CHRIS MATTHEWS: We start with health care reform and the abortion challenge. U.S. congressman Jim Cooper is a Democrat from Tennessee. Thank you for joining us on this day off for the world.

REP. JIM COOPER (D), TENNESSEE: Good to be with you.

MATTHEWS: Congratulations, as a Democrat, for getting health care through, but there was a price. You got 40 Democrats to vote for an amendment which basically took abortion coverage out of this program in order to get the bill passed. I'm told by one of your colleagues, Diana DeGette-DeGette is it?

COOPER: Uh-huh.

MATTHEWS: ... that she has 40 Democrats on the pro-choice side ready to vote down the bill if it comes back from conference with this provision in it. How do you cut this deal that saves health care?

COOPER: Well, first of all, Chris, as you know, it was a very historic night. The most important issue is to get health care to all Americans, men, women, children, everybody. This was a surprise, sort of last-minute amendment. A lot of folks were confused about the best way to preserve the status quo, the so-called Hyde amendment that has prevented direct taxpayer subsidy of abortion.

This is a new health reform plan, and a lot of folks don't quite understand it yet. And the Stupak amendment was really aimed at the exchange, and the exchange would really only affect 10 percent of the American people, about 30 million people, and that's a lot. And these would tend to be your lower-income folks, vulnerable, but not the poorest of the poor, who are already on Medicaid.

So the question is, how would the restriction on direct taxpayer subsidies affect the folks in that exchange? And this is something that we're still working out. The bottom line is this. The House bill will be substantially changed in the Senate. In fact, it may bear little or no resemblance to the House bill. That will be good news for a lot of choice folks on this issue. It will all determined by the senators, though. And as you point out, it could make the House passage of the bill look easy to try to get something through the Senate with 60 votes.

MATTHEWS: Well, not to be stubborn, but watching everything that happened Friday night, or Saturday night, I was not impressed or surprised, like you were, because I could see this coming. I kept watching and watching and watching this abortion juggernaut grow and grow and grow. There were 40 Democrats who voted for that amendment and then voted for passage. I can only assume Nancy Pelosi, being as sharp as she is, did what she had to do. She needed those 40, right?

COOPER: Exactly.

MATTHEWS: What happens if you lose them on final?

COOPER: Well...

MATTHEWS: Those pro-life Democrats? They may be inconvenient to the larger Democratic Party, but they exist.

COOPER: You're exactly right. You're Catholic. You understand. This used to be the core constituency for the Democratic Party. The key is helping people understand exactly what the Hyde amendment does. It's been law since 1977. Most people are pretty satisfied with that compromise. It's not fair. It's not easy. But that only affected direct taxpayer subsidy for abortion.

Now, with the new health reform, it's a lot more complex plan. It has a lot of indirect subsidies for various things in health care. So the question is, How do you get a complete health benefits package for men and women that would include choice and serve as...

MATTHEWS: Well, you keep-you tell me this over-you keep repeating the problem. What's the solution? There are, by the way, people who support abortion rights because they believe, ultimately, the woman has to make up the decision, after all the deliberation and counsel and advice and everything, in the end, that person, in a free society.

There are some people who hold that view who also believe the federal government shouldn't be subsidizing abortion. I think Joe Biden, by the way, Vice President Biden, is one of those who would not support funding but supports the right. Well, that may be too complicated for some people, but for me, it's easy to understand. You let a person make a decision you don't agree with, but you don't help them make that decision.

COOPER: Exactly.

MATTHEWS: OK?

COOPER: It's a free country. You can spend your money on whatever you want to.

MATTHEWS: Don't ask me to help.

COOPER: The question is...

MATTHEWS: Right.

COOPER: ... what's fair subsidy.

MATTHEWS: That's the way a lot of people look at these things.

COOPER: Yes. Exactly.

MATTHEWS: So what do you do with those people? How do you pass a bill that takes these 40 people, or some of them, at least-you're going to need this to pass the bill. How do you deal with it?

COOPER: Well, the Speaker was very artful getting the bill through Congress. It was a tough thing to get 220 votes. We nearly didn't get to 218.

MATTHEWS: Right.

