MATTHEWS: It seems like after all of this long talk, well, let‘s go to Senator Schumer, we have him joining us right now, the strategists will be right back later. Let‘s bring in Senator Chuck Schumer of New York, a member of the Finance Committee and a strong champion of the public option.

You had two votes today, Senator, one five Democrats voted against, the public option offered by Jay Rockefeller, then you lost with three Democrats voting against you. Is there hope for the public option?

SEN. CHUCK SCHUMER (D-NY), FINANCE COMMITTEE: Oh, yes, I believe there is. If you follow this closely, we said all along we never expected to win in Finance Committee. In fact, there some were who saying we were going to get so few votes we shouldn‘t bring it up.

We gained votes today to get 10 votes in this, which is the most difficult terrain for the public option because the Finance Committee is more conservative than the Senate Democrats as a whole, and the Senate Democrats as a whole are more conservative than the House and the conference.

So this was really good news for us. We‘re clearly not there, but not a single Democrat has said I‘m absolutely against the public option. Chairman Baucus said he likes it but he wants to see if it can get 60 votes. And we‘re feeling that we might get there.

MATTHEWS: If you lose by the-lose the same percentage of Democrats on the floor or anything like it, you can‘t get-well, you‘d be lucky to get 50 votes, wouldn‘t you?

SCHUMER: Yes, but.

MATTHEWS: How many Democrats oppose the public option right now in the Senate?

SCHUMER: Well, very few. Even Conrad and Baucus today said that they were open the public option as we move to the floor. So, there has been no commitment. Senator Baucus said that he needs to see that it has 60 votes. That‘s a reasonable request, and we‘re going to show him.

I have talked to every member of the moderate Democratic caucus. None of them have closed the door on the public option. There may be some adjustments and tweaks we have to make, but I think we‘re in pretty good shape.

And then you get to the conference where Nancy Pelosi says she wants a strong public option. And as you see it unfolding, we‘re moving in the direction of getting a public option.

MATTHEWS: Mr. Conrad disagrees with you, right? He says there‘s not enough votes for 60 votes. You can‘t get a unanimous Democratic Party or near unanimous vote for a public option. So, there is a disagreement on this. Right?

SCHUMER: There is a disagreement, but I think that today‘s debate, where we clearly had the momentum, where the people against us were quite positive in their comments on the substance.

And one other thing that‘s happening. It‘s sinking in. You know, in August the right wing launched all of their attacks on public option and said it‘s a government takeover.

What has happened now is as people learn what it really is, we‘re not going to get Republican votes, that‘s for sure, but more and more Democrats are open to it. As I said, when we began this morning, we were two votes fewer than we had on the vote itself. We were pleasantly surprised by getting 10, and with some moderates voting with us. And so-Bill Nelson, Tom Carper who, you know, are no different than the moderates on the floor.

So, I think that we‘re feeling good. And all of us are pleasantly surprised that we‘re making progress. A month ago, people said the public option is dead. They‘re not saying that anymore.

MATTHEWS: Let‘s take a look at this. I want your response on tactics since you‘re a leading member of the Senate. Here‘s a TV ad that‘s running in the District of Columbia and also running in Montana. Let‘s listen, Senator.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Last June, I collapsed because of congenital heart problems. I need open-heart surgery but have no insurance and no company will insure me. My friends and family have been a blessing. With hearts as big as the Montana sky, they‘ve helped with bake sales and benefits. But my wife and I still owe over $100,000 in medical bills.

None of this debt would have piled up if I‘d had the option of buying into a public health insurance plan. Senator Baucus, when you take millions of dollars from health and insurance interests that oppose reform and oppose giving families like mine the choice of a public option, I have to ask, whose side are you on?

(END VIDEO CLIP)

MATTHEWS: Is that hardball working, Senator?

SCHUMER: No, it‘s not.

MATTHEWS: I know the interest groups, they come by and they love this stuff because it‘s the hardball they love, but are the netroots and the people like that who are playing tough with these guys working and helping you up there?

SCHUMER: I think it‘s-yes-no, it‘s hurting us, and I wish they wouldn‘t do it. What we have to do is show Max Baucus that we have the votes. Today he said he likes the public option. If he thought there were 60 votes on the floor of the Senate, he would be for it.

His job is to get a bill through, and we all know that getting a bill through is job number one. And we‘re showing him. My guess is that if you ask Max Baucus at the end of today, he was impressed. He was impressed with the arguments. He was impressed that we picked up some moderates on the Finance Committee who people didn‘t expect. And that‘s going to continue on the floor.

MATTHEWS: Are you hopeful about Maine? You have got Senator Olympia Snowe out there discussing this issue. She was against you today, but I‘m wondering, according to the polling I‘m getting from the-again, from the interest groups that are pushing for this on the liberal side of things that overwhelmingly the people of Maine want the public option. Is that going to help you?

SCHUMER: I think the polling is helping us. After all of the attacks leveled at the public option, a New York Times survey which asked the question right down the middle found 65 percent of the public are for it. And that‘s what Democrats are realizing.

Here‘s what is going on here. We have to bring the whole party together. We can‘t rely on any Republican votes, as much as we would like to have Olympia and hope we will have her. And so the more moderates in the party know that they have to come together with the more liberals in the party, and there are a whole bunch of different issues.

And I think, my view, the way I would structure it, having a public option is something that everyone can support and they‘ll give us some flexibility in other areas. And I think as those of us who are putting together the final bill will study it, that‘s what others are going to find out.

So, you know, we lost today. We said we were going to lose before the day began. We didn‘t expect it would be this close. And there‘s momentum. It‘s going to keep getting better. Better on the floor than in the Senate and better in the Senate Finance Committee and better in the conference where the House has 70 to 100 members who say they won‘t vote for anything without a public option.

