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SYNOPSIS:

EMANUEL: Thanks, Chris.

MATTHEWS. U.S. Congressman Rahm Emanuel, chairman of the Democratic Caucus. So, with President Bush asking for more war funding what are the Democrats going to do about it? Will they finally stand up to him or continue to be taken hostage by this administration? And later, U.S. Congressman Pete Stark apologized on the floor for his comments that President Bush is amused when Americans are killed in Iraq.

(BEGIN VIDEO CLIP)

REP. PETE STARK, (D) CA: I want to apologize to my -- first of all, my colleagues, many of whom I have offended, to the president, his family, to the troops that may have found in my remarks as were suggested in the motion that we just voted on, and I do apologize.

(END VIDEO CLIP)

MATTHEWS: Stark`s apology and the Democrats` failure to take on the president after Iraq. Both ahead on HARDBALL.

(Commercial Break)

MATTHEWS: Welcome back to HARDBALL. Conventional wisdom says the unpopular war in Iraq creates political danger for the GOP. The Republicans. Then why are the Democrats unwilling to stop the war nor do anything about it? Nancy Giles is a social commentator and Paul Krugman is a "New York Times" columnist and the author of the new book "The Conscience of Liberal". Let me go right now to Nancy Giles. You have written an impassioned essay on this. What is your feeling about the Democrats and the responsibility they took last fall and they won that largely because of their opposition to the war?

NANCY GILES, CBS SUNDAY MORNING CONTRIBUTOR: Well, the piece that you refer to that I wrote, I actually did on television on Sunday morning on CBS. And I have to say to start with that it`s not just my anger at the Democrats but my anger at the entire system. I think it`s important and I think a lot of Americans don`t realize that when the Democrats were swept into office and they won the majority it was a razor-thin majority, Chris. And this was after six years of Republican control. So they have only had nine months to try to -- to put into place any of the policies they`re trying to do. I also think that the scalding that they took when it seemed as though any kind of comments against the war made you seem un-American or unpatriotic really scared the bejeezus out of them and I think they`re taking baby steps since then at getting their voice back. And what I believe they need to do is replicate the strength that they have been pushing forward, the SCHIP bill with what`s going on in Iraq. I mean a hundred billion dollars, it`s insane. I listened to the president`s speech with the military families and the people behind him talking about the money was needed for bullets and body armor. And I was like, what are you talking about? You mean -- what is going on with the money that has been spent, the waste, the war profiteering that`s been made and the money being taken out of this country and going into what seems like a cesspool where nothing is getting any better. And there doesn`t seem to be any kind of accounting for it. Anyway, I mean, I think that you had spoken earlier about the disenchantment that people have with Congress right now. I think they were under the misconception that the Democrats swept in this huge majority and they had the power to make things happen yet, and the problem is there aren`t enough independent thinking Republicans that are affecting even what their constituents are saying because the poll numbers are there, but most Americans want this war over. And they`re playing politics and not doing the right thing.

MATTHEWS: Paul, let me ask you about this. I have been through this in the Vietnam War and I watched the liberals, Humphrey, etc, benefit from opposition to wars. But, you know, I have never seen them act. I see this time Biden, Dodd, Edwards, Hillary, Kerry, every one of them on the Eastern Seaboard, every one of the so-called liberals has supported the war when it mattered. They keep supporting it. They keep letting you down. I don`t want to sound too radical here, but it seems to me that, every time you bet your money on the establishment, whether it`s center-left or center-right, their main goal is to remain members of the establishment, to stay there.

PAUL KRUGMAN, COLUMNIST, "THE NEW YORK TIMES": Yes. I mean, look, Rahm Emanuel is half right, your previous guest. The -- the Democrats now have a huge advantage on domestic issues and the trends. In "Conscience of a Liberal," I talk about that. The trends in public opinion, the trends in demography have all worked in their favor. And they are doing is, they have been burned badly on national security in the past. And they can`t -- they`re afraid to take on Bush, even though this is a massively unpopular war, because they`re afraid that it will somehow, you know, backfire on them. It -- it goes back. You know, they -- a lot of the Democrats believe -- wrongly, I would argue -- but they believe that they were punished for decades for having been right about Vietnam.

(CROSSTALK)

KRUGMAN: And now they`re afraid. So, they`re basically trying to keep possession of the ball, and they`re afraid to do anything that might upset things. They`re afraid that, one last time, Bush will pull the national security thing on them. But, no, it`s unforgivable, I would say. but I don`t think -- I think -- unfortunately, Emanuel`s calculations are probably right. Voters will not vote against the Democrats because they failed to end the war, when the Republicans want to expand, want to go out and attack Iran. It`s not -- it`s not actually going to hurt them that much, but it`s deeply disappointing.