COOPER: They had to pull out all of the stops, and this was one of them. I think, as members calm down, as members look at this carefully-one of the problems was the Rules Committee itself reported out language that said that the Stupak amendment codified the Hyde amendment. That was not accurate and it went beyond the Hyde amendment...

MATTHEWS: Explain how.

COOPER: Well, by affecting not only direct but indirect taxpayer subsidies. The Hyde amendment has never affected indirect taxpayer subsidies. For example, the second largest health program in America is a tax break for folks with employer-sponsored coverage. Anybody works for a private company gets some help from his fellow taxpayers to afford that coverage from the private employer. It's not obvious. It doesn't look like a government program, but it is and it's $250 billion a year. The Hyde amendment has never applied to that...

MATTHEWS: Right.

COOPER: ... should not apply to that.

MATTHEWS: But this-the problem with this is that it fits in the middle. It's a subsidy.

COOPER: For the 10 percent of the folks in America who are allowed to shop in the exchange...

MATTHEWS: Right.

COOPER: I actually think more people should be allowed to shop in the exchange. It's essentially acting like the federal employee-you know, federal employees have been able to shop from an annual menu for a long time. It works great. It works in all the states. It's worked for 30 or 40 years. Democrats and Republicans love it. We need a program like that so that all Americans can shop for health benefits in a sensible way. We can do that.

MATTHEWS: Well, OK. Thank you very much, Congressman.

COOPER: Thanks, Chris.

MATTHEWS: Thank you for coming over.

COOPER: Thank you.

MATTHEWS: Congressman Jim Cooper of Tennessee.

Let's bring in now Cecile Richards. She's president of Planned Parenthood. Cecile, thank you so much for joining-you know, we're hearing from Congressman Diana DeGette-I haven't had her on the program yet, but she speaks very authoritatively of the fact she has 40 Democrats who are pro-choice who will bring down this health care bill if it comes back from Senate conference, House-Senate conference, and has this Stupak amendment in it. Your view?

CECILE RICHARDS, PRES., PLANNED PARENTHOOD: Look, I think there are a lot of Democrats that are very upset and a lot of women that are upset about what happened Saturday night. This was-as you said earlier, this was sort of a last-minute effort, I think, to hold this health care bill hostage. And I think there are a number of Democrats who want to see a compromise in the health care bill and not the sort of extreme Stupak amendment that was adopted Saturday night.

MATTHEWS: Can you cut this in half? Is there-I mean...

RICHARDS: Sure.

MATTHEWS: How can you-I know you have to speak for Planned Parenthood, which I respect dramatically (ph). But Planned Parenthood is pro-choice. How do you get a bill which simply keeps the status quo? Doesn't make the government more pro-choice or less pro-choice, it simply leaves the law the way it is. How do you do that?

RICHARDS: Sure. Well, I mean, that's exactly the point, Chris, and that is actually what was in the bill, and it's in the Senate bill, as well. It was a carefully crafted compromise between pro-choice and pro-life members of Congress to say that the status quo was what should apply, that Hyde, which as Congressman Cooper has said, has applied since 1976, would mean no federal funding for abortion, but you shouldn't eliminate millions of women's access to purchase insurance coverage that covers full reproductive health care.

Unfortunately, that's what happened in the Stupak amendment. It literally is a middle class abortion ban now. It now impacts millions of women who would be able to...

MATTHEWS: Well, why did...

RICHARDS: ... purchase insurance...

MATTHEWS: Why did Speaker Pelosi agree to it, if it was bad?

RICHARDS: Well, if you'll notice, Chris, she actually voted against it. And it's very rare for the Speaker even to vote, but she did vote against it. The reason she-the reason it came up on the floor is that, literally, there were a handful of folks who were holding the health care reform bill hostage Friday night who said they would keep the bill from actually passing out of the House unless they got this amendment in. I don't think that's really how we want government to work. I don't think that's how...

MATTHEWS: Well, how do you want to...

RICHARDS: ... we want democracy to work.

MATTHEWS: ... deal with those people? You called them a handful of, but it was 40 Democrats...

RICHARDS: But look, here...

MATTHEWS: ... who voted for the-OK. Whatever, there was a number of them that were critical.