MATTHEWS: Well, you‘re a fighter, Senator Schumer. It‘s good to have you on the show. Clearly, you‘re not giving up. You see victory there. Thank you so much for coming on.

Let‘s go now to Republican.

SCHUMER: Thank you. Keep watching.

MATTHEWS: . Senator Orrin Hatch of Utah. He is a member of the Senate Finance Committee.

Well, there is Senator Schumer putting the best face on a 13-10 loss. Three Democrats joined your party in opposing a public option. Five Democrats joined you on another vote. Where does it stand, the public option, right now?

SEN. ORRIN HATCH (R-UT), FINANCE COMMITTEE: Well, it‘s going to be very difficult. Look, the Democrats are going to do everything they can to pull every trick they can to try and get all of the Democrats lined up to go with a public option.

But, look, if you pass a health care bill that involves one-sixth of the whole American economy and you don‘t get at least 70 votes, meaning bipartisan votes, you‘re not doing what‘s right for the American people. And I can tell you right now, Doug Elmendorf said that it‘s virtually next to impossible to be able to have a public option which would be a level playing field.

There‘s no way it would be level, and that‘s one of the problems. And I think the people out there realize that. And they also realize that you know they promised the same level playing field for Medicare back in 1965. It wasn‘t long until they realized they couldn‘t keep up and had to start setting prices.

Today Medicare pays less than 20 percent to doctors, less than 30 percent to hospitals, and by the way, Medicare‘s $38 trillion in unfunded liability, that‘s what you get when you just have the federal government involved.

MATTHEWS: Do you think there‘s any chance-let me ask you if you would be open to it. If this thing looks like a draw, if it looks like the Democrats are not going to get enough of a bill by Thanksgiving that they can claim victory with and they see that coming, is there any chance they‘re going to sue for peace like I guess we did with Laos back in the ‘60s when Kennedy said, we can‘t win the war, let‘s get together and go to Geneva?

Is there any chance that your party would want to help this president get anything through, or do you want him to lose, period?

HATCH: I can tell you how to do it right now, I mean, there-in a bipartisan way. And there are some Democrats who really literally would like to work with us and get this done. There are ways of doing this, and ways of-but we‘re a long way from that right now.

And I have to tell you, the Democratic party has gone very far to the left. Some of our party has gone pretty far to the right. And to be honest with you, I don‘t know many moderate Democrats. There are a few, but certainly not like Chuck Schumer has been talking.

MATTHEWS: Well, there aren‘t many moderate Republicans left either. Let me ask you, Senator, as you know the Northeast is withering. Let me ask you, do you-would you sign on to any health care bill this year, any bill?

HATCH: Well, yes, if we could do it right. You know, to be honest with you, they want to do this public option or what I call a government option, and yet they want to take $500 billion out of Medicare. And.

MATTHEWS: Yes, I know. Well.

(CROSSTALK)

HATCH: Well, suppose they drop the public option and put in tort reform. Would you sign on? Right on that trade, right there. Get rid of the public option and go to tort reform.

MATTHEWS: Well, tort reform would be a way to go. I just read an article where.

HATCH: Well, would you be on the bill? Would you be on the bill then, or is it just a stupid negotiation? Are the Democrats negotiating with themselves? If no Republicans will join, why should they compromise with nobody?

HATCH: Well, personally, I believe what we ought to do is what we did with the original CHIP bill that everybody said worked beautifully. What we did is we block-granted it to the state, let the states set their own standards and work it out in the states according to their own demographics.

We have 50 states. We have 50 state laboratories. We can look and see what really works and what really doesn‘t. Pick and choose from the other states. But the fact of the matter is if we did something like that, there‘s about 80 percent of health care that I think we could bring both sides together on.

The problem is when you get to the money, Democrats are-they want to spend and they think everything can be solved by spending. Well, we can‘t spend the way they want to. If we do that, we‘ll bankrupt the country and we won‘t get a very good health care bill to boot.

You know, the federal government isn‘t the last resort. It isn‘t the last dance in everything.

MATTHEWS: I understand.

HATCH: In fact, it‘s a problem.

MATTHEWS: All right. Let me ask you about your abortion option. It sounds right to me. You basically say if a woman-obviously a woman, would want to have-if she would like to-want to have the option of having abortion covered in her plan, she would pay a bit more. Do you think that will pass the Senate, that proposal, your proposal?

HATCH: Well, I don‘t know. The thing I‘m really concerned about is having taxpayers pay for abortions.

MATTHEWS: Right.

HATCH: There is a high percentage of taxpayers that just do not believe in that and they don‘t want to be saddled with paying for abortions for other people. And we haven‘t done that since the Hyde Amendment back in the ‘70s.

And now all of a sudden even though they say abortions won‘t be covered, there are ways that it can be covered under the language of this bill.

MATTHEWS: I know.

HATCH: So I‘d like to change that because I think that we‘d have a much greater chance for bipartisanship if we could amend some things like this.

MATTHEWS: Except you still won‘t vote for the bill.

HATCH: Well, look, I could vote far bill if we did it the right way. You know, look, I‘ve been part of putting together very good health care bills for 33 years.

MATTHEWS: Right.

HATCH: I‘m not new to this process. But I‘ve got to tell you, it‘s a one-size-fits-all approach that the Democrats are taking. They‘ve tried to take advantage of the fact that President Obama is extremely popular and they thought they could just throw this over on the American people.

And they‘re not going anywhere because there are enough Democrats that are concerned about it, and almost every Republican.

MATTHEWS: Well, I think your abortion amendment makes sense. We‘ll see how that goes in the full Senate. Thank you very much, Senator Orrin Hatch of Utah.