MATTHEWS: Let me ask you, Nancy. If a voter goes out -- I`m talking about a regular person who goes to vote last November, and they voted...

GILES: Well, I`m a total regular person, so there you are.

(CROSSTALK)

MATTHEWS: I know. No, I mean go to vote, and you vote, like, in Virginia, or you voted in Missouri.

GILES: Right.

MATTHEWS: And you voted against the war, so you got somebody like Jim Webb, who is an unusual choice for Virginia. It`s a pretty conservative state.

GILES: Right.

MATTHEWS: But it was because of the war, to a large extent. Or you got rid of Rick Santorum and you got Bob Casey in Pennsylvania. What are you supposed to feel when, after all that effort of maybe switching your vote from an established family polls, you voted Democrat because you`re against the war? Isn`t something supposed to happen?

GILES: Well, yes, but, again, I mean, I know I`m repeating myself. I don`t think most people really, really get that the Democrats are not in the position to really make the changes that need to be made. I mean, they need Republican -- they need bipartisan help...

MATTHEWS: No, they don`t. No, they don`t.

GILES: ... to do that. I don`t think they get it.

(CROSSTALK)

MATTHEWS: Well, I don`t think you get it. I mean, you don`t need -- you don`t need a super-majority. You need 51 percent to simply say, no more funding.

GILES: Well, that`s true.

MATTHEWS: You simply say, no more funding.

GILES: Well, I`m not defending any of the Democrats that went ahead and sat back and voted for the war funding. I think that`s totally wrong. But I think most people do get the fact that it`s got to be a partnership. And this war is not -- it`s not a Republican -- well, I find it much more of a Republican war than a Democratic war.

(CROSSTALK)

KRUGMAN: Chris, can I break in here?

GILES: Oh, yes. Please do.

KRUGMAN: Because, you know, what happened in Virginia, yes, it was about the war, but it was also about macaca.

MATTHEWS: Right.

KRUGMAN: And what really happened -- and this is why, the Democrats, I think are so cautious, because they see the country changing in a way that works to their advantage. It was because of the ugly face of racism showed.

MATTHEWS: Sure.

KRUGMAN: And it doesn`t -- and the country, Virginia, won`t stand for that. And the Democrats are seeing that this is not -- this is a country that`s trending their direction and they`re very cautious. Again, no excuses. This is terrible, because Americans are dying while they...

(CROSSTALK)

GILES: That`s right.

(CROSSTALK)

MATTHEWS: Well, I think both of you are right. I`m being devil`s advocate, because I do get it, I suppose. But, you know, it`s frustrating, because General Grant, who has become one of my new heroes, because he really did oppose slavery. He really did want to do something to change things with Reconstruction after the Civil War. He said, you never win politically in America by opposing a war. I mean, that`s a profound statement. And I wonder if that -- if that`s the case...

KRUGMAN: And especially...

MATTHEWS: Yes.

KRUGMAN: ... especially given that the way they can effectively oppose this war at this point is to cut off funding.

GILES: I know.

(CROSSTALK)

KRUGMAN: And that is so easily spun. You know, they don`t have the votes to just stop the war.

GILES: Right.

MATTHEWS: OK.

KRUGMAN: They can refuse to pass a funding bill.

(CROSSTALK)

KRUGMAN: And that`s so easily spun against them. So, I understand their caution. But -- you know, it`s shameful, but I understand it.

GILES: Paul is totally right. I know. He`s right. I mean, short of stopping the funding, which could be spun in all kinds of ways to look like we do not support the troops -- and I say we because I`m a Democrat.

KRUGMAN: Right.

MATTHEWS: Yes.

GILES: But you know what? I feel like -- and I don`t know if Paul would agree -- the things that can be done, we need to use the media. The need to use the media in the same way that the Republicans can...

MATTHEWS: Thank you.

GILES: ... or that the president does. I mean, buy time on television. Get some of the families of those...

MATTHEWS: I have to go.

GILES: ... of those writers that, you know, that ended up dying in Iraq, and put them behind you, as they say, stop the money.

KRUGMAN: Yes.

(CROSSTALK)

MATTHEWS: Please, gentleman, lady, I`m sorry. We`re out of time.

GILES: Oh.

MATTHEWS: It`s great to have you. Please, both of you come back. Paul Krugman, good luck with "Conscience of a Liberal." And, Nancy Giles, it`s great to have you on.

GILES: Thank you.

MATTHEWS: Up next: Fred Thompson finally weighs in on the Terri Schiavo case again, saying it`s an issue for the family, not the government. What a statement. Will conservatives be happy with that answer? Some will. In fact, I think most will. You`re watching HARDBALL, only on MSNBC.

Originally broadcast, 10.23.07