RICHARDS: Sure.

MATTHEWS: How do you deal with that critical number on the other side if you want a health care-how do you do it as a pro-choicer?

RICHARDS: It's a great question, Chris, and if you look at it, the compromise that had been crafted had brought a lot of those folks over. And that really is, I think, the question. There are a number of people who were looking for something other than the extreme measure that the Stupak amendment represents. They're ready to vote for health care reform. They're ready for a fair compromise. That was represented by the Capps amendment. Frankly, it's what's represented now in the two bills that are in the Senate.

So I think the-I think that was an anomaly. I think now we're all focused on the Senate, where I think cooler heads will prevail. You're not going to see this sort of 24th-hour attempt to derail health care reform. And I think that's really-I think we'll-I think there is a fair compromise that's still out there and that can attract a majority of folks in the United States House to vote for it.

MATTHEWS: Well, Cecile, I'm trying-as you know, I'm trying to respect both points...

RICHARDS: Sure. Absolutely.

MATTHEWS: ... of view, the pro-choice and the pro-life, because we live in a democracy and we work these things out.

RICHARDS: I agree.

MATTHEWS: The problem with the Ellsworth proposal, the one that you talked about, the Lois Capps proposal...

RICHARDS: Right.

MATTHEWS: The problem with that is it looks like an accounting trick. It looks like you're saying, OK, some of the money that goes into an insurance plan will go to abortion, some won't. Everybody knows that money's fungible and that this is basically an accounting trick. And I don't think it'll work with people who have a moral problem with abortion funding by the federal government.

RICHARDS: Chris...

MATTHEWS: I think you got to go back and cut at this again and find a different way to distinguish public support for health care and the individual right to choose to have an abortion...

RICHARDS: Right.

MATTHEWS: ... that those have to be two separate decisions. If the federal government subsidizes abortion, a lot of people believe that it's encouraging it.

RICHARDS: And listen...

MATTHEWS: You don't agree.

RICHARDS: Well...

MATTHEWS: You don't agree?

RICHARDS: What I fundamentally disagree with is your interpretation of what the bill was because the bill as written, that had the Capps language in it and the Ellsworth compromise, was supported by pro-choice and pro-life members of Congress. It was a fair compromise. It ensured that federal funding did not go to pay for abortions, which, as you said, is the fundamental point.

I think the real question is, what the Stupak amendment did is fundamentally rewrote the rules for women in America. It took millions of women, middle class women, and took away their right to even purchase health care coverage that included abortion care. And since a vast majority of private plans in America cover abortion services, and women are free to access those services or not, this bill-this amendment that was attached to the House bill undercuts the whole principle that no one should lose their benefits under health care reform. I think that's...

MATTHEWS: OK, let me ask you, as a political person, Cecile...

RICHARDS: Sure.

MATTHEWS: ... how do you solve this problem?

RICHARDS: I think-I think...

MATTHEWS: Because we disagree on that other amendment, by the way, and I don't want to argue it...

RICHARDS: OK.

MATTHEWS: ... because you're the spokesman, I'm not.

RICHARDS: OK.

MATTHEWS: But as I understand it, it simply was an accounting method to sort of have the subcontracting out of the benefit program for abortion rights for people who choose abortion as one of the options they want covered. But in fact, it was the same source of money coming into it from the government and no one was paying any extra money for abortion coverage.

(CROSSTALK)

MATTHEWS: And people believe if you don't pay extra for that-well if you don't pay extra for that, you're really getting it for free. You're really getting it subsidized. Anyway, how do you solve the problem of 40 people saying this bill's going down if it's not pro-choice, and 40 people saying it's going down if it's not pro-life, and you're Nancy Pelosi, you've got to solve the problem? How do you do it?

RICHARDS: I have great faith in the leader. The Speaker of the House is a very smart woman. She got us this far. She got a bill passed. I think what we're going to see in the Senate, as I said-this amendment, this-what I think was a very extreme measure that took away coverage for millions of women-this same amendment was offered in the Senate, and it was rejected by both committees.

There is a fair compromise in the Senate bill. I believe that's what will pass. And as Congressman Cooper said, these two bills are going to have to come together, and we're going to have to have a compromise that's acceptable by both bodies, which I am totally confident that we will.

