. not with democrats. >> c.c.? >> not yes. he had a rough. but there's plenty of time.

>> the democrats need them. he needs them. chris: grand slam. thanks fire fighter a great round table. that's the show. thanks for watching. see you here, next week. there are moments in time when the paths we take do determine our future. today we are communicating with each other as never before - and that requires a seamless network that is constantly growing better, smarter, and more secure.

thas why ouscientists and engineers in our labs, are taking the faest technology in the world and making it mobile, better and faster - to keep pushing the internet further than anyone dreamed. last year alone we invested more in building america's future than any other company - improving and expanding our network, to keep you in control. and behind the scenes, that takes work by our employees, who pride themselves knowing, that because they do it right, you might not even notice. if all of that, makes your connections, faster and more secure... well, that's our business. at&t... your world... delivered. ...or if you're already sick... ...or if you lose your job. your health insurance shouldn't either. so let's fix health care.