MATTHEWS: Well, maybe it will be a deductible that's higher than the cost of the average abortion. I don't know what the deal's going to be.

RICHARDS: I don't know. We'll get you in on the negotiation, Chris.

MATTHEWS: It's going to be something like that. There's going to be...

RICHARDS: OK.

MATTHEWS: Pardon me? I'm telling you, we don't know what it's going to be, but there better be something because we don't know it, and that's a problem, Cecile. If I don't know what it is, I don't think Congressman Cooper knew what the compromise is, maybe Nancy Pelosi, the Speaker, knows what it is. But I haven't heard anybody explain that compromise, and this is going to be a bugaboo, and I've been predicting this for months. I didn't-I wasn't surprised by this.

RICHARDS: Well, we've been working...

MATTHEWS: Because I Kept hearing from people about this problem.

Anyway, your thoughts?

RICHARDS: Sure. I mean, we've been working on this for months, I mean, from the very first day we went to the White House...

MATTHEWS: OK...

RICHARDS: ... on health care reform. And I think Planned Parenthood has been in a position to really...

MATTHEWS: OK...

RICHARDS: ... work closely with both pro-life and pro-choice Democrats to make sure...

MATTHEWS: OK...

RICHARDS: ... and Republicans to make sure we get a bill that can pass both bodies and finally expand access to millions of American families.

MATTHEWS: Well, as we say in Philly, I like your attitude. Good luck.

RICHARDS: Thank you, Chris.

MATTHEWS: I hope we get a health care bill.

RICHARDS: OK.

MATTHEWS: Cecile Richards from Planned Parenthood.

Coming up: What's going to happen with health care in the Senate? My God, if you think it's tough in the House, the Senate-you need all 60 Democrats, basically. And Joe Lieberman is saying he's off if it's got a public option in it. Where are we going with this thing? The Senate is even tougher. The president has turned up the pressure, but how's Harry Reid going to do the job? He needs 60 votes. That means 60 Democrats, or without Lieberman, that means Olympia Snowe. There isn't any room for a mistake on the Senate side.

You're watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now it falls on the United States Senate to bring the baton to the finish line on behalf of the American people, and I'm absolutely confident that they will. I'm equally convinced that on the day that we gather here at the White House and I sign comprehensive health insurance reform legislation into law, they'll be able to join their House colleagues and say that this was their finest moment in public service, the moment we delivered changed we promised the American people and did something to leave this country stronger than we found it.

(END VIDEO CLIP)

MATTHEWS: Welcome back to HARDBALL. President Obama says it's all in the Senate's hands now. So what's going to happen over there, and how long will it take, if it ever gets done? In a moment, Republican senator John Barrasso of Wyoming will be here. But first, North Dakota Democratic senator Kent Conrad, who's chairman of the Senate Budget Committee.

Senator Conrad, this gets trickier and trickier. Senator Joe Lieberman, your Democratic colleague, over the weekend said no way at all will he vote to even allow the vote to come to a vote for final passage if the health bill includes a public option. What does that do to the calculations of the leadership and yourself?

SEN. KENT CONRAD (D-ND), BUDGET COMMITTEE CHAIRMAN: Well, it's always been the case that public option-it's hard to see how there were the votes for it in the Senate based on the public announcements of positions of individual senators, including Senator Lieberman and Senator Snowe. So that still remains up in the air.

I will say that the House made a major change in not tying public option to Medicare levels of reimbursement because those of us who represent low-reimbursement states simply could not accept that, could not vote for it because it would have worked such an extreme hardship on our states. And they changed that in the House. It is no longer tied to Medicare levels of reimbursement.

MATTHEWS: Well, is it going to pay enough for your hospitals?

CONRAD: Well, certainly, Medicare levels of reimbursement never would. In our state, Medicare levels of reimbursement are well below actual costs.

MATTHEWS: Right.

CONRAD: That's why tying it to Medicare levels of reimbursement would be so devastating.

It-it remains to be worked out. And I'm hopeful, as we go through this process, we can reach a conclusion that does manage to get 60 votes, and do it in the right way, because we have also got to reduce the deficit, both in the near term and the long term.

And the-the House bill is relatively good in the short term, but the long term does not have the savings that the Senate bill does-at least the Senate Finance bill. So, there's going to be a need for people to come together and to reach a conclusion.

MATTHEWS: OK.

On a non-quantitative measure, on the issue of quality or values, the issue of abortion, what will the impact be in the Senate side of that House-passed amendment which basically takes abortion coverage out of the bill?

CONRAD: You know, I have been listening to your conversation with the two previous guests, and I think you have captured it, Chris.

This is yet to be worked out. What we know for certain, if there is taxpayer funding of abortion in this bill, this bill goes down. That is the reality. That was the reality in the House. That's a reality in the Senate.

So, there has to be a way of working this out, so that we are left with something people can support.

MATTHEWS: Why can't the geniuses on these staffs up there-I used to be a staff maybe, but make I wasn't the genius that was required-but isn't there some way to separate out, so that people who are taxpayers can support a health care plan without getting involved in the individual decision which is a guaranteed right under this Constitution to choose an abortion? You don't get involved in that decision.

It's totally that woman's choice, that you're not subsidizing it or taxing it or anything-it's a neutral choice as far as you're concerned, which is what most Americans, I believe, are comfortable with, if they support abortion rights. Even those people say, let the person pay for it.

Now, how does this get involved here in this whole sticky mess of health care? People say, well, it's just like any other health care procedure.

Well, it isn't just like any other health care procedure. It wouldn't

we wouldn't be debating it. We don't have national debates over kidney removal or anything else like that. This is unique in our culture, in our value system.

So, how do we solve it?

CONRAD: You know, we have got to remember this is not an abortion bill.

On the other hand, this bill will not advance unless people are convinced that there is not taxpayer funding for abortion. As you know, we have the Hyde amendment. The Hyde amendment has been in place for more than 30 years.

MATTHEWS: Right.

CONRAD: And it assures that taxpayer funds do not go for abortion.

I-I think this is something that is yet to be solved in a way that is acceptable, and a lot of additional work is going to have to be done.

MATTHEWS: OK. OK.

Thank you very much, Kent Conrad, senator from North Dakota and chairman of the Senate Budget Committee.

By the way, Here is Senator Joe Lieberman on FOX News yesterday. Talk about a barn burner. Here he is. Let's listen.

(BEGIN VIDEO CLIP, "FOX NEWS SUNDAY")

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: If the public option plan is in there, as a matter of conscience, I-I will not allow this bill to come to a final vote, because I believe the debt can break America and send us into a recession that's worse than the one we are fighting our way out of today.

(END VIDEO CLIP)

MATTHEWS: Wow, as a matter of conscience.

Wyoming Senator, Republican Senator John Barrasso is an orthopedic surgeon.

Senator, thank you so much for joining us.

Are you going to vote for any health care bill, or is this just for the Democrats to debate?

SEN. JOHN BARRASSO ®, WYOMING: Well, the Democrats are the only ones that are doing the debating right now.

I want to vote for health care reform that is patient-centered, not government-centered, not insurance company-centered. There is a right way to do this. And, right now, I look at this bill as being the totally wrong way to address the health care needs that our nation has.

MATTHEWS: Republicans had been in power for eight years before this presidential election. You have had ample opportunity under previous administrations, when you have had control of Congress, under Reagan. Where was the Republican health care bill then?

I mean, everybody talks now on the Republican side how would have, could have, should have, maybe, what-might have done, didn't do it. How come you never did it when you had the power to do it, and now you say, we have got a better alternative?

I don't get it.

BARRASSO: I have only been in the Senate for two years, and, from the day I showed up, I was talking about the way to put patients at the center, allow people to buy insurance across state lines.

We know from a study, Chris, that 12 percent of Americans-or-no

12 million Americans would be able to get insurance affordably if they could just buy across state lines and then give them the same tax breaks as the rest of the country, as-as big businesses get.

And I have been talking for years about the fact that half of all the money we spend on health care is on 5 percent of the people who eat too much, exercise too little, and who smoke. And even front page "USA Today" the other day, a third of the Americans are at increased risk for cancer because of obesity.

Yet, there is nothing, Chris, in any of these bills that really ends up putting the patient in the center and giving that individual patient an incentive to stay healthy, get their diabetes under control or their weight under control.

And there is nothing that really deals with the lawsuit abuse, a loser pays, or a number of different ways that you could deal with this, all the defensive medicine.

MATTHEWS: OK.

BARRASSO: That has actually been scored at $52 billion.

MATTHEWS: But the Democrats are in bed with the trial lawyers, so they're not going to do anything.

BARRASSO: Well, does that mean it's the right solution for a country where we need health care reform?

MATTHEWS: No, I'm just telling you, I'm trying to deal with facts of life around here. I'm just trying to figure out how the health care gets built when you have a Democratic Party that's owned by the trial bench-it just is-a Republican Party that seems to be in bed with business and the insurance companies and really doesn't want to do anything.

And every time your party-you say you're not responsible. And I-

I haven't met you before, but everybody says you're a great guy, obviously your commitment to medicine is real and a lifelong commitment. But I haven't seen your party, which you're in, do anything.

Ronald Reagan, back in the '60s, talked about alternatives to Medicare. He didn't want an alternative. Your party never wants an alternative. What you want to do is stand on the sidelines and make catcalls against the Democrats when they try to do things, like civil rights and things like that. That is a problem.

Do you feel-are you proud of your party's record on health care?

BARRASSO: I think both parties have a long way to go on health care, and we ought to put patients first.

Look, your governor, Ed Rendell, was on "Meet the Press" yesterday, and he said there's probably 80 percent of the things that we can agree on, a step-by-step process.

(CROSSTALK)

BARRASSO: Why aren't we doing that?

MATTHEWS: Yes, but he is not going to-he is not going to touch-he is not going to touch tort reform.

BARRASSO: Well, if there's 80 percent...

MATTHEWS: Not Ed Rendell, no, no.

BARRASSO: ... of the things that we can agree on, we ought to do-we ought to pass those 80 percent of the things.

MATTHEWS: No, that's one thing. He's a good guy in many ways, but all parties seem to-the trouble with the political parties, Senator, is you have got to buy the blue plate special.

If you're a Democrat, you have got to buy all this stuff. You have got to buy card check, and you have got to buy the trial lawyers, and you have got to buy their whole kettle of fish. If you're a Republican, you got to buy the full-mooners on the cultural right, the wing nuts. They all come aboard, too.

When are we going to have a political party that's absolutely sane and absolutely operates in the national interest?

BARRASSO: Well, I'm-I'm trying to work in the best interest of the people of Wyoming.

MATTHEWS: Yes.

BARRASSO: I have been the medical director of something called the Wyoming Health Fairs, where...

MATTHEWS: Yes.

BARRASSO: ... we give blood tests, 50,000, 60,000 people a year, so they know their cholesterol. And they get their-get their-and it helps...

(CROSSTALK)

MATTHEWS: I wish-I wish you and Enzi, I wish you-you and Enzi are both from Wyoming.

(CROSSTALK)

MATTHEWS: You're both great guys. I hear great stuff about you, you and Enzi, the former CPA. You're both good on health care. And, yet, you're not partners on this health care bill.

And I don't understand why this is not bipartisan, with at least five or 10 Republicans like you aboard, why they couldn't reach agreement, why you couldn't reach agreement. Is there an answer to that?

BARRASSO: Well, I haven't been...

(CROSSTALK)

MATTHEWS: Why is this a Democratic bill?

BARRASSO: You know, I have had suggestions for the president. He hasn't listened to me or to Tom Coburn, who is the other physical. There are only two physicians in the Senate.

MATTHEWS: Yes.

BARRASSO: And I have been taking care of families in Wyoming for 25 years.

MATTHEWS: Yes.

(CROSSTALK)

BARRASSO: I know the consequences, Chris. I know the consequences of a big health care bill like this.

MATTHEWS: Yes, but-yes, but Coburn loves to be the odd man out. Coburn loves to be the odd man out. You may want to join in. He's not a joiner.

Hey, thank you so much for this, Senator Barrasso. It's nice to have you on the show. I have heard great things about you. It's too bad you're not aboard this health care bill.